FCNR Deposit (Foreign Currency Non Resident) account is a fixed deposit account offered by banks in India to non resident Indians (NRIs) and is operated in foreign currency. These are quite popular investments for NRIs because of the higher interest rate offered by banks in India as compared to their country of residence. For e.g. As of today State Bank of India offers 1.53% interest on its FCNR (US Dollar) deposit for 5 year term; in comparison Wells Fargo offers 0.02% for all tenures of CD Deposit (Fixed deposit).
The second benefit is the principal and interest earned is fully repatriable, which means NRIs can transfer their money back without much formalities.
The third benefit is the investor has NO currency exchange risk as you deposit in foreign currency, the interest earned is in foreign currency and when you withdraw you get back the amount in currency in which the deposit was made.
The fourth benefit is the interest earned on FCNR deposits are tax free in India. However it may be taxable in their country of residence.
Most banks accept deposit in USD (US Dollar), GBP (Pound), EUR (Euro), AUD (Australian Dollar), CAD (Canada Dollar), CHF (Swiss Franc), SGD (Singapore Dollar), JPY (Japan Yen). A few banks also accept deposit in HKD (Hong Kong Dollar), NZD (New Zealand Dollar) and SEK (Swedish Krona).
This post compares the interest rate offered on US Dollar FCNR Deposits.
US Dollar FCNR Deposit Rates
The table below compares the interest rates offered on US Dollar FCNR deposits across various tenures. The highest FCNR rates have been highlighted.
As can be seen Ratnakar Bank, Yes Bank, Tamilnad Mercantile Bank, Karur Vysya Bank & IDFC First Bank pays highest interest on FCNR deposits in US Dollars.
| Bank | 1 year | 2 Years | 3 Years | 4 Years | 5 Years |
|---|---|---|---|---|---|
| Axis Bank | 0.50% | 0.30% | 0.45% | 0.55% | 0.60% |
| Bandhan Bank | 0.98% | 1.05% | 1.27% | 1.53% | 1.78% |
| Bank of Baroda | 0.58% | 0.65% | 0.87% | 1.13% | 1.38% |
| Bank of India | 0.98% | 1.05% | 1.27% | 1.53% | 1.78% |
| Canara Bank | 0.98% | 1.05% | 1.27% | 1.53% | 1.78% |
| City Union Bank | 0.73% | 0.80% | 1.02% | 1.28% | 1.53% |
| DCB Bank | 1.25% | 1.25% | 1.00% | 1.00% | 1.00% |
| Dhanalakshmi Bank | 1.22% | 0.26% | 0.44% | 0.65% | 0.87% |
| HDFC Bank | 0.01% | 0.01% | 0.01% | 0.01% | 0.20% |
| ICICI Bank | 0.23% | 0.30% | 0.52% | 0.78% | 1.03% |
| IDBI Bank | 0.98% | 1.05% | 1.27% | 1.53% | 1.78% |
| IDFC Bank | 0.75% | 1.25% | 1.75% | 2.70% | 1.00% |
| Induslnd Bank | 1.30% | 1.30% | 1.35% | 1.50% | 1.60% |
| Karnataka Bank | 0.83% | 0.90% | 1.32% | 1.58% | 1.83% |
| Karur Vysya Bank | 1.49% | 1.41% | 1.92% | 2.03% | 2.28% |
| Kotak Mahindra Bank | 0.10% | 0.10% | 0.01% | 0.01% | 0.01% |
| Punjab National Bank | 0.98% | 1.05% | 1.27% | 1.53% | 1.78% |
| Ratnakar Bank | 1.95% | 2.00% | 2.50% | 2.60% | 2.70% |
| South Indian Bank | 0.88% | 0.90% | 1.12% | 1.38% | 1.63% |
| State Bank of India | 0.73% | 0.80% | 1.02% | 1.28% | 1.53% |
| Tamilnad Mercantile Bank | 1.23% | 1.30% | 1.47% | 1.93% | 2.18% |
| Yes Bank | 1.40% | 1.50% | 1.70% | 1.75% | 1.80% |
| Wells Fargo (US benchmark) | 0.02% | 0.02% | 0.02% | 0.02% | 0.02% |
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FCNR Account Rules
- The minimum deposit tenure for FCNR FD is 1 year and maximum tenure is 5 years.
- The interest is compounded half-yearly.
- The minimum amount for FCNR deposit varies by bank but is generally USD 1,000
- In most cases there is NO penalty for pre mature closure of FCNR deposit account. However in case of premature closure before completion of 1 year, no interest would be paid.
FCNR Deposit Account USD FAQs
✅ What is FCNR deposit?
FCNR Deposit (Foreign Currency Non Resident) account is a fixed deposit account offered by banks in India to non resident Indians (NRIs) and is operated in foreign currency.
✅ Can I get loan against FCNR deposit?
Most banks offer loan up to 85% of FCNR deposit. This can be a good option for short term emergency loans.
✅ Is FCNR deposit a good investment for NRIs?
FCNR is a very good investment option for NRIs because of the following reasons:
– The interest offered is better than they can get in their home country
– Principal and interest earned is fully repatriable
– There is No currency risk
– The interest earned is tax free
– You can borrow against FCNR deposit in case of emergency
✅ Who can open FCNR deposit Account?
All NRI/ PIO/ OCIs adults looking to retain their money in foreign currency for good returns can open FCNR account.
✅ What are documents required for opening FCNR Account?
You need your Passport & relevant address proof along with the filled up application form to open an FCNR account. You can visit ICICI Bank page to know more.
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