Sterling is not treated the same as the dollar by Indian banks. That is the first thing a UK-based NRI should know before comparing any rate.
At one large private bank, the dollar can be booked for five years while sterling stops short of three. At another, sterling deposits carry an auto-renewal default that the dollar does not.
Neither of those facts appears in a rate table. Both change what you actually earn.
There is a second layer too. The UK abolished the remittance basis in April 2025. That reshaped how sterling interest earned in India is taxed at home.
This piece covers both. We do not print rate figures, because they change and a stale number misleads.
Where sterling gets a shorter runway
The 2026 repricing came from an RBI arrangement covering deposits of three to five years only. Anything shorter kept its old pricing.
That makes tenure availability the first filter, not the second.
ICICI Bank publishes a currency-wise tenure split. The dollar runs the full one to five year range. Sterling, Singapore dollars, Canadian dollars and Australian dollars run to under three years.
If sterling cannot reach three years at a bank, it cannot enter the band where the 2026 pricing sits. The rate card may look competitive while the good tenure is simply unavailable to you.
This is our reading of published tenure ranges rather than a statement from the bank. Confirm the current position for sterling directly before planning around it.
👉 Tip: Ask one question before anything else. Can I book sterling for three years or more at this bank?
The renewal default that singles out sterling
HDFC Bank publishes a notice that sterling holders should read carefully.
The notice covers existing sterling, euro and Japanese yen deposits. It applies to tenors from one year and a day up to five years.
Those deposits auto-renew for a one year tenor by default when renewal falls due.
Sit with what that means. A four year sterling deposit can roll into a one year tenor without anyone deciding to do so.
The one year band is also the band RBI never freed. So the renewal lands in the tenor with the tighter ceiling, at whatever rate prevails then.
Dollar deposits are not named in that notice. Sterling is.
That asymmetry is invisible on a rate card and expensive in practice. It is also entirely avoidable by setting a maturity instruction at booking.
👉 Tip: Set your renewal instruction when you open the deposit, not when it matures.
Which banks carry sterling at all
Sterling is widely offered, but not universally, and the ranges differ.
Among the banks we examined, sterling appears at SBI, HDFC Bank, ICICI Bank and Canara Bank. It also appears at Federal Bank, YES Bank and Kotak Mahindra Bank.
Federal Bank includes sterling in its 2026 scheme, which runs three to five years only. Notably, the sterling minimum deposit is the lowest of the currencies in that scheme.
That matters for smaller depositors. A scheme that feels out of reach in dollars may be accessible in sterling.
YES Bank carries one of the widest currency ranges we found. Sterling there sits close to the dollar in the shorter band.
Canara Bank and SBI both carry sterling across their full range. Kotak Mahindra Bank carries it with a currency-specific penalty schedule on early exit.
Take the current list from each bank's own card. Third-party summaries have conflicted with bank pages repeatedly across this series.
Sterling side by side, bank by bank
Rates move week to week, so the table compares what does not move as fast.
Each entry comes from that bank's own published FCNR pages. Verify the live position before acting.
Two rows deserve a second look.
ICICI Bank is the only bank in this set where sterling cannot reach three years. That removes the 2026 pricing entirely for sterling holders there.
HDFC Bank offers the full sterling range but names sterling in its auto-renewal notice. The tenure is available; keeping it requires an instruction.
Federal Bank sits at the opposite end for smaller depositors. Sterling carries the lowest minimum in its scheme, so the entry point is more accessible than in dollars.
👉 Tip: Read the tenure column before the rate. A bank that caps sterling below three years cannot offer you the 2026 pricing.
We could not confirm the sterling position at Axis Bank or IndusInd Bank from their own pages. Take those from the live card rather than assuming.
Why the sterling rate is what it is
An FCNR rate is capped as a spread over an overnight reference rate for that specific currency.
The reference rate for sterling reflects Bank of England policy, not Indian conditions. So your sterling deposit tracks decisions made in London.
This is why sterling and the dollar diverge and reconverge over time. Neither bank preference nor generosity explains the gap.
It also means a sterling rate that looks weaker than a dollar rate is not evidence of a worse product. It is evidence of a different central bank.
Converting sterling into dollars to chase a rate introduces a currency position on top of a deposit. If you will spend in sterling, that conversion works against you at maturity.
What changed for UK taxpayers in April 2025
This is the part most FCNR coverage has not caught up with.
Before 6 April 2025, UK residents who were non-domiciled could claim the remittance basis. Foreign income was taxed only if brought into the UK.
That regime was abolished. From 6 April 2025, all UK residents are taxed on the arising basis on worldwide income, regardless of domicile.
So sterling interest earned on an Indian deposit is now in scope as it arises. Bringing it to the UK is no longer the trigger.
India exempts that interest for eligible non-residents. That exemption stops at India's border and gives you nothing against a UK liability.
Our note on GIFT City tax treatment for UK NRIs covers the wider position.
The four-year window, and the trap inside it
A replacement relief exists, and its shape matters for deposit tenure.
The Foreign Income and Gains regime gives qualifying new UK residents four years of relief on foreign income and gains. Eligibility depends on having been non-UK resident for ten consecutive tax years.
It must be claimed each year. Claiming it costs you the personal allowance and the capital gains annual exemption for that year.
Now connect that to a five year deposit.
Say you arrive in the UK and book a five year sterling deposit in your second year of residence. The relief then covers only part of the term.
Interest arising after the window closes falls into the arising basis.
That is the trap. The deposit tenure outlives the relief, and the later years are the ones carrying the most compounded interest.
👉 Tip: Inside the four year window? Match the deposit maturity to the window, not to the best rate.
A transitional facility also exists for foreign income and gains arising before April 2025. It allows remittance at a reduced rate for a limited period.
If you hold older Indian income, that is worth asking about.
This is a general summary of a complex regime. Take advice on your own position rather than acting on it.
Our notes on claiming UK tax refunds and financial planning for UK NRIs cover adjacent ground.
If you are moving the other way
For NRIs planning a return to India, the sequencing question inverts.
Your maturity date may fall on either side of a change in Indian residential status. Before that change, the Indian exemption holds. After it, the position depends on your status.
There may be a Resident but Not Ordinarily Resident period that offers relief for a limited time. Our note on RNOR status for UK returnees sets out how it works.
Booking a tenure that lands inside that window is a deliberate choice rather than luck.
The treaty between the two countries governs which side taxes what. Our note on DTAA benefits for returning NRIs covers the mechanics.
See our guide on how UK NRIs can move savings to India. We also cover UK income after returning to India.
Transferring a large sum? Our note on transferring large sums from the UK to India covers the route.
What sterling FCNR competes with
For a UK resident, the honest comparison is not another Indian bank.
It is a UK savings account, a fixed rate bond, or a cash ISA. Those carry no foreign account complexity. An ISA carries no UK tax on the interest at all.
Sterling FCNR earns its place where the money has a job in India. A property purchase, parental support, or a planned return.
If the money has no such job, the case thins considerably once UK tax and reporting are applied.
Our comparison of UK ISAs against Indian mutual funds covers the same logic in a different asset.
What the rate is really buying
A sterling deposit removes rupee risk completely. Principal and interest are payable in sterling.
That is protection, not growth. What matters at the end is real return after UK inflation and after tax wherever you are liable.
Locking sterling for five years carries a cost that never appears on a statement. The time value of money is the right frame for it.
If there is any chance you need the money inside a year, this is the wrong instrument. No interest is payable, so liquidity is the binding constraint.
The deadline
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 until 11 September.
Several bank pages still show 30 September, which was the original date. Treat the earlier one as operative and confirm with your bank.
Deposits already booked are unaffected. A rate locked in is contractual for the full tenure.
For sterling holders specifically, the deadline interacts with the tenure question. If your bank caps sterling below three years, the deadline is not your constraint at all.
To compare live rates across banks, our NRI FD rates explorer puts the 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 exposure is a default rather than a decision. GIFT City is the route residents use to hold foreign currency 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.
Weighing the GIFT City route? Start with our GIFT City guide for UK NRIs. Then work through the GIFT City checklist.
Planning a return? See our note on investing in GIFT City before returning. For pensions, see managing UK pension pots.
The order to work in
Establish your UK tax position first, including whether the four year relief applies to you.
Check whether your chosen bank offers sterling at the tenure you want, since some cap it below three years.
Set the renewal instruction at booking, because sterling is singled out for a shorter default at one major bank.
Compare against a UK savings product, not only against another Indian bank.
Only then compare sterling rates across banks, and expect the gaps to be modest.
FAQ
Can I book a five year sterling FCNR deposit at any bank?
No. At least one large private bank publishes a sterling range stopping short of three years. The dollar there gets the full range.
Why is the sterling rate lower than the dollar rate?
Because each currency's FCNR rate is capped as a spread over a reference rate for that currency. Sterling tracks Bank of England policy.
Is sterling FCNR interest taxable in the UK?
From 6 April 2025 all UK residents are taxed on the arising basis on worldwide income. The India exemption does not reduce a UK liability.
What is the four year FIG regime?
A relief for qualifying new UK residents covering foreign income and gains for four years. It requires ten prior years of non-UK residence and costs you the personal allowance when claimed.
Will my sterling deposit renew for the same tenure?
Not necessarily. One major bank's notice states sterling, euro and yen deposits auto-renew for a one year tenor by default.
When does the 2026 window close?
Deposits must be mobilised by 31 August 2026, with banks able to avail swaps until 11 September. Some bank pages still show 30 September.
What we would do next
Check the sterling tenure range at your bank before looking at any rate, because that filter removes options fastest. Establish where you sit against the four year UK relief. Then set the renewal instruction at booking rather than leaving it to a default.
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 deposits must be mobilised by 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, establishing the concessional swap facility: 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
ICICI Bank, NRI Deposits and FCNR pages, for the currency-wise tenure split placing sterling below three years: https://www.icici.bank.in/nri-banking/deposits
HDFC Bank, Current Interest Rates page, for the auto-renewal default applying to sterling, euro and yen deposits: https://www.hdfc.bank.in/interest-rates
Federal Bank, FCNR Max page, for sterling inclusion and the currency-wise minimum deposits: https://www.federal.bank.in/fcnr-max
HM Revenue and Customs guidance on the Foreign Income and Gains regime, in force from 6 April 2025: https://www.gov.uk
Low Incomes Tax Reform Group, Foreign income and gains regime for tax years from 2025/26: https://www.litrg.org.uk/international/uk-tax-uk-residents-foreign-income-and-gains/foreign-income-and-gains-regime-tax-years-202526
Deposit Insurance and Credit Guarantee Corporation: https://www.dicgc.org.in
Income Tax Department, India: https://www.incometax.gov.in
Rates, tenure ranges, tax rules and deadlines change. Verify each on the relevant bank, RBI and tax authority 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 piece does not reproduce numeric rate tables. Deposit rates change frequently, and published figures would be stale before most readers saw them.
The observation that sterling cannot reach the 2026 pricing band at one bank is our reading of published tenure ranges. It is not a statement issued by that bank.
Confirm directly before relying on it.
UK tax treatment is described in general terms only. The Foreign Income and Gains regime is complex, eligibility depends on your residence history, and claiming it carries trade-offs. UK taxpayers should take advice from a qualified UK adviser.
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.