Nri Deposits
The blog explains that an FCNR (Foreign Currency Non-Resident) Account allows NRIs to maintain fixed deposits in foreign currencies, offering tax-free interest, easy repatriation of funds, and protection against exchange rate fluctuations.
FCNR stands for Foreign Currency Non-Resident Account. If you are an NRI and wish to maintain a Fixed Deposit Account in India, you can opt for an FCNR Account to save money earned overseas in Foreign Currency. Most banks book FCNR deposits in the following currencies: US Dollars, Pounds Sterling, Euro, Japanese Yen, Australian Dollars, and Canadian Dollars.
FCNR Accounts are an excellent investment option for NRIs if you wish to retain your money in foreign currency and earn good returns simultaneously. Since your money will be held in a foreign denomination, you can save the risk of exchange rate fluctuations. This also ensures that you earn higher, risk-free returns. Also, if you are still determining where to save or invest your hard-earned money, you can opt for an FCNR Account.
Here are some features of an FCNR Account that make it an extremely feasible option to invest and maintain funds in India:
FCNR (Foreign Currency Non-Resident) Accounts are designed for fixed-term deposits rather than regular savings. This means you commit your funds for a fixed period (usually 1 year to 5 years). Although you can withdraw prematurely, interest is typically paid only after completing a minimum of one year, and early withdrawal might incur penalties.
You can open an FCNR Account by transferring money from your existing Non-Resident External (NRE) Account. This transfer ensures your deposits are converted into foreign currency, allowing you to earn interest in that currency and manage your funds more effectively as an NRI.
The interest you earn on your deposits on FCNR Accounts is tax-free. This tax-free status means investing independently and growing your funds while residing abroad.
The Principal amount of your FCNR deposit and the interest you earn thereon is fully repatriable. That means you can transfer these funds back to your country of residence without restrictions. This full repatriation facility provides flexibility and convenience for managing your investments across borders.
You can also avail an overdraft facility over your FCNR Term Deposit Account. This means you can borrow money up to a certain limit based on the value of your FCNR deposit. It provides liquidity while your funds are still invested in the term deposit.
Therefore, if you want to save your money in foreign denominations, FCNR Accounts are an excellent choice.
Looking to open your FCNR Account? Click here to get started! You can read more on how to open an NRI Account here.
* The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.