How to open FCNR account in India?
The FCNR (Foreign Currency Non Resident) account can be opened by PIO (Person of Indian Origin), OCI (Overseas citizen of India) and NRI (Non Resident Indians). Unlike NRE or NRO account, an FCNR is available only as a fixed term deposit. One can open an FCNR account for 1 year to 5 years period. Nil Interest will be paid if the deposit is closed within a year of opening.
is FCNR good option?
With the Indian rupee continuing to remain unpredictable, FCNR account may be a good option for NRIs and PIOs – as the risk of volatile in currency conversion is eliminated. NRI can earn more interest in FCNR account because usually the interest on the FCNR deposit is more than the country in which the PIO is residing.
Permitted currencies to open FCNR deposit in India
Most of bank will accept FCNR deposits in any permitted currency. The minimum amount required to open a FCNR varies from currency to currency and also varies between banks. Permitted currencies are foreign currencies which are popular and freely convertible like USD, GBP, EUR, JPY, CAD, AUD, SGD, HKD, CHF etc. one need to check with the account opening bank for details.
What are the tax implications on FCNR account?
The interest rates vary between banks, terms and from currency to currency. The interest earned from FCNR term deposits are exempt from tax in India. Similarly, there is no tax on maturity of FCNR deposits. However, NRIs may be subjected to tax on the interest in the country where they are a resident.
How to open FCNR account?
One can open an FCNR deposit from overseas or in India. Three ways in which NRI can open an FCNR account.
- He/She can transfer funds from their overseas bank account directly to open an FCNR account
- He/She can transfer funds from an existing NRE account; or
- She/He can open an FCNR account using foreign currencies or travelers cheques when they visit India.
Following documents are required by the bank to open FCNR deposit:
- Self attested copy of your passport with valid work permit/employment visa.
- Foreign residential address proof.
- Passport size photographs.
- Initial payment.
Above are the common documents needed to open an FCNR, but some banks will ask for other additional documents such as overseas bank statement, income related documents etc. Also required document may also vary between countries. One needs to check with the account opening bank for details.
If you have any doubts regarding FCNR account, kindly leave your comments. We would try our level best to address those.