Foreign Currency Non-Resident Deposit (FCNR)

• Deposits can be maintained for a period of 1 year to 5 years
• Deposits in FCNR deposit account should be for a minimum one year period and for maximum five year period and can be renewed on maturity
• FCNR deposits can be opened only in the form of Term Deposit and not Recurring deposits

• Foreign inward remittance
• Traveller's cheques or foreign currency tendered by the account holder personally
• Transfer from existing NEW or FCNR deposits
• FCNR deposits are exempt from tax liability

Principal amount and interest earned are fully repatriable

• Interest on the deposits accepted shall be paid on the basis of 360 days to a year
• Interest on FCNR deposits shall be calculated as below:
  • For deposits upto one year, at the applicable rate without any compounding effect
  • For more than 1 year, at intervals of 180 days and thereafter for remaining actual number of days may be compounded

• USD- No penalty for individual deposit below USD 1 million.
• EURO- No penalty for individual deposit below EURO 1 million.
• GBP - No penalty for individual deposit below GBP 750,000.
• JPY- No penalty for individual deposit below JPY 125 million.
• AUD- No penalty for individual deposit below AUD 1.5 million.
• CAD- No penalty for individual deposit below CAD 1.5 million.
• For FCNR Deposits qualifying for no penalty as mentioned above, interest rate shall be prevailing as on the date of deposit, as applicable for the period the deposit has remained with the bank or the contracted rate, whichever is lower
• For FCNR Deposits qualifying for penalty as mentioned above, interest rate shall be 1% below the card rate prevailing as on the date of deposit, as applicable for the period the deposit has remained with the bank or 1% below the contracted rate, whichever is lower
• In case the FCNR deposit is closed prematurely, before completion of the minimum period of 1year, no interest shall be paid for the said term deposit

• The bank may, at its discretion renew and overdue NRE or FCNR deposit or a portion thereof provided the overdue period from the date of maturity till the date of renewal (both days inclusive), does not exceed 14 days and at the time of renewal banks are required to apply the rate prevailing on the date of renewal or on the date of maturity whichever is lower
• In case the overdue period exceeds 14 days, banks are free to fix their own rate for the overdue period if the entire amount or a part thereof is kept as a fresh deposit

• The depositor who returns to India for good may be allowed to continue the deposit till maturity of the deposit at the contracted rate of interest, if desired. However, except the provisions relating to rate of interest and reserve requirements as applicable to FCNR (B) deposits, for all other purposes such deposit would be treated as resident deposits from the date of return of the account holder to India. Premature withdrawal of such deposits shall be subject to penal provisions of the scheme
• The depositor may convert his deposits into RFC accounts. If the FCNR deposit is converted into RF account, then penalty clause is not applicable
• Banks may pay interest at its discretion at the time of conversion of FCNR (B) account into RFC or Resident Rupee account, even if the same has not run for a minimum period of 1 year, subject to the condition that the rate of interest should not exceed the rate payable on SB deposit held under RFC Account scheme

• Loans may be granted in rupees against the security of FDs subject to usual norms except for the purpose of relending or carrying on agricultural or plantation activity or for investment in real estate.

  Interest Rates on NRI Deposits

• FCNR deposits stands for Foreign Currency Non-Repatriable account deposits. This is a Fixed Deposit in foreign currency and not a savings account.
• Available in 6 major currencies like USD, GBP, EUR, CAD, AUD & JPY, for a period from 1 to 5 years
• Interest is payable in the same currency of the deposit. Both principal and interest earned can be freely repatriated
• Interest earned on FCNR deposits is not subjected to income tax in India.
• FCNR account can be opened jointly with other NRIs, PIOs or OCIs
• Nomination facility is permitted in favour of one person only, which can either be Resident or NRI.
• Premature withdrawal is permitted before completion of the selected term and is subjected to penalty. Moreover, no interest is payable if the deposit is closed within a year
• Recurring deposits are not allowed under this scheme