Foreign Currency Non-Resident (FCNR) Account Related

What are the key features of a Foreign Currency Non-Resident (FCNR) Account in India, and how does it function as a term deposit account for NRIs?

A Foreign Currency Non-Resident or FCNR Account is a term deposit account in India for an NRI. It can be maintained in foreign currencies such as USD, GBP, EUR, etc. for a fixed tenure ranging from 1 to 5 years. The interest is earned in foreign currency and the income is not taxable in India. Both the principal amount as well as the interest earned on the deposits are freely and completely repatriable.

Can I prematurely withdraw funds from my FCNR account?

Premature withdrawal is allowed, but it may be subject to penalties and loss of interest, depending on the bank's terms and conditions.

No interest is payable, if the deposit is withdrawn before one year If the deposit is withdrawn after the completion of one year, interest will be paid at the rate available on the date of deposit for the period the deposit has remained with the Bank. e.g. if the deposit is made for 3 years and is prematurely withdrawn after 2 years, the rate applicable for the 2 to 3 years tenure at the time of making the deposit shall be applied without levying any penalty.

Can I transfer funds between FCNR accounts and other NRI accounts?

Funds can be transferred between different NRI accounts (like NRE, NRO, and FCNR) as long as the transactions comply with Reserve Bank of India (RBI) regulations.

However, penalties will apply for premature withdrawals. Also, swapping charges are fixed by the bank in which the FNCR account is held.

Can I hold multiple FCNR accounts in different currencies?

Yes, NRIs can hold multiple FCNR accounts in different foreign currencies.