Indian banks like the State Bank of India (SBI), RBL Bank, and Federal Bank, offer FD accounts in six major foreign currencies tax-free. The US Dollar, British Pound (GBP), Canadian Dollar (CAD), Australian Dollar (AUD), and Japanese Yen (JPY) are all accepted. Fixed deposit rates in India are outstanding on a global scale. NRIs will undoubtedly want to take advantage of this opportunity.
State Bank of India (SBI)
For foreign currency deposits in the US dollar, UK pound, Canadian dollar, Australian dollar, and Japanese yen, SBI offers Foreign Currency Non-Resident Accounts (FCNRs).
Federal Bank
Federal Bank offers FCNR deposits in 10 different foreign currencies, with interest rates for the $ FCNR deposits ranging from 4.25 to 5.05 percent.
The Bank of Baroda (BoB)
The Bank of Baroda (BoB) increased interest rates on FCNR fixed deposits by 135 basis points (1.35%) in October 2022 across several currencies.
ICICI
The minimum amount for FCNR at ICICI Bank is $1000 and 1000 GBP. The minimum amount is 2000 SGD, CAD, and AUD for Singapore, Canadian, and Australian currencies, respectively. It is 10,000 HKD for Hong Kong Dollars.
Method for NRIs to Open FD FCNR Accounts Online
A non-resident Indian (NRI) may create a non-resident external (NRE) or non-resident ordinary (NRO) savings account through any Indian bank or overseas branch.
If there are no Indian bank branches in the country where the NRI resides, they can send a completed account opening form that they downloaded online along with know-your-customer (KYC) documents like their passport, visa, Overseas Citizen of India (OCI) or People of Indian Origin (PIO) card information, as well as documentation of their place of residence.
Before the banks accept the documents for opening NRE/NRO accounts, the Indian High Commission, consulate, or notary public will verify them. The depositors’ full names, addresses, and sample signatures must be submitted to the bank at the time of the deposit into the FCNR account. For FCNR deposits, the payments can be done via telegraphic or SWIFT transfers. Foreign nationals cannot open an FCNR account; only NRIs and PIOs can.
Important Facts
Tax-free FCNR and 100% repatriation of maturity profits
Three different types of bank accounts—NRE, NRO, and FCNR—can be opened in India by NRIs.
The FCNR allows non-resident Indians to participate in foreign currency deposits in India, according to Aarti Raote, Partner, Deloitte India. There wouldn’t be any FX losses because the deposits would be in foreign currency.
“The interest earned from such deposits is not liable to tax in India. The amounts post maturity are repatriable” Raote stated.
NRIs may open FCNR accounts in foreign currencies or accounts denominated in rupees (NRE and NRO):
According to Rathish of Federal Bank, there are no legal limitations on an NRE or NRO holder’s ability to open an FD or recurring deposit account (RD).
Savings account interest rates are lower than those on FDs and RDs. In the case of NRE, the minimum term of FD/RD is one year, whereas RD accounts can be opened for a limited period of time.
For FCNR term deposits, NRIs are not required to go to India, nor is opening an FCNR account contingent upon having an NRE or NRO account.
Using an FCNR Account to Obtain Loans Possible
Owners of FCNR accounts are also eligible for loans, but the maximum sanction amount varies depending on the FCNR’s banking and currency deposit policies.
“But the loan cannot be credited to the NRE savings account. It will be credited to the NRO account for domestic use” added Virendra Somwanshi from the Bank of Baroda.
If an FCNR account is closed before a year, there is no interest.
Additionally, if the FCNR deposit is prematurely closed before one year, according to RBI regulation, no interest would be paid on it.
Deposits with FCNR are accepted for terms ranging from 12 months to five years, and interest on such deposits is paid at the account holder’s discretion (half-yearly, yearly, or on the maturity of the term deposit).
What is a Fixed Deposit
You deposit a lump quantity of money into a fixed deposit for a predetermined length of time at a predetermined rate of interest. You receive the money you initially invested plus compound interest at the end of the fixed deposit’s term.
To ask any questions related to the rights of NRIs, PIOs, and OCIs, you can download SBNRI App from the Google Play Store or App Store. You can also use the SBNRI app for investment in stock market/ mutual funds, NRI account opening, tax filing, etc. To ask any questions, click on the button below. Also, visit our blog for more details.
FAQs
The US Dollar, British Pound (GBP), Canadian Dollar (CAD), Australian Dollar (AUD), and Japanese Yen (JPY) are all accepted.
SBI, Federal Bank, and ICICI are some of the banks that offer this.
You deposit a lump quantity of money into a fixed deposit for a predetermined length of time at a predetermined rate of interest.
BoB stands for the Bank of Baroda.
