What is FCNR Account? Know Features & Documents for FCNR Account at DBS Treasures

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Key Takeaways: What are the benefits of an FCNR account for an NRI? What are its features? This article explores an important investment avenue for all Non-Resident Indians.

FCNR account stands for Foreign Currency Non-Resident Bank (B) account. An FCNR account allows NRIs to invest foreign currency in term deposits in India and earn tax-free interest.

This is great for NRIs who live in countries where interest rates are low such as US, UK, Canada, Australia, etc. They can benefit from higher interest rates in India while holding their deposits in a foreign currency, thus protecting them against exchange rate fluctuations.

Features of FCNR accounts

Foreign currency denomination: It is a foreign currency-denominated account. The money will continue to be maintained in the NRI's preferred choice of currency amongst those approved by RBI.
Term Deposit Account: FCNR is not a Savings but a Term Deposit Account. It has a minimum tenure of one year and a maximum tenure of five years.
Non-taxable: Interest income on these accounts is not subject to taxation as per Indian laws.
Free repatriation: You can freely repatriate both the interest and the principal income abroad.
Eligibility for loans: FCNR deposits make you eligible for loans in INR. These loans can be repaid from the maturity proceeds.
Account-holders: You can open an FCNR account with two or more joint NRI account holders.

Open an NRE Fixed Deposit

Currencies permitted under the FCNR scheme^[1]

RBI permits the following currencies for FCNR accounts*

USD
Pound Sterling
Euro
Japanese Yen
Canadian Dollar
Australian Dollar
Swiss Franc
Singapore Dollar
Danish Krone
Hong Kong Dollar and others

We recommend that you check with your bank if you can book a new FCNR deposit in your preferred choice of currency.

Documents required

Apart from the basic eligibility of being an NRI or Person of Indian Origin (PIO), you need to furnish the following documents to open an FCNR account -

A valid passport and a recent passport size colour photograph
Address proof in India (optional)
Address proof in your country of residence
A copy of your Indian PAN card or Form 60
Proof of NRI status – Employment / Residence Visa or Work/ Residence permit
Valid PIO/OCI card or any other proof of PIO status and signed in and filled in PIO declaration for PIOs
Additionally, for NRI seafarers - Current work contract and copy of CDC along with the disembarkation stamp on the last page & FEMA declaration

Final Note: An FCNR account allows you to deposit overseas currency, which removes any risk of foreign exchange rate fluctuations. You can repatriate funds to your current country of residence once the deposit matures. You can even take a loan against your FCNR account balance. As such, an FCNR account is a safe investment option.

Are you looking to open an FCNR account remotely and quickly? Choose DBS Treasures. Apply Now!

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*The information is updated as of November 2020.