Q&A

How does FCNR deposit work?

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How does FCNR deposit work?

In FCNR accounts, both principal and interest are freely repatriable. In other words, the interest earned and the deposit amount on the deposits are repatriable to the depositor’s country of residence sans restrictions. FCNR accounts are offered for not less than 1 year and not more than 3 years.

What are foreign currency non resident deposits?

FCNR stands for Foreign Currency Non Resident Account (Banks)

  • This is a kind of fixed deposit account opened for depositing income earned overseas.
  • The account is held in foreign currency.
  • Account available in a choice of 7 currencies: USD, GBP,JPY, CAD, AUD, SGD, and HKD.

How do I transfer money from USD to Fcnr?

How can you transfer your funds to FCNR account?

  1. Directly from your overseas bank account through a wire transfer or personal cheques.
  2. From another NRE or FCNR account.
  3. Proceeds from Travelers Cheques when you are visiting India. You would need a currency declaration form if the amount exceeds USD 5,000 or equivalent.
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What is Fcnr swap?

What is the FCNR swap deal? The swap deal was introduced as a means to encourage banks to attract more US dollars into India. The RBI has promised banks a forward rate at a premium of 3.5\% per annum for all fresh 3-year FCNR deposits raised between now and November 30, 2013.

Which is better FCNR or NRE?

Mashruwala adds, “If you are certain that you will repatriate the maturity proceeds, then it is best to invest in the FCNR as you protect yourself against currency risk. Conversely, if you are certain that your investment will remain in India, NRE would be a better choice.”

What is the maximum tenure for FCNR deposit?

5 years
It is controlled by the RBI and is the same across all banks. The FCNR is not a savings account but is a term deposit. The term should have a minimum maturity of 1 year and a maximum maturity period of 5 years.

Can NRE account be maintained in foreign currency?

A Non-Resident External (NRE) account is a savings account in which you can deposit foreign currency earnings and freely repatriate monies held in the account back to your country of residence. NRE accounts are INR denominated accounts which means all the funds you deposit are maintained in Indian rupee.

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What is the difference between NRE and FCNR account?

NRE account is for depositing income earned outside India in India. NRO Account is for depositing income that one earns in India. FCNR account is for depositing earnings in foreign currency in an Indian account. The deposits and the interest earned on them are fully repatriable.

How many currencies Fcnr premium deposit is accepted?

1.2 To begin with, the FCNR(B) scheme was applicable to deposits accepted in four currencies, viz., Pound Sterling, US Dollar, Deutsche Mark and Japanese Yen.

Are FCNR deposits safe?

The FCNR deposits are one of the safest and most secure investment options in India for NRIs. These deposits are also free from exchange rate risks.

Who can open FCNR deposit?

You can open an FCNR Account by transferring money from your existing Non-Resident External (NRE) Account. The interest you earn on your deposits on FCNR Accounts is tax-free, e., it is not taxable in India.

Can Fcnr be broken?

Balances in FCNR can be freely repatriated outside India. However, there is one catch that NRIs need to be aware of. Since RBI’s swap deal is available to banks on FCNR deposits over 3 years, banks are restricting partial or premature withdrawal on FCNR deposits opened for a term of 3 years and above.

What is a foreign currency non resident account?

Foreign Currency Non Resident (FCNR) Account. An account that can be opened with an Indian bank by a Non Resident Indian or a Person of Indian Origin in foreign currency is FCNR (B) account. The letter B in FCNR (B) stands for the word ‘Bank’. It is an account that allows the NRI to keep his deposits in foreign currency.

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What is a ‘foreign currency swap’?

What is a ‘Foreign Currency Swap’. A foreign currency swap is an agreement to exchange currency between two foreign parties. The agreement consists of swapping principal and interest payments on a loan made in one currency for principal and interest payments of a loan of equal value in another currency.

Is there any tax on foreign currency deposits in India?

However, loans in foreign currency against FCNR (B) deposits in India can be availed outside India through our correspondent Banks. No Wealth Tax & Income Tax is applicable on these deposits. Gifts made to close resident relatives are free from Gift Tax.

Can NRI take loan against FCNR(B) deposits in India?

Loans/overdrafts in rupees can be availed by NRI depositors or 3rd parties against the security of these deposits. However, loans in foreign currency against FCNR (B) deposits in India can be availed outside India through our correspondent Banks. No Wealth Tax & Income Tax is applicable on these deposits.