For all the Non Resident Indians, who are eager to invest in India without the risks associated with currency rate fluctuations, a Foreign Currency Non Resident (FCNR) account is a good option. A Foreign Currency Non Resident (FCNR) account is a kind of savings cum fixed deposit account maintained by a Person of Indian Origin (PIO) or a Non Resident Indian (NRI) in foreign currency.
Currencies that can be maintained
Before 2011, the foreign currencies that could be maintained in an FCNR account were: Pound Sterling (GBP), US dollar, Euro, Canadian dollar, Australian dollar and Japanese Yen. Since October 2011, the deposits could be made in any of the freely convertible currency such as Danish Krone, Swedish Krona, Swiss Frank and so on.
Features of an FCNR account
An NRI or a PIO can open a Foreign Currency Non Resident (FCNR) account for a minimum tenure of 1 year and a maximum tenure of 5 years. The funds in this account should specifically be overseas funds.The account holder can withdraw the account prematurely with a penal interest of 1%. In case the account is closed within a year, no interest will be charged. The rate of interest varies from bank to bank and currency to currency. The interest on FCNR accounts is tax exempted in India. Also, The funds can be freely repatriated between accounts outside India.
Recommended Read :
- Who is a NRI?
- Who is Not An NRI?
- Banking Facilities for An NRI
- Who is a Person of Indian Origin PIO?
- How to Open Fixed Deposits for NRI?
- Home Loan for NRI
- What is An NRE Account?
- What is NRO Account?
- What is FCNR Account?
- Who is a OCI Overseas Citizen of India?
- Overseas Corporate Body – OCB Investment