In this article, we’re breaking down FCNR, full form definition, comparisons, and an explanation about who can open an FCNR account.
We will also answer common questions about FCNR accounts and help you decide if opening an FCNR is right for you.
This is part of our free series on banking in India, covering topics like opening an NRI bank account, which you can access here.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- FCNR Full Form
- What Are FCNR Accounts?
- NRO Account vs FCNR Account
- Frequently Asked Questions
- Do You Want Help Opening Bank Accounts?
FCNR Full Form
FCNR full form is “Foreign Currency Non-Resident bank account”. The meaning of this type of bank account is one that is offered to Non-Resident Indians (NRI) and allows them to deposit foreign currency at Indian banks.
The main reason for opening an FCNR account is to protect foreign earnings from currency fluctuation and to benefit from high-interest rates. This is especially important for any NRI that is seeking the repatriation of their overseas income to India.
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What Are FCNR Accounts?
FCNR accounts are Foreign Currency Non-Resident accounts, which allow Non-Resident Indians (NRIs) to hold foreign currencies with Indian banks. Deposits can be held in major currencies, including United States Dollars (USD or $), Great British Pounds (GBP or £) euros (EUR or €), Canadian Dollars (CAD or $), and more.
The reason why NRIs may consider opening an FCNR account is that banks pay a fixed interest rate that is often more attractive than those available elsewhere. Additionally, opening an FCNR allows the account holder to capture these attractive rates while avoiding any fluctuations in currency exchange rates.
Here is a closer look at these and other benefits that can be obtained when opening an FCNR account.
What Are the Benefits of FCNR Accounts?
- Attractive interest rates
- No exchange rate risks
- Ability to hold multiple currencies
- Geographic diversification
- Currency diversification
NRO Account vs FCNR Account
The main difference between an NRO account and a FCNR account is that an NRO account is a Non-Resident Ordinary bank account that holds Indian rupees while an FCNR account is a Foreign Currency Non-Resident bank account that holds foreign currency.
Additionally, NRO accounts are subject to Indian income taxes on any related earnings, while FCNR accounts are exempt from paying Indian income tax. Lastly, NRO accounts are eligible to receive deposits from income in India while FCNR accounts are not.
Frequently Asked Questions
Below are a few of the most common questions we receive from people looking into an FCNR full form. If you have further questions you would like to ask our team, don’t hesitate to get in touch.
Who Can Open an FCNR Account?
An FCNR account can be opened by Non-Resident Indians (NRIs), Person of Indian Origin (PIOs), and Overseas Citizens of India (OCIs). These groups are eligible for a range of different benefits in India, though only NRIs are considered citizens of the country.
Is FCNR a Good Investment?
FCNR accounts could be a good investment for individuals looking to protect their savings from fluctuations in currency exchange. However, if you are looking to make investment decisions, it’s important that you consider all of your financial goals and the available options before making a final choice.
What Is NRE and FCNR?
NRE and FCNR are two types of bank accounts offered to non-resident Indians (NRIs). More specifically, an NRE account is a Non-Resident External account that is denominated in Indian rupees. On the other hand, an FCNR account is a Foreign Currency Non-Resident account, which is denominated in foreign currencies.
Which Is Better FCNR or NRE?
Whether an FCNR account or an NRE account is better will depend on the specific goals that a person is trying to achieve. This is because an FCNR (Foreign Currency Non-Resident) account allows deposits in foreign currency without exchange rates and NRE (Non-Resident External) account allows Indian rupees. In short, FCNR accounts are better for individuals looking to hold foreign currency and protect against exchange risk. On the other hand, NRE accounts are better for holding Indian rupees.
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