Introduction to Foreign Currency Non-Resident (FCNR) Account
An Foreign Currency Non-Resident (FCNR) is a bank account for NRIs to maintain a Fixed Deposit account in India. This account allows you as an NRI to save your money earned in the currency form of the country you’ve originally earned the money from.
Understanding Foreign Currency Non-Resident (FCNR)
An FCNR account is a foreign currency denominated account where non-resident Indians or a person of Indian origin (PIO) can maintain an FCNR account. FCNRs are just like what FDs are for resident Indians, except in foregin currency. They work as great investment options for NRIs to invest in the country for a start, before looking for other avenues in investments on the stock market. FCNR deposits can hold currencies like US Dollars, Pounds Sterling, Euro, Japanese Yen, Australian Dollars and Canadian Dollars. Because the money is being held in those currencies, the risk of exchange rate fluctuations is eliminated. Interest on such deposits is exempt for income tax. The return is thus higher and risk free, and can be a good place to start investing. These deposit accounts are a term deposit account, not savings. You can withdraw your money before the date of maturity, and there will be no charges, but the interest will not be paid until after a year is complete. It’s easy to open with a NRE account that you, as an NRI, are already maintaining in India. All the amount you earn, the principal and the interest, along with the loan facilities like overdraft, are all repatriable.
Highlights of Foreign Currency Non-Resident (FCNR)
- Unlike FDs in India, which can be opened for 5+ years, FCNR accounts can only be opened for a tenure of 1 - 5 years. If you withdraw your money before a year is complete, your interest will also not be credited.
- All major banks like SBI, HDFC, ICICI, Yes Bank, IDBI and Axis Bank let you open an FCNR account. It’s easy to open and operate using internet banking.
