Best 1-Year FCNR Rates in India 2026: Bank-by-Bank Comparison
You have read that FCNR deposits now pay six or seven per cent. You want a one year deposit.
There is something you need to know first.
Those rates are not available at one year. Not at any bank.
The 2026 repricing came from an RBI arrangement that applied only to deposits of three to five years. The one year bucket was left exactly where it was.
So a search for the best one year FCNR rate lands you in a market the news is not describing.
This piece compares what is actually on offer at one year, bank by bank. It also explains what to weigh instead of the headline.
We do not print rate figures, because they move and a stale number misleads. We compare the structures, which change far more slowly.
Why one year missed the party
RBI opened a concessional swap facility in June 2026. It absorbed the currency hedging cost banks normally carry on foreign currency deposits.
That cost was the reason FCNR rates had been low for years. Removing it let banks pass the saving through.
But the facility applied only to deposits of a minimum three year and maximum five year tenor. A separate temporary relaxation of the interest rate ceiling covered the same band.
Everything under three years stayed under the previous ceiling. The one year bucket never received the subsidy, so its pricing barely moved.
👉 Tip: See a high FCNR headline? Check which tenure it applies to before planning anything.
There is a second effect worth knowing. At more than one bank, the two to three year bucket now pays less than the shorter one.
So within the sub-three-year range, stretching from one year to two years can leave you worse off. The curve is not a smooth slope any more.
The comparison that actually matters at one year
Since rates in this bucket sit close together across banks, the differences that decide your outcome are structural.
Four things separate the banks at one year. Whether the tenure is offered at all, and which currencies you can hold. Then what happens if you exit early, and whether a lock-in applies.
Note that last one carefully. The one year lock-in attached to the 2026 arrangement applies to three to five year deposits. A straightforward one year deposit generally sits outside it.
That makes the one year deposit the more flexible instrument, even though it pays less. For some readers that trade is the right one.
Bank by bank at one year
Federal Bank is the clearest case, because its 2026 scheme does not offer this tenure at all.
FCNR Max runs from three to five years only. A one year deposit means the bank's ordinary product on different terms. Our note on Federal Bank FCNR rates sets out the scheme.
ICICI Bank applies a tenure split by currency. USD runs the full range. Several other currencies run only to under three years, which puts them squarely in this bucket.
Its published exit rule for the twelve month to under thirty six month band is notably clean. Our note on ICICI Bank FCNR rates covers the split.
YES Bank carries the widest currency range we found, and publishes the lowest short-band premature penalty.
Its card also shows the dip between the one to two and two to three year buckets very clearly. See our YES Bank currency-wise comparison.
HDFC Bank offers a wide currency list including Singapore dollars. Its auto-renewal default deserves attention here, because certain currencies roll into a one year tenor automatically.
Our note on HDFC Bank FCNR rates explains why that matters.
SBI offers the full one to five year range with both payout and cumulative variants. Its premature withdrawal approach compares several rates and applies the lowest, with no separate penalty.
See our note on SBI FCNR rates.
Axis Bank calculates interest on actual day count, and day-based logic decides which slab applies.
At one year that matters, because a deposit sitting near a band boundary can fall either side. Our note on Axis Bank FCNR rates covers it.
Canara Bank publishes half yearly compounding and a card that applies below a stated large-value threshold.
Above it, pricing is a branch conversation. See our note on Canara Bank FCNR rates.
IndusInd Bank attaches its lock-in only to the three to five year band. A one year deposit sits outside it.
Its published penalty is at the low end of the market. Our note on IndusInd Bank FCNR rates has the detail.
Currency breadth is the real differentiator
At one year, the currency you can hold matters more than a small rate difference.
The ranges we found run from four currencies at the narrow end to eight or nine at the wide end. Not every bank carries Singapore dollars, Japanese yen, Canadian dollars or Hong Kong dollars.
If your spending currency is outside a bank's list, the comparison ends there. Converting into a currency you do not need introduces a bet on top of a deposit.
👉 Tip: Shortlist on currency and tenure availability first. Compare rates only across the banks that survive that filter.
Exit terms still vary, even at one year
The universal rule is that no interest is payable if you break an FCNR deposit inside twelve months. That is an RBI-level design feature, not a bank choice.
So a one year deposit broken at month eleven returns your principal and nothing else. There is no partial credit.
Past twelve months, the treatment diverges. Some banks apply no separate penalty and simply reset your rate to the period actually run. Others apply a penalty on top of that reset.
Among banks publishing a penalty, the range runs from a small fraction of a percentage point to a full one. That is a wide spread for the same product.
At least one bank publishes its penalty currency by currency rather than as a single figure. Another applies a lower-of-two-rates test before the penalty is even calculated.
The rate reset almost always costs more than the penalty itself. Ask for both, and ask the bank to model your actual exit number rather than quoting a percentage.
What to weigh instead of the headline
If the one year rate is not the story, what is?
Flexibility is the honest answer. A one year deposit without a lock-in lets you reassess in twelve months. Liquidity has real value when plans are unsettled.
Against that sits opportunity cost. The three to five year band is paying materially more right now, and that gap is unusually wide.
Compounding also works differently across tenures. Compounding at half yearly rests does little over twelve months and a great deal over five years.
So the interest rate alone understates the difference between the two choices. The gap in outcomes is wider than the gap in rates.
The three year question, and a hard deadline
For anyone weighing one year against three, there is a timing element that will not wait.
Reporting on 16 August 2026 confirmed that the swap facility applies only to deposits mobilised until 31 August 2026. Banks can avail themselves of swaps under the facility until 11 September.
That matters because several bank pages still show a 30 September date, which was the original deadline. If you are planning around September, you may be planning around a window that has closed.
👉 Tip: Treat 31 August 2026 as the operative date, and confirm with your bank before assuming otherwise.
Deposits already booked are unaffected. A rate locked in is contractual for the full tenure.
So the choice is narrower than it looks. Either commit to three years before the deadline, or accept that one year pricing is what remains available afterwards.
If you cannot commit to three years, that is a legitimate answer. Do not stretch a horizon you do not have to catch a rate.
Who should not take a one year FCNR deposit
If there is any chance you need the money inside twelve months, this is the wrong instrument. No interest is payable, so you take the lock without the return.
Spending in rupees in India? A foreign currency deposit is a currency position, not a safety choice. Our note on savings, FDs or mutual funds covers the alternatives.
If you are looking for growth, a deposit is the wrong tool at any tenure. Our note on the playing safe investment strategy sets out what that caution costs over time.
If your funds sit in Indian rental income rather than foreign earnings, check the funding rules first. Our note on using Indian rental income to open an FD covers the constraint.
For readers comparing against staying local, see our overview of UAE bank fixed deposit rates. For the gold comparison, see bank FD versus gold.
Tax and protection, briefly
Interest on FCNR deposits is exempt from income tax in India for eligible non-residents under prevailing law. The exemption follows your residential status rather than the product.
Your country of residence may tax the interest regardless. A US, UK or Australian resident reports worldwide income.
Deposits with a scheduled bank in India sit within the DICGC deposit insurance framework, subject to its limits and rules. Deposits with an IFSC Banking Unit in GIFT City do not carry that same cover.
That is not an argument against GIFT City. It is an argument for knowing which protection attaches where.
To compare live rates across banks, our NRI FD rates explorer puts current options side by side.
For resident Indians reading this
FCNR is not open to you. It is a non-resident product by design.
If your holdings are entirely rupee-denominated, your currency position is a default rather than a choice. GIFT City is the route residents use for USD-denominated funds without the overseas remittance process.
Our GIFT City mutual funds explorer lists what is available. Mandates run from the DSP Global Equity Fund to the Tata India Dynamic Equity Fund.
Regional and mid-cap mandates sit alongside them. The Edelweiss Greater China Equity Fund and Sundaram India Mid Cap Fund target different outcomes.
For longer horizons, GIFT City alternative investment funds and the primary market open further routes. Our explainer on the first GIFT City IPO covers how that market works.
You can also browse mutual fund products and follow market direction on the GIFT Nifty tracker.
How to run the comparison yourself
Start with your spending currency, and drop any bank that does not offer it.
Check that one year is actually available, since at least one 2026 scheme starts at three years.
Pull each surviving bank's live card from its own website rather than an aggregator, and note the effective date.
Ask each for the premature withdrawal treatment in writing, including whether a penalty applies on top of the rate reset.
Only then compare the rates, and expect the gaps to be narrow.
FAQ
Why can I not get six or seven per cent on a one year FCNR deposit?
Because RBI's 2026 swap facility and ceiling relaxation applied only to deposits of three to five years. The one year bucket kept its previous pricing.
Which bank has the best one year FCNR rate?
Rates in this bucket sit close together and change frequently, so the answer moves. Currency availability and exit terms usually matter more than the gap between banks.
Does the one year lock-in apply to a one year deposit?
Generally no. The lock-in attaches to three to five year deposits booked under the 2026 arrangement.
What happens if I break a one year deposit early?
No interest is payable at all if you close inside twelve months. You receive your foreign currency principal back.
Is two years better than one?
Not necessarily. At more than one bank the two to three year bucket pays less than the one to two year bucket.
When does the 2026 window close?
Reporting on 16 August 2026 confirmed deposits must be mobilised by 31 August 2026. Banks can avail swaps until 11 September. Some bank pages still show the earlier 30 September date.
What we would do next
Decide first whether three years is genuinely possible. That is where the 2026 pricing sits, and the deadline is close.
If it is not, shortlist on currency and exit terms rather than rate. Then pull live cards from each bank's own site before comparing.
Belong brings deposit and fund options into one view. Our WhatsApp community is where NRIs work through these decisions together.
Sources
Business Standard, Banks race for dollar deposits as RBI curtails FCNR(B) swap window, 16 August 2026. Confirms the facility covers deposits mobilised until 31 August 2026, with swaps available to banks until 11 September: https://www.business-standard.com/finance/news/banks-race-for-dollar-deposits-as-rbi-curtails-fcnr-b-swap-window-126081600409_1.html
Reserve Bank of India, circular FMOD.MAOG.No.S-56/01.06.016/2026-27, dated 8 June 2026. This established the concessional swap facility for three to five year FCNR(B) deposits: https://www.rbi.org.in
Reserve Bank of India, Master Direction on Interest Rate on Deposits. Also the Commercial Banks Amendment Directions, 2026, dated 17 June 2026: https://www.rbi.org.in
Business Standard, RBI lifts cap on FCNR(B) and NRE deposit rates, 17 June 2026: https://www.business-standard.com/finance/news/rbi-lifts-cap-on-fcnr-b-nre-deposit-rates-to-boost-foreign-inflows-126061701121_1.html
Bank-level terms here are drawn from each bank's own published FCNR pages and rate schedules. These are cited in the individual bank articles linked above
Deposit Insurance and Credit Guarantee Corporation: https://www.dicgc.org.in
Income Tax Department, India: https://www.incometax.gov.in
Rates, currency lists, penalties and deadlines change. Verify each on the relevant bank's and RBI's official pages before acting.
Disclaimer
This article is for information only and is not investment, tax or legal advice. It does not account for your personal circumstances, residential status or country of tax residence.
This comparison does not reproduce numeric rate tables. Deposit rates change frequently, and published figures would be stale before most readers saw them. Relative positions and structural differences are described directionally, and each bank's own card is the authoritative source.
Bank-level structural details summarised here were verified against each bank's published pages at the time of writing. Where a currency list could not be confirmed from a bank's own page, the relevant individual article says so.
Terms described here reflect published positions at the time of writing and may have changed since.
Consult a qualified tax adviser in India and your country of residence before booking. Belong is an investment advisory platform and does not accept deposits.