FCNR Deposit
FCNR deposits/accounts refers to Foreign Currency Non-Resident Accounts. These deposits are for NRIs who wish to maintain fixed deposits in India, allowing them to save money overseas in Foreign Currency. Various banks allow FCNR deposits in multiple currencies including:
· US Dollars
· Pounds Sterling
· Japanese Yen
· Canadian Dollars
· Euro
· Australian Dollars
FCNR deposits are one of the best investment options popular amongst non-Indian residents as foreign currency investment. Since your money is invested in the form of foreign currencies, exchange rate fluctuations have no impact on your money. This thus is a risk-free investment option. Also, these deposits offer to earn at a fixed rate of interest till maturity.
Why invest in an FCNR deposit?
Since the exchange rate fluctuations don’t have an impact on FCNR deposits, FCNR account deposits offer risk-free investment options to non-Indian residents. This means that if you have opened an FCNR deposit with USD 25,000, you can withdraw it along with the earned interest without any change or fluctuation.
Features and Benefits of an FCNR deposit
- Investment in multiple currencies: You can open an FCNR deposit account in a freely convertible foreign currency, as by the Reserve Bank of India (RBI). You can start this deposit in 9 currencies as of now which include USD, GBP, HKD, EUR, JPY, AUD, SGD, CAD, CHF.
- Flexible tenure option: You can choose from tenures from 1 year to 5 years, at your convenience.
- No minimum or maximum deposit limits: You can open an FCNR (B) deposit without any minimum or maximum deposit limit in some banks.
- High level of liquidity: The deposited amount and the interest earned on your FCNR deposit are fully repatriable.
- Tax benefits: Interest earned on FCNR deposits are exempted from income tax in India, as per Income Tax Act, 1961.
- Hassle-free renewal option: These deposits offer hassle-free, automatic renewal of your principal amount upon maturity.
- Fixed interest rates: The interest rate in the FCNR deposit account remains unchanged throughout the tenure of the deposit.
Documents Required to Open an FCNR deposit account
Documents Required to Open an FCNR deposit account are as follows:
- A valid passport
- Proof of residency status (PIO/OCI)
- Overseas address proof
- Indian address proof
- Copy of PAN card
Who can open an FCNR account?
FCNR account can be opened by
Non-Indian Residents (NRIs)
Person of Indian origin i.e. Overseas Indian (PIOs)
FCNR Account Deposit Tenure
As per the rules and regulations of RBI, one can open an FCNR deposit account for a minimum of 1 year and a maximum of 5 years. Thus, in simple words, FCNR deposits are for 1 year to 5 years investment.
Premature Withdrawal facility in FCNR account
Regarding premature withdrawal, there are different rules and regulations which vary from one bank to another.
Also, withdrawal before maturity is not available in case of a loan against a deposit. Thus, this facility varies from bank to bank, and situation to situation.
FCNR interest rates of Top banks
1. SBI FCNR rates
| PERIOD/CURRENCY | USD | GBP | EURO | CAD | AUD | JPY |
| 1 year | 0.70% | 0.67% | 0.01% | 0.58% | 0.13% | 0.02% |
| 5 years | 1.45% | 1.20% | 0.15% | 1.46% | 0.94% | 0.05% |
2. HDFC FCNR rates
| Period | GBP | USD | Euro | JPY | AUD | CAD |
| 1 year | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% |
| 5 years | NA | 0.20% | NA | NA | 0.15% | 0.40% |
3. ICICI Bank FCNR FD Rates
| Period/Currency | USD | GBP | JPY | CAD | AUD | SGD | HKD |
| 1 year | 0.50% | 0.02% | 0.01% | 0.18% | 0.01% | 0.16% | 0.01% |
| 2-3 years | 0.64% | 0.22% | 0.01% | 0.44% | 0.14% | 0.36% | 0.09% |
Frequently Asked Questions (FAQs)
1. What is an FCNR deposit?
FCNR (Foreign Currency Non-Resident) deposits are for NRIs who wish to maintain fixed deposits in India, allowing them to save money overseas in Foreign Currency. FCNR deposits are one of the best investment options popular amongst non-Indian residents as foreign currency investment.
2. Why should one invest in FCNR accounts?
One should invest in FCNR account as these deposits offer risk-free investment options to non-Indian residents as exchange rate fluctuations don’t have an impact on FCNR deposits.
3. What are the documents required to open an FCNR deposit account?
One should be ready with the following mentioned documents:
- A valid passport
- Proof of residency status (PIO/OCI)
- Overseas address proof
- Indian address proof
- Copy of PAN card
4. Who can open an FCNR account?
FCNR account can be easily opened by
- Non-Indian Residents (NRIs)
- Person of Indian origin i.e. Overseas Indian (PIOs)
5. What is the maximum investment period for FCNR deposits?
One can invest in FCNR accounts for a maximum period of 5 years.
6. What is the difference between FCNR and NRO accounts?
| Parameters | FCNR account | NRO account |
| Investment currency type | Foreign currency | Indian currency |
| Type of account | RD/FD | RD/FD/savings/current account |
| Tax benefits | Tax exempted | taxable |