Foreign Currency Non Resident (FCNR)

FCNR accounts can be maintained only in the form of 'term deposits', i.e. a deposit kept for fixed periods ranging from 1 year to 3 years. The Banks have been permitted to offer interest on such deposits at rates not in excess of LIBOR + 50 basis points in respect of deposits of maturity of one year and above. (LIBOR rate prevailing on the last working day of the previous week for the relevant maturity and currency.) Subject to this guideline, banks can offer either fixed or floating rate of interest on such deposits. [The rates of interest are subject to change in accordance with the directives issued by Reserve Bank (Department of Banking Operations and Development) from time to time.] Debits for local payments in rupees are allowed freely. Authorised dealers maintaining these accounts would allow repatriation abroad of these funds.

FCNR deposits cannot be held jointly with residents. You can designate a nominee of your choice to your FCNR deposit.

On your return to India, banks would treat the deposits held in FCNR accounts as resident deposits but would continue to pay interest at the contracted rate till maturity of the deposit.

Premature withdrawal of the FCNR term deposit is allowed. However, this is subject to the levy of a penalty. Interest in such cases is paid at one per cent below the interest rate payable for the period for which the deposit has actually run. Interest on deposits is, however, payable only if they are kept for a minimum period of six months. Incidentally, these matters are governed by the instructions/directives issued by Reserve Bank (Department of Banking Operations and Development) from time to time.

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