What is an FCNR Account?
An FCNR account is a term deposit account that enables NRIs to invest their foreign currency earnings in India without incurring currency conversion risks. The account is maintained in 8 foreign currencies, including USD, GBP, JPY, EUR, AUD, CAD, CHF and SGD, offering flexibility and convenience for NRIs.
Features and Benefits of Indian Bank FCNR Accounts
Below are the features and benefits of the Indian Bank FCNR account:
- Multiple Currency Options: Indian Bank FCNR accounts can be maintained in a variety of foreign currencies, ensuring NRIs can deposit in their currency of choice.
- Attractive Interest Rates: These accounts offer competitive interest rates that vary depending on the currency and tenure of the deposit.
- Tax-Free Earnings: The interest earned on FCNR accounts is exempt from income tax in India, making it a tax-efficient savings option.
- Repatriation Facility: Both principal and interest are fully repatriable, enabling NRIs to transfer their funds abroad without hassle.
- Flexible Tenure: Indian Bank offers a tenure range from 1 year to 5 years, allowing customers to choose a term that suits their financial goals.
- Loan Facility: NRIs can avail of loans against their FCNR deposits for personal or business needs, providing liquidity without breaking the deposit.
- Currency Risk Mitigation: Since the account is maintained in foreign currency, depositors are shielded from exchange rate fluctuations, ensuring their savings remain stable.
Eligibility and Documentation
To open an FCNR account with Indian Bank, the applicant must meet the following criteria:
- Be an NRI or Person of Indian Origin (PIO).
- Provide valid identity proof, such as a passport and visa.
- Submit proof of NRI status (employment contract, work visa, or resident permit).
- Address proof and recent passport-sized photographs.
Features of the Indian Bank FCNR Account
Here are some of the features of the Indian Bank FCNR Account. Make sure to go through them before investing:
- Multi-Currency Support: Accounts can be opened in 8 major foreign currencies:
- US Dollar (USD), Euro (EUR), Pound Sterling (GBP)
- Australian Dollar (AUD), Canadian Dollar (CAD)
- Japanese Yen (JPY), Swiss Franc (CHF), and Singapore Dollar (SGD).
- Joint Holding Options:
- With NRIs: Can be opened jointly with other Non-Resident Indians.
- With Residents: Permitted only with "close relatives" (as per Section 6 of the Companies Act) on a Former (NRI) or Survivor (Resident) basis.
- Funding the Account: Deposits can be made via direct remittances from abroad or by transferring funds from existing NRE accounts.
- Tenure: Fixed deposit terms typically range from 1 year to 5 years.
- Account Management: Unlike some other accounts, FCNR accounts cannot be opened or closed by a Power of Attorney (PoA) holder; the account holder must act personally.
Key Benefits of an Indian Bank FCNR Account
These are the benefits of an FCNR Account opened under the Indian Bank:
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Zero Exchange Risk
Since both the principal and interest are maintained and payable in the same foreign currency, you are completely shielded from fluctuations in the value of the Indian Rupee (INR).
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Tax-Free Earnings
Interest earned on FCNR deposits is exempt from income tax in India. Additionally, the balances held in these accounts are exempt from Wealth Tax.
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Full Repatriability
Both the principal amount and the interest accrued are fully and freely repatriable, meaning you can transfer the entire balance back to your country of residence at any time without restriction.
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Liquidity via Loans
You can avail of loans or overdraft (OD) facilities against your FCNR deposit:
- Quantum: Generally up to 90% of the accrued value.
- Margin: A 10% margin requirement is standard.
- Constraint: Premature withdrawal is typically not allowed if a loan is outstanding against the deposit.
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Nomination Facility
Nomination is available for all FCNR accounts. The nominee can be either a resident of India or a resident outside India.
Conclusion
An Indian Bank FCNR account is a smart choice for NRIs looking to grow their foreign currency savings while benefiting from tax exemptions and repatriation facilities. With attractive Indian Bank FCNR rates, flexible tenures, and a reputation for trustworthiness, the bank provides a secure and convenient platform for managing your overseas earnings.
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