An FCNR account is a fixed deposit account for Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs) that enables them to keep their earnings in a foreign currency while saving in India. It provides the facility to earn interest without risking currency fluctuations because the deposits are kept in foreign currency.
Features of an FCNR Account
1. Purpose
- Suitable for NRIs and OCIs who wish to save foreign currency and earn interest in India.
- Safeguards savings from exchange rate volatility.
2. Deposit & Withdrawal Rules
- Deposits are accepted only in foreign currencies like USD, GBP, EUR, AUD, CAD, and JPY.
- Funds can be repatriated in full, including the principal and interest.
3. Interest Earnings
- Interest rates on FCNR deposits are greater than international bank deposits.
- The interest is exempt from tax in India and thus is a popular savings option among NRIs.
4. Deposit Tenure
- The FCNR account can be a fixed deposit account with the tenure of 1 to 5 years.
- Premature withdrawal is subject to charges, as per the bank policy.
5. Repatriation of Funds
- Principal and interest can be freely repatriated to any nation without any limit.
- There is no fund transfer limit, which makes it easy for NRIs who deal with money abroad.
6. Joint Account Holding
- May be opened jointly with another NRI or OCI.
- May not be held jointly with a resident Indian.
