Karur Vysya Bank hikes FCNR deposit rates, offers up to 7.00% p.a. on USD deposits
Karur Vysya Bank has raised FCNR deposit rates, offering up to 7.00% per annum on US Dollar deposits for tenures of three years and above, effective June 10, 2026. This move aims to provide NRIs with higher returns on their foreign currency savings without rupee risk. The bank expects significant interest from the diaspora.
The increase in deposit rates could lead to higher interest expenses for the bank, impacting its net interest margin. However, it is also a strategic move to attract NRI deposits, which can diversify the bank's funding sources and potentially lead to increased business volumes.
The increase in FCNR deposit rates to an attractive 7.00% per annum, especially on USD deposits, is a positive development for the bank as it aims to attract NRI deposits and potentially increase its foreign currency funding base.
Karur Vysya Bank (KVB) has increased interest rates on its Foreign Currency Non-Resident (FCNR) deposits, offering Non-Resident Indians (NRIs) higher returns on their foreign currency savings. The bank is now offering 7.00% per annum on US Dollar (USD) FCNR deposits for tenures of three years and above, which is the highest rate on its FCNR ladder. The revised rates are effective from June 10, 2026. The scheme allows NRIs to place their overseas savings for tenures ranging from one to five years while holding the money in foreign currency, thus avoiding exposure to rupee fluctuations.
The 7.00% rate is applicable to eligible USD FCNR deposits and includes a mandatory one-year lock-in period, with no premature closure allowed during this time. After one year, premature closure may be permitted according to the Bank's existing guidelines, with interest paid at the applicable run period rate less 1%, as per the Bank's Deposit Policy.
Key benefits for NRI customers include tax-efficient returns, as interest earned on FCNR deposits is exempt from income tax in India under current tax rules, with both principal and interest being fully repatriable. There is no rupee exchange risk as the deposit remains in foreign currency. Additionally, customers can avail a forward contract facility to lock in an exchange rate for future conversion to Indian Rupees and can also obtain loans against their FCNR deposit without breaking it.
Shri B. Ramesh Babu, Managing Director & CEO of Karur Vysya Bank, stated, "NRIs want their foreign currency savings to earn more without taking on rupee risk, and these rates answer that directly. A 7.00% return on a US Dollar deposit is a strong proposition, the interest is tax-free in India under current rules, and the principal stays fully repatriable. We expect good traction from the diaspora, particularly those who plan to bring funds back to India over the next few years."
NRIs interested in these rates can apply through KVB's digital banking channels, visit the nearest KVB branch, or contact the Bank's NRI Banking team via email at kvbnri@kvbmail.com or by phone at +91 44-66217600 / +91 95855-02391.
About Karur Vysya Bank: Founded in 1916, Karur Vysya Bank is a leading private sector bank. As of March 31, 2026, the Bank's total business stood at ₹2,14,420 crore, with deposits of ₹1,15,666 crore and advances of ₹98,754 crore. The Bank reported its highest-ever annual net profit of ₹2,510 crore for FY26. KVB operates through a network of 901 branches and over 2,200 ATMs and cash recyclers.
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