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FCNR(B) Account:

Key Features:
  • High returns on foreign currency earnings 
  • Interest earned is fully tax free
  • Funds are freely repatriable
  • Can be opened in any permitted currency
FCNR Account and its term
Foreign Currency Non Resident (Bank) Accounts are term deposit accounts in foreign currency in India. Term for FCNR can be from 1 to 5 years. Thus FCNR accounts are not savings accounts but fixed deposit accounts.  These can be withdrawn/renewed after the said fixed term of the deposit.

Funds that can be used for FCNR Accounts

All deposits & withdrawls as permitted in case of NRE Acounts are also permitted for FCNR accounts. So FCNR account can be opened by
  • Transferring fund from your overseas account
  • Transfer from an existing NRE account
  • using foreign currency notes or travellers cheque when you come to India

FCNR Account in Joint Name

FCNR account can be opened by NRIs in their individual name or in joint name with other NRIs and/or with a resident indian who is a close relative. The resident close relative can operate the account as a Power of Attorney holder.

Funds are freely repatriable
Principal as well as interest earned on FCNR accounts are freely repariable

Interest earned is tax free

Interest earned on FCNR Accounts as well as the funds in FCNR Account are exempt from Income Tax.

FCNR Funds Can be used as security for getting Loans

Loans can be granted against the security of FCNR deposits. Loan can be availed by the depositor or even by third parties. Loans may be Rupee Loans or Foreign Currency Loans. Though RBI has not kept any ceiling on the amount of loan, but presently banks are granting loans upto Rs. 100 lacs(10 million).

Other Points

  • When the NRI  holder of FCNR Account becomes a resident, the deposit is allowed to be continued till its term/maturity at the original rate of interest.
  • Nomination facility is also available for FCNR Accounts.

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