Since interest rates on fixed deposits are higher in India, as compared to western countries, NRIs tend to invest their funds in the country. In order to help NRIs, banks have opened FCNR accounts for NRIs.

FCNR or Foreign Currency Non Resident Bank Account is an account where a Non Resident Indian (NRI) can maintain a fixed deposit with a chosen bank, in foreign currency, and earn interest for the same.

Interest Rates on FCNR Account

Several banks have the option of opening an FCNR account with them. Here are some of them that offer attractive rates of interest on FCNR deposits:

• Bank of Maharashtra – NRIs can get excellent value for their money when they open an FCNR Account with Bank of Maharashtra, which offers rates that are bound to bring a smile on their face. Individuals get great rates, regardless of their investment term and currency, with deposits for 5 years earning the highest interest in the country (depending on the currency chosen). The table below highlights their interest rates.

• City Union Bank – High interest rates offered by City Union Bank ensure NRIs get the best bang for their buck, with deposits invested for longer terms offering greater returns. The interest rates offered ensure that investors get decent returns on investment, regardless of the currency. The table below highlights their interest rates.

• Karnataka Bank – Karnataka Bank would be a smart choice for NRIs looking at FCNR accounts for short periods. Interest rates on deposits ranging between 1 to 3 years are comparatively higher than most other banks, regardless of the chosen currency. The table below highlights their interest rates.

Features of FCNR Account

One of the major benefits about having an FCNR account is that the interest earned is exempted from tax. The principal amount deposited in the account is also exempted from Wealth Tax in India. Here are some features of the FCNR account:

• Only Person of Indian Origin (PIO) or NRIs can open an account.
• The account can be opened in US Dollar, British Pound, Euro, Japanese Yen, Australian Dollar, and Canadian Dollar.
• Interest on the FCNR account is paid regularly.
• The account can be opened jointly with resident Indians or other NRIs
• With nomination facility available, the individual opening the account can designate resident Indian/PIO