Indian expats living in the UAE have a limited window to secure some of the highest returns in years on savings held back home. A temporary easing of regulations by the Reserve Bank of India (RBI) has led banks to substantially increase interest rates on specific Non-Resident Indian (NRI) deposit products.
Historically, the RBI imposed strict caps on the interest rates banks could offer on foreign currency deposits. To boost foreign currency inflows and stabilise the rupee amid volatile global markets, these ceilings have been temporarily removed for certain tenors until 30 September 2026.
The shift towards higher interest rates for NRIs
The central bank has withdrawn interest-rate limits on fresh Foreign Currency Non-Resident (Bank), or FCNR(B), deposits with maturities between three and five years. Additionally, restrictions on interest rates for fresh Non-Resident External (NRE) deposits with tenors of three years and above have been lifted.
Previously, these rates were capped relative to global benchmarks or domestic deposit rates. Following this regulatory shift, major Indian banks have sharply increased their offers. While FCNR(B) deposits typically earned between 3.35 per cent and 4 per cent before the change, some lenders are now offering between 6 per cent and 7.1 per cent for USD deposits.
Why FCNR(B) is attractive for UAE residents
For professionals managing their finances based on the average salary in Dubai, FCNR(B) deposits present a unique opportunity. These accounts allow NRIs to maintain savings in foreign currencies such as US dollars, pounds, or euros.
