Introduction
Foreign Currency Non-Resident Account is the FCNR account full form. If you are uncertain about where to invest your income earned abroad without exchange fluctuation risk, then the FCNR account is the one for you.
The FCNR deposits earn higher interest and are not exposed to exchange rate fluctuations. FCNR deposits are a safe and productive investment. NRIs on the lookout to invest their income from employment, business or investment abroad can invest in FCNR deposits without worrying about currency risks.
What is an FCNR Account?
The FCNR account meaning is an account that can be opened by NRIs for a predetermined term to invest their earnings abroad either through employment, business, or investments. It is an attractive choice that permits investment in multiple currencies with high returns. Investors are protected against exchange fluctuations as the deposit is held in foreign currencies. The deposit can be made in USD, AUD, CAD, EURO, GBP, SGD, or YEN
Benefits & Features of FCNR Account
The features and benefits of FCNR Accounts are:
- FCNR Accounts can be opened by Non-Resident Indians or Persons of Indian Origin and Overseas Corporate Bodies
- The deposit can be opened in multiple currencies including USD, Pounds Sterling, Euro, Japanese Yen, AUD, CAD, etc
- The FCNR Accounts can be opened for a tenure between 1 year to 5 years.
- The interest rates on FCNR deposits are generally higher when compared to savings accounts.
- The deposits into the FCNR account can be by way of foreign inward remittance or transfer from an NRE account. When funds are transferred from NRE account the amount in Indian Rupees will be converted into the preferred and permitted currency before opening the deposit account.
- No minimum or maximum investment limit to open the FCNR deposit
- Both principal and interest are freely repatriable.
- FCNR Accounts protect the investors from currency fluctuation risk.
- The deposit will be booked and maintained in permissible currencies.
- FCNR accounts are a safe investment option with minimal risk and guaranteed returns.
- Interest earned on FCNR accounts is tax-free in India
- Funds can be withdrawn in the same foreign currency that it was booked with mitigating conversion risks
- Simple and hassle-free documentation
- The account can be held jointly with NRIs or PIOs
- Auto-renewal option will be provided
- A nomination facility is available.
Best FCNR Account Option in India 2023
You can open an FCNR Account in the following top banks in India and earn competitive interest rates.
State Bank of India
FCNR (B) Account
- The account can be opened for a tenure between 1 to 5 years
- No cap on minimum and maximum investment
- The rate of interest depends on the currency and the tenure
- US D-4% to 5.60% p.a.
- GBP-2.45% to 5% p.a.
- Euro-1.5%
- CAD-3.85% to 4.50% p.a.
- AUD-3% to 3.60% p.a.
- JPY-0.02% to 0.05% p.a
- Premature withdrawal is permitted. No interest will be paid if withdrawn before completing 1 year
- Foreign currency and rupee loans are available against FCNR(B) deposits
FCNR(B) Premium Account
- You get the dual benefit of an FCNR(B) deposit along with a forward contract which will yield higher returns.
- The FCNR deposit tenure is 1 to 5 years and the forward contract tenure is also 1 to 5 years
- The minimum deposit is US D 10000 or equivalent
- You can book a forward contract for final return in INR, EURO, GBP, JPY, AUD, and CAD
- FCNR deposit will be maintained in USD only
- Forward contract booking with no charges
- If a forward contract is cancelled, the cancellation charges and any exchange loss have to be borne by the depositor.
- No penalty for premature withdrawal
ICICI Bank
- The FCNR(B) deposit is permitted in 5 currencies
- The minimum deposit in USD and GBP is 1000 and 2000 in CAD, AUD, and SGD
- Deposit ranging from 1 year to 5 years
- The interest rates for different currencies depending on the tenure are given below
- USD-3.75% to 5.85% p.a.
- CAD-3.75% to 4.80% p.a.
- SGD-2.75% to 3.50% p.a.
- GBP-4.75% to 5.50% p.a.
- AUD; 3.75% to 4.255 p.a.
Kotak Mahindra Bank
- Can open the FCNR (B) account in USD, GBP, YEN, AUD, SGD, and EURO
- The auto-renewal facility is available
- Phone banking and net banking facilities provided
- Tenure of deposit 1 to 5 years
- The interest rates depend on the currency and the tenure
- USD: 3.5% to 5.65% p.a.
- GBP: 4.55% to 5.50% p.a.
- EURO: 2.40% to 3.85% p.a.
- AUD: 3.50% to 4.55% p.a.
- SGD: 3.05% to 3.85% p.a.
- The deposit will not earn any interest if closed before 1 year
- Premature withdrawal penalty ranging from 0.10% to 0.25% depending on the currency will be applied
IndusInd Bank
- FCNR (B) deposit can be opened in GBP, USD, CAD, AUD, JPY, and EURO
- Tenure of deposit ranging from 1 year to 5 years
- No interest will be paid if a deposit is closed before 1 year
- The interest rates for the deposit are as given below:
- USD: 4.75% to 5.85% p.a.
- GBP: 4.50% to 5.60% p.a.
- CAD: 4% to 5% p.a.
- AUD: 4.50% to 4.75% p.a.
- JPY: 2.30% to 2.40% p.a.
- EURO: 2% to 3.75% p.a
Canara Bank
- FCNR (B) account can be opened in GBP, USD, CAD, AUD and EURO
- Deposit tenure is from 1 year to 5 years
- Auto-renewal permitted only once after maturity
- The deposit will not earn any interest if closed before 1 year.
- A premature withdrawal penalty will be collected if closed after the completion of 1 year
- The rate of interest on the FCNR (B) deposit is given below:
- USD: 4% to 5.50% p.a.
- GBP: 3% to 4.755 p.a.
- EURO: 1.50% to 2.50% p.a.
- AUD: 3% to 3.75% p.a.
- CAD: 3.50% to 4.50% p.a.
Why Choose an FCNR Account in 2023?
The reasons for choosing an FCNR account are manifold and they are:
- FCNR accounts are shielded from foreign exchange rate risks because they are held in a foreign currency.
- FCNR accounts mitigate exchange rate risks by denominating funds in foreign currency.
- These deposit accounts are available in various major currencies like USD, GBP, AUD, and more.
- Interest earned on FCNR account deposits in India is exempt from Income Tax.
- FCNR accounts allow joint ownership, permitting 2 or more NRIs to share an account, though joint ownership with Indian residents is not permitted.
- Both principal and interest can be freely repatriated to the depositor’s home country without restrictions.
- After the first year, FCNR account lock-in periods can be terminated.
- Account holders benefit from compounded interest calculated semi-annually after the first year.
- FCNR holders can secure rupee loans for investments in India, repayable from maturity proceeds.
- Rupee loans against FCNR deposit accounts can be used for investments in India or abroad and can be repaid from maturity payouts. Some banks also offer loans against FCNR accounts as collateral.
- Interest rates for FCNR Deposit accounts are set by authorised banks within the upper limit determined by the RBI.
- An overdraft facility can be availed against your FCNR Deposit account.
- Both the principal amount and interest earned in FCNR accounts are fully repatriable, ensuring complete transferability.
How to Open an FCNR Account Online?
The steps for opening an FCNR Account online are:
- Visit the official website of the bank
- Choose the NRI option on the dashboard
- Under NRI Accounts choose FCNR Deposits
- Fill in the application form and submit
- Request for a callback
- Agree to the terms and conditions
- A representative of the bank will contact you and assist you with further formalities to open the account.
How to Open an FCNR Account Offline?
To open an FCNR Account offline
- Visit the bank branch
- Collect the account opening form
- Fill in the form with the required information and submit it along with the necessary documents.
- The bank will open the account after verification of the application and documents.
- The deposit amount can be by way of forward inward remittance or transfer from other NRE accounts.
Documents Required for Opening FCNR Account
- Address Proof in India (not mandatory)
- Address proof of the country of residence
- PAN
- NRI Status Proof
- Residence Visa
- Work/Residence permit
- PIO or OCI card (should be valid)
- Signed and filled in PIO declaration for PIOs
- NRI Seafarers are to produce the current work contract and copy of CDC with disembarkation stamp on the last pate & FEMa declaration
- 2 Passport size photograph
- FCNR Account opening form
Copies of the documents have to be submitted and originals have to be produced for verification
How to Transfer Funds to FCNR Accounts?
Transfer of funds to FCNR Account can be by way of
- Foreign Inward Remittance
- Foreign currency notes or traveller’s cheques brought in by the depositor or the joint account holder (NRI) during their visit to India
- Direct transfer through wire transfer
- Transfer of funds from existing FCNR or NRE accounts.
Difference Between FCNR, NRO & NRE Accounts
The key differences between FCNR, NRO and NRE accounts are:
FCNR | NRE | NRO |
Deposit in foreign currency | Deposit in foreign currency | Deposit in Indian Rupees |
Withdrawal in foreign currency | Withdrawal in Indian Rupees | Withdrawal in Indian Rupees |
Fully repatriable | Fully repatriable | Interest fully repatriable and principal repatriable with limitations |
Loan against FCNR deposit in Indian Rupees and Foreign Currency | Loan against NRE deposits in Indian Rupees | Loan against NRO deposit in Indian Rupees |
Joint Account with NRI only | Joint account with NRI only | Joint account with NRI and Resident Indian family member |
Interest is not taxable in India | Interest is tax-free in India | Tax at 30% on interest earned |
Only term deposits can be opened | Savings accounts, current accounts, and term deposits can be opened | Savings accounts, current accounts and term deposits can be opened. |
FCNR Accounts FAQ’s:-
The currencies permitted for FCNR (B) Accounts are USD, GBP, AUD, CAD, SGD, YEN, and EURO
The tenure for FCNR (B) accounts is between 1 year to 5 years
Yes. Premature withdrawal is permitted in FCNR Accounts. No interest will be paid if withdrawn before 1 year. If withdrawn after 1 year a premature withdrawal penalty will be collected.
Yes. FCNR accounts can be opened jointly with another NRI.
Yes. Both principal and interest in FCNR deposits are repatriable.