FCNR Deposits (International Foreign money Non-Resident deposits) Very best for NRIs? – myMoneySage Weblog

Non-Resident Indians (NRIs) who want to open an account in India have a number of choices to select from similar to NRE Fastened Deposit Account, Non-Resident Atypical (NRO) Financial savings Account, and International Foreign money Non-Resident (FCNR) Fastened Deposit Account, and so on. On this article, we will assist you perceive how NRIs can reap the benefits of FCNR deposits.

FCNR account stands for International Foreign money Non-Residential Account. It’s a time period deposit account supplied to NRE/NRO account holders and is just like an everyday mounted deposit. Traders on this account will have the ability to earn tax-free curiosity on their investments. The rates of interest supplied by an FCNR account rely upon the kind of foreign money held and the financial institution. It’s a profitable possibility for NRIs by way of attracting overseas remittances.

FCNR Deposits (Foreign Currency Non-Resident deposits) Ideal for NRIs

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As per the principles laid down by the Reserve Financial institution of India, prospects can deposit their overseas financial savings in any of the next currencies:

  • US {Dollars} – $
  • Canadian {Dollars} – C$
  • Nice Britain Pound (GBP) or Pound Sterling – £
  • Japanese Yen – ¥
  • Euro – €
  • Australian {Dollars} – A and so on.

Word: This record is topic to adjustments from the RBI. It could embody the likes of the Singapore greenback, Swiss Franc, Danish Krone, and Swedish Krona amongst others. Prospects are suggested to contact the respective financial institution about the identical.

Some traits of the FCNR account:

  • As per the present laws of RBI, banks are allowed to simply accept FCNR mounted deposits for a most tenure of 5 years. Nevertheless, in contrast to common home time deposits, FCNR deposits are to be stored for no less than 1 12 months.
  • Guidelines and laws relating to untimely or early withdrawal will likely be totally different relying on the banks however untimely withdrawal isn’t permitted if the depositor has already availed a mortgage in opposition to the deposit.
  • Rates of interest on FCNR time period deposits are payable after the top of the primary 12 months. Curiosity is compounded on a half-yearly foundation subsequently.

Eligibility standards:

  • You’re an NRI (Non-Resident Indian).
  • You’ve gotten a PIO card (Individual of Indian origin) / OCI card (Abroad Citizen of India).

Additionally learn: Market Outlook November 2022

Professionals of investing in an FCNR account:

  • FCNR (B) is a hard and fast deposit held in overseas foreign money therefore it’s protected in opposition to foreign exchange charge dangers.
  • FCNR deposit accounts are one of the crucial safe funding choices accessible for NRIs.
  • Curiosity earned on FCNR deposits in India is exempt from Earnings tax.
  • The principal quantity and curiosity earned are absolutely repatriable.
  • It may be denominated in a number of main currencies.
  • It may be used as collateral for rupee loans or overseas foreign money loans.
  • Comparatively high-interest charge.

Now let’s have a look at some cons:

  • In case of a monetary disaster, the financial institution could not have the ability to repatriate the funds.
  • FCNR deposit is obtainable for time period deposits solely.
  • There could also be some fines for untimely redemption in some banks (It varies).
  • Some banks may not have the ability to pay proceeds if there are in monetary turmoil.
  • Whereas the curiosity earned on FCNR deposits is tax-free, it could be taxable within the nation of residence of the NRI.

FCNR FD charges in some main banks together with denominating currencies:

(Rates of interest (% each year) as of  December 2022)

>= 12 months < 24 months 4.75 3.65 3.75 3.35 3.25 3.75
>= 24 months < 36 months 4.25 3.65 3.75 3.35 3.25 3.75
>= 36 months < 48 months 3.6 NA NA NA NA NA
>= 48 months < 60 months 3.35 NA NA NA NA NA
60 months 3.3 NA NA NA NA NA

HDFC Financial institution:

  • State Financial institution of India (SBI):
>= 12 months < 24 months 4.25 3.70 0.50 3.50 2.60 0.02
>= 24 months < 36 months 3.45 2.35 0.50 3.00 2.75 0.05
>= 36 months < 48 months 3.70 2.45 0.50 3.15 3.00 0.05
>= 48 months < 60 months 3.80 2.45 0.50 3.20 3.20 0.05
60 months 3.90 2.45 0.50 3.25 3.45 0.05

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Foreign money USD
Under 5 million
5 million & above
>= 12 months < 24 months 5.2 5.2 3.75 0.01 3.35 3.5 0.01
>= 24 months < 36 months 3.75 3.75 3.25 0.01 3.75 3.5 0.01
>= 36 months < 48 months 3.6 3.6 2.45 0.01 3.8 3.45 0.01
>= 48 months < 60 months 3.35 3.35 2.45 0.01 4 3.35 0.01
60 months 3.3 3.3 2.45 0.01 4.05 3.3 0.01
Foreign money USD
Under 5 million
5 million & above
>= 12 months < 24 months 5.00 5.00 4.35 2.55 NA 3.65 4.10
>= 24 months < 36 months 4.05 4.05 3.80 2.05 NA 3.30 3.05
>= 36 months < 48 months 3.60 3.60 3.55 1.90 NA 3.30 NA
>= 48 months < 60 months 3.50 3.50 NA NA NA NA NA
60 months 3.10 3.25 NA NA NA NA NA

Closing ideas:

FCNR deposit is without doubt one of the most secure types of funding for NRIs and OCIs, the place they’d have the ability to earn aggressive curiosity together with no related overseas foreign money danger. The deposit performs a major function by way of attracting remittances from NRIs and elevated inward remittances from NRIs, resulting in extra foreign exchange reserves, which in flip, scale back the present account deficit of the nation, which is without doubt one of the fundamental causes for the depreciation of the rupee. Therefore the funding not solely gives a protected type of funding for the people but additionally advantages the nation. People wanting into investing within the scheme ought to rigorously contemplate the dangers related to the banks by means of which they’re investing.


This text shouldn’t be construed as funding recommendation, please seek the advice of your Funding Adviser earlier than making any funding resolution.

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