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If you’re a non-resident Indian (NRI), person of Indian origin (PIO), or an overseas citizen of India (OCI), you may be wondering how to manage your foreign income. A fixed term account with secure and predictable returns could be the answer.
Find out more about NRI services.
A Foreign Currency Non-Resident Bank, or FCNR (B) account, means your deposit is held in a foreign denomination. This secures it against currency fluctuations. Like a Non-Resident External (NRE) bank account, the funds and the interest earned are tax-free in India.
It works like an FD (fixed deposit) account available to resident Indians, except that with an FCNR account, you deposit only foreign currency. The currencies you're able to deposit include US dollars (USD), pound sterling (GBP), Japanese yen (JPY), Euros (EUR), Canadian dollars (CAD), Australian dollars (AUD), Danish krone (DKK), Swiss francs (CHF), and Swedish krona (SEK).
As a foreign currency term deposit account, it comes with a lock-in period. This means you need to keep your money in the FCNR account for 1-2 years (EUR, JPY, CAD, AUD) or 1-3 years (USD, GBP, DKK, CHF, SEK).
With an FCNR account, you can:
With a non-resident external (NRE) account, you can deposit any foreign income into an account in India. The foreign currency is converted into rupees at the current exchange rate and can't be held in foreign currency, as with an FCNR account.
A non-resident ordinary (NRO) account is a current/savings bank account held in rupees in India. This is best for NRIs still receiving earnings in India, like a pension or rental income. You can still deposit foreign currency into the account, which will be converted to rupees at the current exchange rate.
Only NRIs/PIOs/OCIs can open an FCNR (B) account. Your NRI status should be as per Foreign Exchange Management Act (FEMA) rules.
To place an FCNR deposit, you need to have an NRE account with HSBC India. Once an NRE account is in place, FCNR can be booked at any branch in India or overseas.
You may be asked to provide the following documents:
Explore: How to open an NRI account online
You can open an FCNR account with:
Learn more about an FCNR deposit account.
If you're opening an FCNR account with HSBC in India, you need to maintain a minimum deposit. This varies according to the currency.
| Currency type | Minimum deposit amount |
|---|---|
| Australian dollars | AUD1,500 |
| British pounds | GBP500 |
| Canadian dollars | CAD1,500 |
| Danish krone | DKK1,000 |
| Euros | EUR750 |
| Japanese yen | JPY125,000 |
| Swedish krona | SEK1,000 |
| Swiss francs | CHF1,000 |
| US dollars | USD1,000 |
| Currency type | Australian dollars | Australian dollars |
|---|---|---|
| Minimum deposit amount | AUD1,500 | AUD1,500 |
| Currency type | British pounds | British pounds |
| Minimum deposit amount | GBP500 | GBP500 |
| Currency type | Canadian dollars | Canadian dollars |
| Minimum deposit amount | CAD1,500 | CAD1,500 |
| Currency type | Danish krone | Danish krone |
| Minimum deposit amount | DKK1,000 | DKK1,000 |
| Currency type | Euros | Euros |
| Minimum deposit amount | EUR750 | EUR750 |
| Currency type | Japanese yen | Japanese yen |
| Minimum deposit amount | JPY125,000 | JPY125,000 |
| Currency type | Swedish krona | Swedish krona |
| Minimum deposit amount | SEK1,000 | SEK1,000 |
| Currency type | Swiss francs | Swiss francs |
| Minimum deposit amount | CHF1,000 | CHF1,000 |
| Currency type | US dollars | US dollars |
| Minimum deposit amount | USD1,000 | USD1,000 |
Yes, premature withdrawals are allowed from your FCNR FD. However, no interest is payable if the withdrawal is made before the completion of one year. If premature withdrawal is made after one year, it will be subject to penalties based on interest rate movements and swap cost movements.
No, you cannot use your NRO account for this, according to the applicable regulations in India. However, you can use your NRE account to transfer funds to place an FCNR deposit.
If you're a non-resident Indian, an FCNR account allows you to invest in your home country. You can benefit by parking your overseas earnings in foreign currency without being exposed to the risk of exchange rate fluctuations. And remember, the principal amount and interest are tax-free.
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