The NRI, in order to invest in India, has to have any of the 3 types of accounts:
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FCNR (B) – Foreign Currency Non-Resident (Bank) Account
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NRE Account – Non-Resident External Account
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NRO – Non-Resident Ordinary Account
If an NRI is willing to opt for the FCNR (B) account, here is the detailed information as to how the Foreign Currency Non-Resident Account works.
What is an FCNR (B) Account?
In simple words, a Foreign Currency Non-Resident Bank Account is a kind of Fixed Deposit Account for NRIs. An FCNR account is offered only to those NRIs who have either an NRE or an NRO account and is considered a lucrative option as it allures foreign remittance. One of the attractive features of an FCNR account is that the money deposited can be in permissible foreign currencies and the interest rate completely depends on the currency type deposited.
Permissible Foreign Currencies
Following are the foreign currencies in which a Non-Resident Indian can deposit their money in the Foreign Currency Non-resident Bank Account.
| Abbreviation |
Full Form |
| AUD |
Australian Dollar |
| CAD |
Canadian Dollar |
| CHF |
Swiss Franc |
| EUR |
Euro |
| GBP |
Great Britain Pound |
| HKD |
Hong Kong Dollar |
| JPY |
Japanese Yen |
| SGD |
Singapore Dollar |
| USD |
United States Dollar |
Features of FCNR (B) Account
The following are the salient features of a Foreign Currency Non-Resident (FCNR) Bank Account:
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Foreign Currency Non-Resident Account is a currency-dominated account.
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It is not a savings account like NRE or NRO account.
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FCNR Account is a term deposit also known as a fixed deposit account.
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It comes with a minimum tenure of 1 year and maximum tenure of 5 years.
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Tax is exempted on the interest income of your FCNR Account.
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Interest earned and the principal amount is fully repatriable.
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An overdraft facility is available.
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FCNR Account can be opened:
Eligibility Criteria for FCNR Account
If an individual has to open an FCNR (B) account, the following is the eligibility criteria for account opening:
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The individual has to be a Non-Resident Indian (NRI) or Person of Indian Origin (PIO) or Overseas Citizen of India (OCI).
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A joint account can be held with other NRIs.
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The individual must have held an Indian passport issued by the Government of India at any point.
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Needs to be a citizen as per the Citizenship Act, 1955.
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Minimum deposits to be made for at least 1 year to earn interest.
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Interest is paid on 360 days to 1-year basis.
Documents Required to Open FCNR Account
After passing the eligibility criteria option, the following documents are necessary if a person wants to open an FCNR (Foreign Currency Non-Resident) Bank Account:
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Valid passport
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Passport size photographs
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Address proof (of the country the individual is currently residing in)
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Indian PAN Card or Form 60
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NRI Status proof
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Income proof
Premature Withdrawals Under FCNR (B) Account
For premature withdrawals:
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Charges are applicable to close the FCNR account pre-maturely depending upon the bank
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Interest will be paid as on the date of deposit if the amount is withdrawn prematurely
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Interest is not paid if withdrawals are made before the completion of 1 year
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