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

Non-Resident Indians (NRIs) who wish to open an account in India have a number of choices to select from resembling NRE Mounted Deposit Account, Non-Resident Extraordinary (NRO) Financial savings Account, and International Foreign money Non-Resident (FCNR) Mounted Deposit Account, and so forth. On this article, we will aid you perceive how NRIs can make the most 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 much like an everyday fastened deposit. Traders on this account will be capable of earn tax-free curiosity on their investments. The rates of interest supplied by an FCNR account rely upon the kind of forex held and the financial institution. It’s a profitable possibility for NRIs when it comes to 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, clients 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 forth.

Word: This checklist is topic to adjustments from the RBI. It might embrace 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 rules of RBI, banks are allowed to simply accept FCNR fastened deposits for a most tenure of 5 years. Nonetheless, in contrast to common home time deposits, FCNR deposits are to be stored for no less than 1 12 months.
  • Guidelines and rules relating to untimely or early withdrawal shall be completely different relying on the banks however untimely withdrawal is just not 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 tip of the primary 12 months. Curiosity is compounded on a half-yearly foundation subsequently.

Eligibility standards:

  • You might be 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 set deposit held in overseas forex therefore it’s protected in opposition to foreign exchange price dangers.
  • FCNR deposit accounts are one of the crucial safe funding choices obtainable for NRIs.
  • Curiosity earned on FCNR deposits in India is exempt from Earnings tax.
  • The principal quantity and curiosity earned are totally repatriable.
  • It may be denominated in a number of main currencies.
  • It may be used as collateral for rupee loans or overseas forex loans.
  • Comparatively high-interest price.

Now let’s take a look at some cons:

  • In case of a monetary disaster, the financial institution might not be capable of 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 won’t be capable of pay proceeds if there are in monetary turmoil.
  • Whereas the curiosity earned on FCNR deposits is tax-free, it might 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 months4.753.653.753.353.253.75
>= 24 months < 36 months4.253.653.753.353.253.75
>= 36 months < 48 months3.6NANANANANA
>= 48 months < 60 months3.35NANANANANA
60 months3.3NANANANANA

HDFC Financial institution:

  • State Financial institution of India (SBI):
>= 12 months < 24 months4.253.700.503.502.600.02
>= 24 months < 36 months3.452.350.503.002.750.05
>= 36 months < 48 months3.702.450.503.153.000.05
>= 48 months < 60 months3.802.450.503.203.200.05
60 months3.902.450.503.253.450.05

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Foreign moneyUSD
Beneath 5 million
5 million & above
>= 12 months < 24 months5.25.23.750.013.353.50.01
>= 24 months < 36 months3.753.753.250.013.753.50.01
>= 36 months < 48 months3.63.62.450.013.83.450.01
>= 48 months < 60 months3.353.352.450.0143.350.01
60 months3.33.32.450.
Foreign moneyUSD
Beneath 5 million
5 million & above
>= 12 months < 24 months5.005.004.352.55NA3.654.10
>= 24 months < 36 months4.054.053.802.05NA3.303.05
>= 36 months < 48 months3.603.603.551.90NA3.30NA
>= 48 months < 60 months3.503.50NANANANANA
60 months3.103.25NANANANANA

Closing ideas:

FCNR deposit is without doubt one of the most secure types of funding for NRIs and OCIs, the place they’d be capable of earn aggressive curiosity together with no related overseas forex danger. The deposit performs a big function when it comes to attracting remittances from NRIs and elevated inward remittances from NRIs, resulting in extra foreign exchange reserves, which in flip, cut back the present account deficit of the nation, which is without doubt one of the essential 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 fastidiously take into account the dangers related to the banks by 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.

In case you are on the lookout for a SEBI registered Funding Adviser go to mymoneysage.in

Additionally learn: Do you’ve got your Retirement plan in place?


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