{"id":8043,"date":"2026-08-24T13:03:56","date_gmt":"2026-08-24T07:33:56","guid":{"rendered":"https:\/\/1finance.co.in\/1f-dashboard\/?post_type=blog&p=8043"},"modified":"2026-08-24T13:03:59","modified_gmt":"2026-08-24T07:33:59","slug":"special-fcnr-deposit-factors-to-consider","status":"publish","type":"blog","link":"https:\/\/1finance.co.in\/1f-dashboard\/blog\/special-fcnr-deposit-factors-to-consider\/","title":{"rendered":"Factors to consider before choosing a special FCNR deposit scheme"},"content":{"rendered":"\n

With the August 31, 2026 deadline for the RBI’s special FCNR mobilisation window just days away, NRIs are rushing to lock in rates far above what these deposits have offered in years \u2014 some banks are quoting 5.5% to 7.4%, against the usual 2\u20134%. But the rush to book before the window shuts is exactly when the fine print gets skipped: deposits booked in this period for a 3\u20135 year tenure come with a mandatory 1-year lock-in, and the deadline itself has already been pulled forward once, from September 30 to August 31. Before you book a special FCNR deposit in these final days, here’s what actually matters beyond the headline rate<\/p>\n\n\n\n

Interest rate<\/h2>\n\n\n\n

Check the rate for your tenure and deposit size. Banks may advertise their highest rate for a specific tenure or deposit slab, while a lower rate applies to your deposit.<\/p>\n\n\n\n

Compare the FCNR rate with the rate available for the same currency in its home market. Also compare it with a similar NRE rupee deposit. NRE deposits generally offer higher nominal rates, but they carry rupee exchange-rate risk.<\/p>\n\n\n\n

Find out which bank offers highest interest rate on special FCNR deposit scheme<\/a><\/p>\n\n\n\n

Tenure<\/h2>\n\n\n\n

Check whether you can keep the money deposited for three to five years. Special FCNR deposits generally have multi-year tenures.<\/p>\n\n\n\n

Consider when you will need the money and in which currency. A five-year deposit keeps you at the agreed rate for the full tenure. You may receive less than a new deposit rate if market rates rise during that period.<\/p>\n\n\n\n

Currency<\/h2>\n\n\n\n

Choose a currency that matches your expected future spending where possible. For example, a dollar earner who expects to spend the money in dollars can avoid converting the deposit into rupees.<\/p>\n\n\n\n

If you convert the deposit into rupees at maturity, the final amount in rupees will depend on the exchange rate at that time. The deposit then carries exchange-rate exposure against the rupee.<\/p>\n\n\n\n

Minimum deposit<\/h2>\n\n\n\n

Check the minimum deposit required for the advertised rate. Some preferential rates apply only above a specified deposit amount. A lower rate may apply below that threshold.<\/p>\n\n\n\n

Read the rate table for your deposit slab rather than relying on the headline rate.<\/p>\n\n\n\n

Premature withdrawal rules<\/h2>\n\n\n\n

Under the current scheme, FCNR deposits cannot be withdrawn during the first 12 months.<\/p>\n\n\n\n

After 12 months, the bank generally pays interest at the lower of the contracted rate or the rate applicable to the period for which the deposit was held.<\/p>\n\n\n\n

Check the bank’s premature withdrawal terms before booking the deposit. Keep enough funds outside the FCNR deposit for expenses during the first year.<\/p>\n\n\n

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