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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.
RBI permits the following currencies for FCNR accounts*
We recommend that you check with your bank if you can book a new FCNR deposit in your preferred choice of currency.
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 -
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.
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*The information is updated as of November 2020.