FNCR deposit is a type of fixed deposit which is designed to provide the Non-Resident Indians with an option to park their foreign earnings in the banks in India. For this, they do not need to get their savings converted into Indian Rupee. They can directly deposit it in foreign currency.
FCNR is an acronym for Foreign Currency Non-Resident and this fixed deposit is for NRIs (also PIOs* in some banks). These are not to be treated as saving accounts. The amount is kept in these deposits for a fixed tenure (usually 1 – 5 years).
*PIOs – Persons of Indian Origin
FCNR FD is available for:
NRIs – Non-Resident Indians
PIOs – Persons of Indian Origin, also called as Overseas Indians
These are people who are Indians by birth or descendants of Indian origin (Certain exceptions may apply to those residing in Pakistan and Bangladesh).
As per the rules stated in the Income Tax Act, the following are note-worthy points related to the taxation of FCNR fixed deposits:
As per the rules laid down by the Reserve Bank of India, customers can deposit their foreign savings in any of the following currencies:
Note: This list is subject to changes from the RBI. It may include the likes of Swiss Franc, Danish Krone and Swedish Krona among others. Customers are advised to contact the respective bank about the same.
Repatriation or transfer of funds from one country to another is permitted in FCNR fixed deposits. As per the rules laid down by the Reserve Bank of India,
As per the current regulations of RBI, banks are allowed to accept FCNR fixed deposits for the maximum tenure of 5 years. However, unlike regular domestic time deposits, FCNR deposits are to be kept for a minimum of 1 year.
To put it simply, the tenure for FCNR fixed deposits is 1 year to 5 years.
Banks or service providers may have different rules and regulations regarding premature or early withdrawal.
For instance, the FCNR deposits offered by YES Bank will not provide any FCNR deposit rate of interest if the deposit is withdrawn before the completion of 12 months.
Similarly, Axis Bank may ask or charge a penalty if the withdrawal is done before the stipulated term of minimum 1 year.
In addition to this, premature withdrawal is not permitted if the depositor has already availed the loan against the deposit. In simple terms, it is important to reconfirm the terms applicable to a premature or early withdrawal of these deposits before or while investing in it.
A comparison of different types of non-resident fixed deposit accounts is given below:
| Particulars/Type Account | NRE Non-Resident External | NRO Non-Resident Ordinary | FCNR Foreign Currency Non-Resident |
| Deposit Currency | Foreign currency | Indian Rupee (INR) | Foreign Currency |
| Withdrawal Currency | Indian Rupee | Indian Rupee | Foreign Currency |
| Taxable in India | Not taxable in India | Taxable in India (at 30%) | Not Taxable in India |
| Exchange Rate Risk | Open to risk due to fluctuating foreign exchange rate | No foreign exchange risk involved | No foreign exchange risk involved |
| Repatriability (Transferability) | Fully and freely repatriable | Interest is repatriable; transfer of principal amount comes with certain set limits | Fully and freely repatriable |
| SBI FCNR Term Deposit Interest Rates (% p.a.) | |||||
| Tenure/Currency | USD | GBP | CAD | AUD | JPY |
| 1 year | 2.51 | 1.25 | 0.01 | 2.16 | 0.02 |
| Above 1 year to less than 2 years | 2.51 | 1.24 | 0.01 | 2.16 | 0.02 |
| 2 years to less than 3 years | 2.41 | 1.32 | 0.01 | 2 | 0.05 |
| 3 years to less than 4 years | 2.4 | 1.35 | 0.01 | 2.02 | 0.05 |
| 4 years to less than 5 years | 2.41 | 1.38 | 0.1 | 2.03 | 0.05 |
| 5 years | 2.43 | 1.42 | 0.15 | 2.05 | 0.05 |
| HDFC Bank FCNR Term Deposit Interest Rates (% p.a.) | ||||||
| Period | GBP | USD | Euro | JPY | AUD | CAD |
| 1 year to less than 2 years | 1.21 | 2.26 | 0.01 | 0.01 | 1.41 | 2.18 |
| 2 year to less than 3 years | 1.14 | 2.05 | 0.01 | 0.01 | 1.28 | 2.09 |
| 3 years to less than 4 years | 0.87 | 1.74 | 0.01 | 0.01 | 1.04 | 1.82 |
| 4 years to less than 5 years | 1.21 | 2.06 | 0.01 | 0.01 | 1.40 | 2.16 |
| 5 years | 0.71 | 1.57 | 0.01 | 0.01 | 0.99 | 1.70 |
| ICICI Bank FCNR FD Rates (% p.a.) | |||||||||
| Tenure | USD <350000 | USD >=350000 | GBP | EUR | JPY | CAD | AUD | SGD | HKD |
| >= 12 months < 24 months | 2.49 | 2.24 | 0.99 | 0.01 | 0.01 | 2.35 | 1.47 | 1.66 | 2.16 |
| >= 24 months < 36 months | 2.38 | 2.13 | 1.03 | – | 0.01 | 2.14 | 1.46 | 1.65 | 1.99 |
| >= 36 months < 48 months | 2.07 | 1.82 | 0.78 | – | – | 1.87 | 1.33 | 1.41 | 1.95 |
| >= 48 months < 60 months | 2.06 | 1.81 | 0.80 | – | – | 1.86 | 1.36 | 1.44 | 1.91 |
| 60 months | 2.08 | 1.83 | 0.81 | – | – | 1.86 | 1.41 | 1.48 | 1.88 |
| Tenure | USD | GBP | EUR | AUD | CAD | JPY | |
| Below 5 million | 5 million & above | ||||||
| 1 year only | 2.65 | 2.65 | 1.35 | 0.05 | 1.65 | 1.75 | 0.05 |
| Above 2 year but less than 2 years | 2.65 | 2.65 | 1.35 | 0.05 | 1.65 | 1.75 | 0.05 |
| 2 years and above but less than 3 years | 2.50 | 2.50 | 1.40 | 0.05 | 1.65 | 1.85 | 0.05 |
| 3 years to less than 4 years | 2.50 | 2.50 | 1.40 | 0.05 | 1.65 | 2.00 | 0.05 |
| 4 years to less than 5 years | 2.50 | 2.50 | 1.40 | 0.05 | 1.65 | 2.05 | 0.05 |
| 5 years only | 2.50 | 2.50 | 1.40 | 0.05 | 1.65 | 2.10 | 0.05 |
