FCNR(B) Deposit for NRIs in Canada: What It Offers Beyond Your TFSA and Savings Account

For NRIs living in Canada, savings may be spread across everyday bank accounts, Guaranteed Investment Certificates, registered accounts such as a Tax-Free Savings Account, and investments held in India.

An FCNR(B) Deposit can serve a different purpose within this mix. It allows eligible NRIs and Persons of Indian Origin (PIO – It includes OCI card holders as well) to hold a Fixed Deposit in a foreign currency with an Indian bank, without converting the Deposit amount into Indian Rupees during the chosen tenure.

For a Canada-based NRI, this could mean opening an FCNR(B) Deposit in Canadian Dollars. The Deposit amount and interest remain in CAD during the tenure, subject to the Bank’s terms. This may be relevant when part of the savings is intended to stay in foreign currency but be held with an Indian bank.

FCNR(B) is not a substitute for every Canadian savings option. It is best understood as a foreign-currency Fixed Deposit that can complement other savings arrangements, depending on the currency needed, tenure, liquidity requirement and tax residency.

FCNR(B) Deposit is maintained in the chosen foreign currency throughout its tenure. At HDFC Bank, eligible customers can open FCNR Deposits in CAD, USD, GBP, EUR, JPY, AUD and SGD.

For an NRI earning or holding Canadian Dollars, an FCNR(B) Deposit in CAD avoids conversion of the Deposit into INR when the Deposit is opened. This can be relevant where the funds may be required in CAD in the future. 

Key features include:

• Deposit maintained in an eligible foreign currency 

• Fixed tenure from one year to five years

• Interest earned in the Deposit currency 

• Principal and interest fully repatriable, subject to applicable regulations

• Interest exempt from Indian income tax, subject to applicable regulations and eligibility conditions 

• Minimum CAD Deposit amount of CAD 1,000 at HDFC Bank

An FCNR(B) Deposit does not remove every currency consideration. If the funds are eventually used in INR, USD or another currency, exchange-rate movements and conversion charges may still affect the final value. 

A TFSA and an FCNR(B) Deposit need not compete with each other. They can serve different purposes.

For example, an eligible Canadian tax resident may use a TFSA for Canadian tax-sheltered savings or investments, while using an FCNR(B) Deposit for foreign-currency funds that they want to retain with an Indian bank for a fixed tenure.

The decision should be based on the currency needed at maturity, tax residency, available TFSA room, liquidity needs and the purpose of the funds. It should not be based only on the interest rate displayed for a particular currency.

Eligible NRIs and PIOs can consider the following process:

1. Confirm your NRI or PIO eligibility and complete KYC requirements.
2. Select the Deposit currency, such as CAD, and choose a suitable tenure.
3. Check HDFC Bank’s latest FCNR Deposit interest rate for the selected currency and tenure. 
4. Fund the Deposit through a SWIFT inward remittance from Canada or another eligible funding route.
5. Provide your Customer ID and FCNR Deposit booking instructions with the remittance, where applicable.
6. Review the premature-withdrawal, lock-in and maturity instructions before booking.

Existing HDFC Bank customers may also be able to book an FCNR Deposit through NetBanking, subject to applicable product terms and access rights. 

RBI has temporarily relaxed the interest-rate ceiling for fresh FCNR(B) Deposits, including eligible renewals, with tenures from three years up to five years. This relaxation is effective until 30 September 2026.

The RBI measure gives banks greater flexibility to increase the interest rate of eligible FCNR(B) Deposits. It does not guarantee a higher rate for every customer. The rate offered depends on the Deposit currency, tenure and HDFC Bank’s prevailing rate card when clear funds are received.

As per HDFC Bank’s interest rate effective 22 June 2026, CAD FCNR Deposits for tenures from three years to five years offer 4.50% p.a. Rates can change, so customers should review the live rate card before transferring funds.

For HDFC Bank FCNR Deposits booked for three to five years between 10 June 2026 and 30 September 2026, a one-year lock-in period applies. 

Before opening an FCNR(B) Deposit from Canada, review:

• The currency in which you expect to need the funds at maturity

• The current rate available for the selected currency and tenure

• Whether the funds can remain invested for at least one year 

• SWIFT, intermediary-bank and currency-conversion charges

• Tax reporting requirements in Canada

• The total value of foreign assets for Form T1135 assessment

• Premature-withdrawal rules and maturity instructions 

At HDFC Bank, no interest is paid if an FCNR Deposit is withdrawn before completing one year. For premature withdrawals after one year, no premature-closure penalty is levied, but interest is recalculated based on the rate applicable on the booking date for the completed period of the Deposit.

For NRIs in Canada, an FCNR(B) Deposit can add a foreign-currency Fixed Deposit option to a savings toolkit that may already include Canadian bank accounts, GICs and TFSAs.

It may be relevant for funds that need to remain in CAD or another eligible foreign currency while being held with an Indian bank for a fixed tenure. Before booking, review the Deposit currency, tenure, liquidity needs, Canadian tax obligations, Form T1135 position and HDFC Bank’s latest FCNR Deposit terms and rate card.

Disclaimer: Terms and conditions apply. 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. Rates and terms are subject to change. Please refer to HDFC Bank’s official FCNR(B) rate card for the most current information. Please consult a qualified Canadian tax professional and review HDFC Bank’s latest FCNR Deposit terms before booking.