What is Foreign Currency Non-resident Bank Deposits : FCNR-B Accounts ?
NRIs can avoid Risk of Foreign Exchange fluctuations by keeping their overseas money in Foreign Currency Non Resident Bank Deposits (FCNR-B) and you can convert back money to the foreign currency. The account should be opened by the non-resident account holder. FCNR-B enable NRIs to earn good returns on their foreign currency earnings.
Key Features of FCNR-B (Foreign Currency Non Resident Bank Deposits) accounts
- FCNR(B) accounts are maintained in Foreign currency only
- No need to worry forex rate fluctuation risk as the accounts are always maintained in the foreign currency
- Source of funds to FCNR-B accounts should be from abroad(can be from NRE or FCNR accounts)
- USD, GBP, EUR, JPY, CAD and AUD are allowed to maintained in this account
- Remittances in other Currencies will be converted into any of the currencies named above at the option of the depositor
- Interest will be made in the same foreign currency
- Interest income earned on the money in a FCNR account is non-taxable in India
- No gift tax on Gifts made out of balances
- No wealth tax on balances held
- FCNR-B is maintained only in term deposit
- Period of deposits range from 1 year to maximum 5 years.
FCNR-B deposits can be closed before the due date(penalty apply)
NRIs can appoint Power of Attorney Holder to residents in India for operating their FCNR(B) accounts in India
- You can have joint account with other NRIs ( Resident Indians cannot be joint account holders in NRE accounts)
NOTE: Acceptance of deposits under 2 earlier schemes namely Foreign currency Non resident Accounts (FCNR) and Foreign currency (Ordinary Non repatriable) (FCONR) deposit scheme were discontinued in w.e.f. 15/08/94. Deposits already accepted are however, allowed to continue till their maturity and thereafter no renewals would be permitted.