A Foreign Currency Non-Resident Deposit is a specialised FD designed specifically for individuals who are not residents of India. This account lets you accumulate interest on their deposited funds while safeguarding them from foreign exchange rate fluctuations. This approach enables you to invest the amount to grow in the currency you made the investment.
An FCNR Deposit also offers favourable interest rates. This way, you can expand your interest income while enjoying the tax-free benefit. While these are a few things worth knowing about this facility, here are others:
Features
- Fund maintenance
An FCNR Account lets you deposit funds in the following currencies:
- US Dollar (USD)
- Australian Dollar (AUD)
- Great Britain Pound (GBP)
- Canadian Dollar (CAD)
- Hong Kong Dollar (HKD)
- Singapore Dollar (SGD)
It maintains the invested money in your chosen currency throughout the deposit tenure. For example, if you prefer USD, the deposited funds are maintained in the same.
- Tenure
The FCNR FD term depends on your banking partner’s policies. In most cases, it ranges between a year to five years. Some banks let you extend the duration upon maturation.
- Minimum deposit amount
There is no minimum deposit requirement in this NRI FD.
- Repatriability
Like an NRE Account, the principal amount and the interest earned are fully repatriable in an FCNR FD.
- Taxation
In India, the interest earned through FCNR FDs is exempt from taxes.
- Rate of interest
Most banks offer promising FCNR Deposit rates to help holders amplify their interest income.
Eligibility criteria
You are eligible to avail of this facility if:
- You are an NRI and hold proof of the same
- They have a Person of Indian Origin card/ Overseas Citizen of India card
Documents required to open an FCNR FD
The documentation process for opening this FD is like any NRI Account. For reference, here are the documents you may be asked to present:
For Non-Resident Indians
- A valid Indian passport
- Proof of NRI status (Employment/Residence Visa copy/Residence permit)
- Proof of residence in India and overseas as per the Customer Identification Policy (CIP)
- Form 60 or a copy of Permanent Account Number (PAN) card
- A coloured, recent passport-sized photograph
For Person of Origin
- A valid Indian passport
- A valid PIO/OCI card or any other proof of PIO status approved by CIP
- Proof of residence (Indian and overseas) as per CIP
- Duly filled-in and signed PIO declaration
- A duly filled copy of Form 60 or your PAN Card
- A coloured, recent passport-sized photograph
While these are the basics, your bank can ask you to submit more documents.
Withdrawals
Most banks permit premature withdrawals from your FCNR FD. However, they do not pay you the interest if the withdrawal is made before the completion of a year. Hence, it is best to cross-check this with your bank.
