AU Small Finance Bank (AU SFB) has increased interest rates on both Foreign Currency Non-Resident (Bank) -FCNR(B)- fixed deposits (FDs) and Non-Resident External (NRE) FDs, effective July 27, 2026.
In June 2026, the Reserve Bank of India (RBI) announced that the government would bear the hedging cost on 3-5-year FCNR deposits. As a result, many banks increased interest rates on the same FCNR(B) FDs.The relaxation on the hedging cost will remain in force until September 30, 2026.
FCNR (B) deposits continue to be a vital means of bringing foreign currency such as US dollar from abroad into India while providing security from currency depreciation to its investors.
AU Small Finance Bank FCNR(B) interest rates
AU Small Finance Bank has increased the interest rate on FD tenures of three to four years from 7.10% p.a. to 7.40% p.a.. The small finance bank has also increased interest rates on NRE FDs from 7.00% p.a. to 7.60% p.a. on a tenure of 36 months and one day to 45 months.
Why FCNR (B) and NRE deposits remain popular among NRIs
FCNR (B) deposits remain a popular choice for NRIs looking to increase their overseas earnings while reducing foreign exchange risk. FCNR (B) deposits are available in US dollars and other currencies such as British Pound, Euro, offering a full repatriation of principal and interest. It also provides tax benefits on earnings from interest in India. Similarly, NRE FDs offer NRIs an attractive rupee-denominated savings option with full repatriation and tax-free interest income in India, subject to applicable laws.
AU Small Finance Bank’s revised NRE FD interest rates
| Tenure/ Currency | < USD 500,000 |
| 1 Yr to < 2 Yrs | 5.10% |
| 2 Yrs to < 3 Yrs | 4.55% |
| 3 Yrs to < 4 Yrs | 7.40% |
| 4 Yrs to < 5 Yrs | 7.10% |
| 5 Yrs | 7.10% |
AU Small Finance Bank’s revised FCNR (B) interest rates
| Tenures | Interest Rates (Per annum) |
| 12 Months 0 Days | 6.35% |
| 12 Months 1 Day to 15 Months | 7.10% |
| 15 Months 1 Day to 18 Months | 7.00% |
| 18 months 1 days to 24 months | 7.00% |
| 24 Months 1 Day to 30 Months | 7.10% |
| 30 Months 1 Day to 36 Months | 7.40% |
| 36 Months 1 Day to 45 Months | 7.60% |
| 45 Months 1 Day to less than 60 Months | 6.75% |
| 60 Months to 120 Months | 6.75% |
Charges on inward and outward remittances
AU SFB press release stated: “AU SFB continues to offer zero forex margin and zero bank charges on eligible inward and outward remittances. The bank remains the only private sector bank in India to eliminate embedded forex mark-ups, helping customers maximise the value of their international transfers.”
Eligible customers can convert currencies at the Bank's Interbank Reference Rate (IBR) without incurring any transaction fees, the SFB says. Higher FCNR (B) and NRE deposit rates, together with zero FX remittance benefits, offer NRIs a holistic banking solution that addresses both wealth growth and transaction efficiency.
