FCNR Account

An NRI or Non-Resident Indian is an Indian citizen living in a foreign country for a defined period as per the NRI eligibility condition. The Government of India has made many provisions for NRIs so that they are also able to invest their money in their home country.

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Disclaimer: #The investment risk in the portfolio is borne by the policyholder. Life insurance is available in this product. The maturity amount of Rs 1 Cr. is for a 30 year old healthy individual investing Rs 10,000/- per month for 30 years, with assumed rates of returns @ 8% p.a. that is not guaranteed and is not the upper or lower limits as the value of your policy depends on a number of factors including future investment performance. In Unit Linked Insurance Plans, the investment risk in the investment portfolio is borne by the policyholder and the returns are not guaranteed. Maturity Value: ₹1,05,02,174 @ CAGR 8%; ₹50,45,591 @ CAGR 4%. *Tax benefits and savings are subject to changes in tax laws. All plans listed here are of insurance companies’ funds.

The NRI, in order to invest in India, has to have any of the 3 types of accounts:

FCNR (B) – Foreign Currency Non-Resident (Bank) Account
NRE Account – Non-Resident External Account
NRO – Non-Resident Ordinary Account

If an NRI is willing to opt for the FCNR (B) account, here is the detailed information as to how the Foreign Currency Non-Resident Account works.

What is an FCNR (B) Account?

In simple words, a Foreign Currency Non-Resident Bank Account is a kind of Fixed Deposit Account for NRIs. An FCNR account is offered only to those NRIs who have either an NRE or an NRO account and is considered a lucrative option as it allures foreign remittance. One of the attractive features of an FCNR account is that the money deposited can be in permissible foreign currencies and the interest rate completely depends on the currency type deposited.

Permissible Foreign Currencies

Following are the foreign currencies in which a Non-Resident Indian can deposit their money in the Foreign Currency Non-resident Bank Account.

Abbreviation	Full Form
AUD	Australian Dollar
CAD	Canadian Dollar
CHF	Swiss Franc
EUR	Euro
GBP	Great Britain Pound
HKD	Hong Kong Dollar
JPY	Japanese Yen
SGD	Singapore Dollar
USD	United States Dollar

Features of FCNR (B) Account

The following are the salient features of a Foreign Currency Non-Resident (FCNR) Bank Account:

Foreign Currency Non-Resident Account is a currency-dominated account.
It is not a savings account like NRE or NRO account.
FCNR Account is a term deposit also known as a fixed deposit account.
It comes with a minimum tenure of 1 year and maximum tenure of 5 years.
Tax is exempted on the interest income of your FCNR Account.
Interest earned and the principal amount is fully repatriable.
An overdraft facility is available.
FCNR Account can be opened:

Individually
Jointly with other NRIs, PIOs, or OCIs.

Eligibility Criteria for FCNR Account

If an individual has to open an FCNR (B) account, the following is the eligibility criteria for account opening:

The individual has to be a Non-Resident Indian (NRI) or Person of Indian Origin (PIO) or Overseas Citizen of India (OCI).
A joint account can be held with other NRIs.
The individual must have held an Indian passport issued by the Government of India at any point.
Needs to be a citizen as per the Citizenship Act, 1955.
Minimum deposits to be made for at least 1 year to earn interest.
Interest is paid on 360 days to 1-year basis.

Documents Required to Open FCNR Account

After passing the eligibility criteria option, the following documents are necessary if a person wants to open an FCNR (Foreign Currency Non-Resident) Bank Account:

Valid passport
Passport size photographs
Address proof (of the country the individual is currently residing in)
Indian PAN Card or Form 60
NRI Status proof
Income proof

Premature Withdrawals Under FCNR (B) Account

For premature withdrawals:

Charges are applicable to close the FCNR account pre-maturely depending upon the bank
Interest will be paid as on the date of deposit if the amount is withdrawn prematurely
Interest is not paid if withdrawals are made before the completion of 1 year

Difference Between NRE, NRO, and FCNR (B) Accounts

Particulars	NRE Account	NRO Account	FCNR-B Account
Account Purpose	Account opened with earnings from the foreign residing country and denominated in (INR) Indian Rupee	Account opened with earnings made in India from Indian assets or investments like dividend, rent, interest, etc. and denominated in Indian Rupees	A fixed deposit account is offered to NRIs who have either an NRE / NRO account. Denominated in any of the foreign currencies stipulated by RBI
Account Type	Savings, Recurring, or Current	Savings, Recurring, or Current	Fixed Deposit accounts with a 1 year minimum tenure
Currency denomination	INR	INR	AUD, CAD, CHF, EUR, GBP, HKD, JPY, SGD, USD
Joint holding facility	Can be held with other NRI	Can be held with other Indian residents or NRI	Can be held with other NRI
Tenure of fixed deposits	From 1 to 3 years. For Asset-Liability Management purposes account can be held for a longer period	As applicable to resident accounts	1 to 5 years
Repatriation Facility	Balance is fully repatriable	Interest earned is fully repatriated	Interest earned and principal amount are fully repatriable
Exchange rates	Fluctuates with respect to existing exchange rates	Does not fluctuate in any circumstance	Fluctuates with respect to existing exchange rates
Taxability	Tax is exempted on the interest income	Interest income is taxable	Tax is exempted on the interest income

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Past 10 Years' annualised returns as on 01-12-2024

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*All savings are provided by the insurer as per the IRDAI approved insurance plan.

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^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.

#The investment risk in the portfolio is borne by the policyholder. Life insurance is available in this product. The maturity amount of Rs 1 Cr. is for a 30 year old healthy individual investing Rs 10,000/- per month for 30 years, with assumed rates of returns @ 8% p.a. that is not guaranteed and is not the upper or lower limits as the value of your policy depends on a number of factors including future investment performance. In Unit Linked Insurance Plans, the investment risk in the investment portfolio is borne by the policyholder and the returns are not guaranteed. Maturity Value: ₹1,05,02,174 @ CARG 8%; ₹50,45,591 @ CAGR 4%

¶Long-term capital gains (LTCG) tax (12.5%) is exempted on annual premiums up to 2.5 lacs.

**Returns are based on past 10 years’ fund performance data (Fund Data Source: Value Research).