FCNR (B) stands for Foreign Currency Non-Resident (Bank) Fixed Deposit Account. It is offered by Indian banks to non-resident Indians (NRIs) and persons of Indian origin (PIOs). The account allows you to deposit and maintain your foreign earnings in foreign currencies such as US Dollar (USD), British Pound (GBP), and Euro (EUR) among others.
In the case of FCNR (B) accounts, the principal and interest are freely repatriable, meaning they can be transferred back to the account holder’s home country without any restrictions. However, these accounts are subject to specific regulations and terms and the interest rates can vary depending on the currency and the tenure.
Learn more about these perks, how to apply for an FCNR account, and other aspects related to it in the following sections:
Since this is a term account, rather than a savings account, it features a minimum tenor of 1 year and a maximum of 5 years. However, if the residency status of an NRI changes during this period, they will be allowed to keep their FCNR accounts open up to the date of maturity.
In addition, this will continue to remain at the previously agreed-upon interest rate.
FCNR account holders can receive loans from banks by pledging their stored funds as collateral
Interest earned on FCNR accounts, including the principal amount, are transferable
Since the funds are held in foreign currency, there are no foreign exchange rate risks as they are transferred in the same currency in which they had been maintained
Any maturity proceeds earned in an FCNR account can be used to repay or settle foreign currency loans availed beyond India
Most FCNR accounts do not feature a minimum deposit amount
In order to open an FCNR account, you will have to provide certain documents to your selected bank or NBFC. These include visa, passport, KYC, and a Foreign Account Tax Compliance Act (FATCA) declaration, along with address and identity proofs. You may also be required to submit your income documents as well.
Following this, you will be provided with your account details and be intimated about any other follow-up actions.
NRIs can open three types of different accounts to store their funds in, namely NRO, NRE and FCNR accounts. These can be opened with most authorised banks and come with their own set of features. The differences between them are as follows:
Particulars |
NRO |
NRE |
FCNR |
Full Form |
Non-Resident Ordinary account |
Non-Resident External account |
Foreign Currency Non-Resident account |
Function |
Allows you to deposit income earned in India |
Allows you to deposit income earned abroad |
Allows you to deposit foreign currency earnings in Indian accounts |
Currency Involved |
INR |
Foreign currencies |
RBI-approved foreign currencies |
Foreign Exchange Risks |
No risks involved |
Subject to such risks |
No risks involved |
Withdrawal Currency |
INR |
INR |
Deposited foreign currency |
Taxation |
Applicable taxes up to 30% |
Non-taxable |
Non-taxable |
Joint Account Opening with Indians |
Allowed |
Not allowed |
Not allowed |
Loan Against Deposits |
Available in INR |
Available in INR |
Available in foreign currencies with some restrictions |
You will be able to transfer funds from your NRE account based in India or any other foreign currency account outside India, to your FCNR account. During the process, this amount will be converted into foreign currency present in the FCNR account at the current exchange rates and deposited accordingly.
However, it is important to remember that you will not be able to fund your FCNR account via a third-party account. With this, you may now have a much better idea about FCNR accounts, and the various concepts linked to it.
This is one of the best ways to go about investing your funds as an NRI due to its guaranteed returns in the applicable foreign currency.