All you have to know about FCNR account, their features and their benefits.


FCNR Accounts have become a popular tool for investment for NRIs in India. With the coming of Union Budget 2019, many regulatory changes have taken place. The interest rates have been revised and a merger of NRI portfolio investments with foreign portfolio investments (FPI) has been proposed. This will encourage expanded NRI investments in equities and bank accounts with guaranteed returns.

FCNR Account- What it is?

FCNR is an acronym for Foreign Currency Non-Resident (FCNR) bank account, which is a term deposit account that allows the Non-Resident Indian (NRI) or a Person of Indian Origin (PIO) to transfer their foreign income to India in the same currency in which they are earning. This secures them against the exchange rate prospects.  

It is a rewarding choice for NRIs to attract foreign money. In any case, the interest rates offered by these accounts may fluctuate contingent upon the type of currency held and the bank. 

Features of an FCNR account

  • FCNR is a foreign currency-denominated account, where you can invest in the currency of your resident country. 

  • FCNR deposit accounts are not savings account and they range from 1 to 5 years. 

  • You can get both, the principal and the interest repatriated freely in your resident country.

  • Both corporate and non-corporate clients can avail rupee and foreign currency loans against their FCNR deposits anywhere in the world. 

FCNR Account - Advantages 

  • The premium earned from an FCNR account is non-taxable.

  • The candidate (or the NRI) can open an FCNR account with at least two NRI shared service holders.

  • You have the choice to choose different currencies - Pound, Sterling, US Dollar, Yen, and Euro. 

  • An FCNR account lets you repatriate the principal and the interest earned to the country of residence/origin. 

  • The interest rates are accumulated on a half-yearly premise and are payable after the end of the main year. 

  • The ownership may range from 1 to 5 years.

  • When in need, the NRI can also apply for a loan against the assets held in his FCNR account. Although the credit sum will be in INR and can be recompensated from the amount you gain on the maturity of your deposit. 

FCNR Account - Disadvantages  

  • If the funds are deposited in an FCNR account that is held in an unreliable or feeble bank, the bank may be not able to repay the returns on maturity.

  • In case of a monetary emergency, the banks won’t have the option to repatriate the assets.

  • If the deposit is pulled back within 1 year, no profit is owed to the bank. 

  • As mentioned in the beginning, an FCNR deposit is a term deposit account. 

  • Penalties are applicable in the event of untimely withdrawal. 

FCNR accounts are legitimate alternatives if you, being an NRI, want to invest your earnings in India since there is no exchange rate risk involved, and is non-taxable.

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