The bank has increased the peak interest rate on FCNR(B) deposits to 7.40% per annum from 7.10% earlier for the 3-4 year tenure. The peak rate on NRE fixed deposits has been raised to 7.60% from 7% for deposits with a tenure of 36 months and one day to 45 months.
FCNR(B) deposits allow NRIs to hold deposits in foreign currencies while protecting themselves from exchange rate fluctuations. These deposits are available in currencies such as US dollars and offer repatriation of principal and interest, subject to applicable regulations.
The rate revision comes after the Reserve Bank of India’s June 2026 measures that provided banks more flexibility to offer competitive rates on foreign currency deposits.
The bank said the revised rates will be available to both new and existing NRI customers through its digital platforms and banking channels.
Alongside the deposit rate revision, AU Small Finance Bank said it continues to offer zero forex margin and zero bank charges on eligible inward and outward remittances. Under the facility, eligible customers can access currency conversion at the bank’s interbank reference rate.
NRE fixed deposits allow NRIs to invest in rupee-denominated deposits, with interest income exempt from tax in India, subject to applicable rules.
The revision comes at a time when banks are looking to increase foreign currency deposits amid changing interest rate conditions and higher competition for NRI savings.
