The below content is purely for informational purposes and is not intended to constitute advisory of any kind. Please note, these are in-depth articles which are best viewed on large screen devices like laptops, desktops and tablets. The position reflected in this article has been updated as of May 15, 2025.
As a Non-Resident Indian (NRI)/Person of Indian Origin (PIO)/Overseas Citizen of India (OCI), you may wish to invest your overseas earnings in foreign currency in a fixed deposit account in India. For such term deposits, a Foreign Currency Non-Resident Bank (FCNR (B)) account is all you need. In this article, we will delve into the benefits, features and key considerations of FCNR (B) accounts.
What is an FCNR (B) account?
An FCNR (B) account lets you maintain a fixed deposit in India in freely convertible foreign currencies for a tenure by RBI as may specify in this behalf. Since the account is maintained in foreign currency, it secures your funds against currency fluctuations during the tenure of the deposit. Like a Non-Resident External (NRE) bank account, the funds in this account and the interest earned are tax-free in India.
An FCNR (B) account lets you transfer funds from your NRE account or vice versa. You can also directly remit funds from your overseas bank account to open an FCNR (B) account in India. The funds will be converted to the desired foreign currency, at the prevailing exchange rates provided by your bank. Commonly used currencies are Australian Dollar (A$), British Pound (£), Canadian Dollar (C$), Euro (€), Japanese Yen (¥) and US Dollar ($). As per the prevailing Foreign Exchange Management Act (FEMA) regulations, banks are allowed to accept FCNR (B) deposits in any currency which is freely convertible. Please consult with your bank to know the permissible currencies for opening an FCNR (B) deposit.
There is no restriction on the amount of money that can be deposited in your FCNR (B) accounts. The principal amount in the term deposit and the interest earned are fully repatriable i.e., the funds can be transferred to an overseas account without any upper limits.
For the latest rates offered by ICICI Bank, click here
Did you know?
In 1975, the Reserve Bank of India (RBI) introduced FCNR (A), which was discontinued and later replaced by the FCNR (B) account in 1993.
Funds that can be deposited into an FCNR (B) deposit
NRIs often have queries regarding the types of funds that can be deposited into an FCNR (B) account. Here is a quick list:
- Inward remittance from outside India,
- Interest accruing on the account,
- Interest on investment,
- Transfer from other NRE/ FCNR(B) accounts,
- Maturity proceeds of investments (if such investments were made from this account or through inward remittance).
- Current income like rent, dividend, pension, interest etc. will be construed as a permissible credit to the NRE account.
- Any other credit if covered under general or special permission granted by RBI.
Features of an FCNR (B) account at a glance
Please note, tables are best viewed on desktops or in landscape mode on mobile phones. On mobile phones, please swipe to view all content.
Who can apply for an FCNR (B) account? | Only NRIs/PIOs/OCIs can open an FCNR (B) account. Under the prevailing FEMA regulations, you will be considered an NRI if:
|
Account features |
|
Documentation requirements*** |
|
Premature withdrawal |
|
Repatriation | Funds (both principal and interest) from this account are fully repatriable without any limits. |
Taxation | Interest earned in the account is exempt from income tax in India. but the same has to be disclosed under exempt income.**** |
*Relative is defined under section 2 (77) of the Companies Act, 2013. This includes their parents (including stepparents), son (including stepson), son’s wife, daughter, daughter’s husband, siblings (including stepsiblings), and children
**The term ‘former’ or ‘survivor’ basis refers to the condition where only one of the two joint account holders that is the former account holder can primarily operate the account. The ‘Survivor’ can only operate the account after the ‘Former’ passes away.
***The list mentioned is indicative and are not exhaustive. These may differ from bank to bank. You may want to consult your bank for more details.
You can open an FCNR (B) account online using internet or mobile banking or by visiting your nearest branch.
Conclusion
Opening an FCNR (B) account as a non-resident offers you various advantages. You can open a fixed deposit in foreign currency and earn interest which is exempt from tax in India. You can also use your FCNR (B) account as collateral for loans.
Disclaimer:
The contents of this article/infographic are meant solely for informational purposes. The contents are generic in nature and are not intended to serve as a substitute for specific advice on any matter whatsoever. The information is subject to updation, completion and verification and the applicable norms may keep changing materially from time to time. This information is also not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to applicable laws or would subject ICICI Bank Limited/its affiliates to any licensing or registration requirements. ICICI Bank Limited/its affiliates and their representatives shall not be liable for any direct or indirect losses or liability incurred arising in connection with any decision taken by any person on the basis of this content. Please conduct your own due diligence and consult your financial advisor before making any decision. Terms and conditions of ICICI Bank and third parties apply. ICICI Bank is not responsible for third party services. Nothing contained herein shall constitute or be deemed to constitute an advice, invitation or solicitation to avail any products/ services of third parties.