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    FCNR Fixed Deposit

    A Non-Resident Indian (NRI) or Person of Indian Origin (PIO) can invest and maintain a term deposit in foreign currency in an account called FCNR (Foreign Currency Non-Resident Account). They can also earn interest from this term deposit. Only a few foreign currencies are accepted as deposit in FCNR Fixed Deposit accounts. The list of currencies that are accepted are:

    • Euro
    • BP (British Pound)
    • USD (US Dollar)
    • AUD (Australian Dollar)
    • JPY (Japanese Yen)
    • CAD (Canadian Dollar)

    These accounts are not savings accounts rather they are fixed deposits accounts.

    FCNR term deposits rates

    As per the SBI (State Bank of India) website the updated FCNR rates of interests on investing deposit in different currencies are:

    PERIOD GBP USD JPY AUD CAD EURO
    5 Years 1.90% 3.29% 0.05% 2.82% 2.45% 0.15%
    4-5 Years 1.82% 3.25% 0.05% 2.70% 2.39% 0.10%
    3-4 Years 1.71% 3.16% 0.05% 2.34% 2.31% 0.01%
    2-3 Years 1.56% 3.04% 0.05% 2.14% 2.18% 0.01%
    1-2 Years 1.34% 3.09% 0.02% 1.97% 2.04% 0.01%
    1 Year 1.34% 3.09% 0.02% 1.94% 2.04% 0.01%

    Some of the advantages of maintaining term deposits in FCNR are:

    • A deposit in an FCNR account is maintained in foreign currency which eliminates the problem of dealing with constant fluctuation of currency conversion rates.
    • The maturity term of these deposits ranges from 1 to 5 years.
    • The interest rates earned on these deposits are regulated by the RBI and are the same in all banks across the country although the rates of interest are generally higher than those provided by the countries wherein the NRI is residing.

    How does an NRI or PIO transfer funds to an FCNR account?

    In an FCNR account held by an NRI or PIO, money can only be deposited by overseas held funds. The different ways in which they can fund the account is:

    • The PIO or NRI can transfer funds from their overseas account to the FCNR account. This can be done via wire transfer, cheque transaction or online banking.
    • Funds can be transferred from an existing NRE account.
    • When an NRI or PIO visits the country, foreign currency notes or travelers cheques can be used to fund the FCNR account.

    Read more about: Pros and Cons of FCNR deposit

    Features of FCNR

    • FCNR (Foreign Currency Non-Resident) account can be only be opened by a PIO or NRI.
    • As the name states, a Foreign Currency Non-Resident account can only be opened with foreign currencies which eliminates the risk of fluctuating conversion rates.
    • An interest is paid on the FCNR account. It is controlled by the RBI and is the same across all banks.
    • The FCNR is not a savings account but is a term deposit. The term should have a minimum maturity of 1 year and a maximum maturity period of 5 years.
    • This account also has a nomination facility. The nominee can be any NRI, PIO or resident Indian.
    • The NRI or PIO can even apply for a loan facility against an FCNR account but these loans can't be used for real-estate, agricultural activities, or re-lending.
    • The currency available in the account can be changed to another currency but the cost incurred due to the difference in the value of the currencies is to be beared by the account holder.
    • The interest earned on these accounts are completely tax free and so is the principal. Although these accounts are subjected to wealth tax.

    Frequently asked questions

    1. Can an FCNR holder transfer funds from a third party account?  
    2. Funds can be transferred from a third party account only if the person who sends money to the FCNR account and the person who receives the money from the account are the same.

    3. What is the consequence when an FCNR account holder’s fixed deposit matures and he or she forgets about it?
    4. In this case, most banks will automatically renew the fixed deposit account and the account holder will keep earning the interest on it although there is an option to stop the automatic renewal. The account holder can open the account with the bank under non-renewal mode and give additional instructions as to what the bank should do on maturity of the term deposit.

    5. Can an NRI or PIO open an FCNR account as a joint account with another person who is a resident of India?
    6. Yes, an NRI or PIO cannot open an FCNR account as a joint account with another person who Is a resident of India.

    7. Is an FCNR account holder liable to protection against fluctuation in the value of the Indian currency?
    8. Since any funds in an FCNR account are to be maintained in the respective foreign currency and conversions into Indian rupee is not allowed, FCNR account holders are not affected by fluctuation in the Indian currency.

    9. Is interest earned on an FCNR account taxable?
    10. No, interest earned on an FCNR account is not taxable.

    11. Can loans related to an FCNR account be paid through local resources?  
    12. Yes, loans related to an FCNR account can be paid through local resources.

    13. What happens to the FCNR account of the NRI when he or she returns to India?
    14. For an NRI returning to India, he or she can wait till the time the FCNR account matures and then convert it into an RFC account.  

    15. Is there an exchange loss when a returning NRI transfers funds from an FCNR account to an RFC account?
    16. No, there is no exchange loss when a returning NRI transfers funds from an FCNR account to an RFC account.

    17. Can funds be withdrawn from the FCNR account before the deposit has matured?
    18. Yes, a withdrawal is allowed from the FCNR account before the term has matured at the    discretion of the bank but there is a penalty charge levied for the withdrawal. For premature withdrawals concerning FCNR accounts, no interest is to be paid by the bank to the account holder and further money may be charged by the bank to cover swap costs.

    FCNR Fixed Deposit Reviews

    • YES Bank Fixed Deposit
      "Fraud by Yes Bank"
      0.5 1.0/5 "Really Bad"
      Yes Bank has not credited Interest for my Fixed Deposit. On enquiring they gave me a story that the interest amount has been adjusted towards TDS. They have not provided credit entry for the interest and the debit entry for the TDS respectively.
      Was this review helpful? 0
      , bhopal
      Reviewed on Jan 11, 2019
    • ICICI Bank Fixed Deposit
      "Smart Investment"
      0.5 5.0/5 "Blown Away!"
      In ICICI fixed deposit interest rate is around 6.75% per annum, I opened the FD through online. I have invested Rs. 1 lakh they wont take any charges for the pre matured fixed interest. I believe the interest rate is good compared to the government bank.
      Was this review helpful? 2
      , yamuna nagar
      Reviewed on Jan 10, 2019
    • Kotak Fixed Deposit
      "Average service"
      0.5 3.0/5 "Satisfactory"
      I am having a Fixed Deposit account with Kotak Mahindra bank, they provide good services when compared to other banks. I get good interest rate in returns after the maturity period which is after 3 years. Customer support is average with Kotak Mahindra bank.
      Was this review helpful? 1
      , chennai
      Reviewed on Jan 10, 2019
    • HDFC Bank Fixed Deposit
      "Hassle free"
      0.5 5.0/5 "Blown Away!"
      I also have a fixed deposit account with HDFC Bank. The process to open this account is easy. I can do it online. They also offer a good rate of interest on the account. The bank has always been up to the mark to ban with. It is very convenient and easy.
      Was this review helpful? 2
      , noida
      Reviewed on Jan 09, 2019
    • IOB Fixed Deposit
      "Better Banking Experience"
      0.5 4.0/5 "Great!"
      I have invested a fixed deposit with Indian Overseas Bank. My wife has recommended me about this bank since she is working over there. I invested the money of Rs. 50000. I don't remember about the tenure period. Before 1 years, i have invested the money with them.
      Was this review helpful? 0
      , tiruchirapalli
      Reviewed on Jan 09, 2019
    • ICICI Bank Fixed Deposit
      "Good Deposit"
      0.5 5.0/5 "Blown Away!"
      I have invested a fixed deposit with ICICI. There is no reason for selected this bank. They have offered me a interest rate of 6.5% and there is no processing fee. I have invested the money 8 months before. This is a one year plan. I'm happy about the services provided by the ICICI for this account
      Was this review helpful? 1
      , thane
      Reviewed on Jan 04, 2019
    • Corporation Bank Fixed Deposit
      "Average"
      0.5 4.0/5 "Great!"
      I had account with Corporation Bank and its very old one. I put fixed deposit before 3 to 4 years. The interest rate was around 7% which was minimum compared to others but am satisfied. I have deposited for 5 years. Actually have not taken any benefits, just have invested. The customer service was okay.
      Was this review helpful? 3
      , pune
      Reviewed on Jan 04, 2019
    • HDFC Bank Fixed Deposit
      "Good service"
      0.5 4.0/5 "Great!"
      I do have a fixed deposit account with HDFC Bank. They are giving good interest. I can manage this account on line. I have chosen HDFC because of bank financial is good. I have just started long time, The process was very quick and it was done through on line.
      Was this review helpful? 3
      , thane
      Reviewed on Jan 02, 2019
    • SBI Fixed Deposit
      "Best Investment plan"
      0.5 5.0/5 "Blown Away!"
      I have taken fixed deposit account in State Bank Of India . They are not charging any charges for the account . I used to get income tax benefits . Am satisfied with the customer service and response.They are giving good rate of interest . Overall am happy with my account .
      Was this review helpful? 4
      , ahmedabad
      Reviewed on Dec 29, 2018
    • review Fixed Deposit
      "Good online features on FD"
      0.5 5.0/5 "Blown Away!"
      In Saraswat bank they are providing the interest around 7% per annum, the minimum amount Rs. 5000 to max, still my FD is running with this bank. The online options are excellent without visiting I can track the interest and deposit amount through online.
      Was this review helpful? 1
      , pune
      Reviewed on Dec 17, 2018
    • HDFC Bank Fixed Deposit
      "Convenient FD with HDFC"
      0.5 5.0/5 "Blown Away!"
      In HDFC I can deposit for minimum of Rs. 5000 to max amount. I done the investment of one time payment around Rs.6 lakhs. I can chose the tenure period based on the convenient, it gives the interest of 7% its maximum. I can open and close the account through online.
      Was this review helpful? 5
      , pune
      Reviewed on Dec 17, 2018
    • SBI Fixed Deposit
      "Very Good Service"
      0.5 4.0/5 "Great!"
      I had made this investment pretty long time back and the services which they had provided so far has been good. The interest rate with them has been good and the growth with the investment has also been good. Their customer support has been helpful in guiding with everything.
      Was this review helpful? 8
      , bangalore
      Reviewed on Dec 14, 2018
    • YES Bank Fixed Deposit
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      It has been a good service which they had been providing so far and i had started this investment a log time back. Their customer support has been helpful in guiding me in the investment plans and explaining with the growth of the investment. The interest rate with them has also been good.
      Was this review helpful? 3
      , bangalore
      Reviewed on Dec 14, 2018
    • Citibank Fixed Deposit
      "Not satisfied with the service"
      0.5 1.0/5 "Really Bad"
      I had started this investment a pretty long time back and they had been providing a good service. Their customer support has not been responsive and i do not suggest any one to make an investment through them. There has not been a good growth with the investment.
      Was this review helpful? 1
      , bangalore
      Reviewed on Dec 14, 2018
    • SBI Fixed Deposit
      "Good Investment Plan"
      0.5 4.0/5 "Great!"
      I have taken fixed deposit account in STATE BANK OF INDIA . They are not charging any charges for the account . I used to get income tax benefits . Am satisfied with the customer service and response.They are giving good rate of interest . Overall am happy with my account .
      Was this review helpful? 4
      , mumbai
      Reviewed on Dec 12, 2018
    • Post Office Fixed Deposit
      "Good investment plan"
      0.5 5.0/5 "Blown Away!"
      I have started investing in the fixed deposit almost more than 5 years. I have invested a variable amount in different times. They have offered me a interest rate of 7.5%. The response was good. I have chosen the post office because of the safe and security.
      Was this review helpful? 12
      , guwahati
      Reviewed on Dec 12, 2018
    • YES Bank Fixed Deposit
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have the fixed deposit account with the Yes bank and the interest rate they have given me is good, also the customer service is good too they have co-ordinated with me well they time to time update me about there date of pay my next fixed deposit date.On line banking services are fine one too and am really happy with them.
      Was this review helpful? 0
      , ahmedabad
      Reviewed on Dec 11, 2018
    • Axis Bank Fixed Deposit
      "Average bank to avail fixed deposit"
      0.5 4.5/5 "Excellent!"
      I have chosen the Axis bank for my fixed deposit. I have deposited around of Rs. 50000. Since they are providing very good services in their branch. They have offered me a interest rate of 6.5%. I put the money in 2015. I have visited their branch many times and the service is very much prompt. I had no issues with them.
      Was this review helpful? 2
      , hyderabad
      Reviewed on Dec 11, 2018
    • ICICI Bank Fixed Deposit
      "Satisfactory"
      0.5 5.0/5 "Blown Away!"
      My fixed deposit is with ICICI Bank. I had to go to the bank and meet the executive and open the account. I can close the account online. There is a lock in period for 12 to 13 months. The interest I earn is satisfactory. I have a deposit of 70K. Overall good.
      Was this review helpful? 0
      , new delhi
      Reviewed on Dec 07, 2018
    • Punjab National Bank Fixed Deposit
      "Good Investment Plan"
      0.5 5.0/5 "Blown Away!"
      I have taken fixed deposit account in Punjab National Bank . They are not charging any charges for the account . I used to get income tax benefits . Am satisfied with the customer service and resonance.They are giving good rate of interest . Overall am happy with my account .
      Was this review helpful? 1
      , new delhi
      Reviewed on Dec 06, 2018
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