Facts About FCNR Deposits You Should Know

 For creating a corpus, you need a good amount of savings and investments. You can place your money away in a bank fixed and recurring deposits or even invest in the share market. The idea s to plan the investments such that you accrue high returns and liquefy the investments when needed. If you are a conservative investor and prefer to park the savings securely, fixed deposits are the way to go. NRIs, too, can turn their foreign currency earnings into fixed deposits.

Yes, you can open a foreign currency non-repatriable deposit or FCNR account. But there are some facts that you should be aware of before opening one.

Not an account but a fixed deposit

Most NRIs think that FCNR is an account. But instead, it is a deposit. As an NRI, you can either open an NRE or NRO account. You can deposit foreign currencies in the former account and INR in the latter. Once you have adequate savings in the NRE account, you can create a fixed deposit of the same. These FDs are called as NRE fixed deposits, a term often used with foreign currency account.

Maintain deposits in different currencies

Many banks enable you to maintain the fixed deposits in different international currencies. Generally, the currencies in which you maintain the FCNR deposits include Britain Pound, Euros, Yen, Swiss Francs, Krone, and Krona. You can also maintain the FD in dollars such as American, Australian, New Zealand, Canadian, and Singaporean.

Be aware of tenure and premature withdrawal penalties

You can open FCNR account for a tenure ranging between a year to five years. A handful of banks offer 10 years tenure for such deposits. The best part is that they are risk-free and you need not worry about currency fluctuations. Also, the FCNR rates are in foreign currency where the FD gets maintained. You can also prematurely withdraw the FD before the term ends, but you need to bear the penalty for premature withdrawals. If you want to break the FD before a year, you may not be eligible for any interest rates on the deposits.

Open the deposit online

As an NRI, it might not be possible for you to visit the Indian banks and create a fixed deposit. Precisely why, all banks offering NRI facilities, enable you to open FCNR account online. It should consider account where the foreign currencies get deposited such as NRE or FCNR. You can easily create the FD by transferring funds from either of the account through wire transfers. You can create this FD while in India by depositing the travellers’ cheque or make foreign earning cash deposits.