The non-resident Indian banking services have become famous today, with more Indians moving to foreign countries, especially for employment purposes. Banks provide a range of savings and deposits meant for NRIs. These accounts let them conveniently park their funds in Indian Rupees and other foreign currencies. They are also easily repatriable. NRIs can also open Fixed Deposits and earn returns.
But knowing the NRI Account best suits, your requirement is essential. The most common account is an FCNR Account. Here’s everything about it, from FCNR rates to the opening process.
Definition
FCNR Accounts are essentially FD Accounts meant for NRIs. They are created for NRIs interested in investing money in India. It is also for those who wish to limit their market volatility risks. FCNR Accounts enable NRIs to avoid fluctuations in the exchange rates of various foreign currencies.
Account opening
NRIs abroad can open FCNR accounts online with any bank if it is authorised to offer NRI Accounts. You can open the account jointly with another NRI or a resident Indian, your close relative. However, the resident joint account holder may only serve as your power of attorney and holds limited control over operating the account. The minimum tenure is a year, while the maximum is five years.
Currency maintained
Until 2011, one could maintain FCNR in only six major foreign currencies: US Dollars, Euros, Pound Sterling, Canadian Dollars, Australian Dollars, and the Japanese Yen. However, in October 2011, the Reserve Bank of India allowed banks to accept these deposits in any acceptable currencies, i.e., foreign currencies that are freely convertible.
NRIs can now maintain their FCNR Deposits in Swiss Francs, Swedish Kronor, and Danish Kroner, among other currencies.
Transferring funds to the account
Opening such deposits and transferring funds into them is easy. However, remember that funds can only be transferred into these accounts from your overseas account. There are three ways in which you can transfer funds into the account:
- You can open FCNR by directly transferring funds from your Bank Account overseas. The funds get transferred either via Wire Transfer or through a cheque transaction.
- If you have an existing Non-Resident External or NRE Account, you can transfer funds directly and create an FCNR Deposit.
- If you have foreign currency notes or travellers’ cheques while visiting India, then you use them to open an account by visiting an authorised bank.
Premature withdrawals
If need be, you can withdraw the FCNR Deposits before the completion of the term. However, to earn any FCNR interest rates, you must maintain it for a minimum of one year. If you decide to close the FD before the term, the bank is not obligated to pay any interest. For long-term accounts, banks can levy a penalty interest of a per cent on premature withdrawals. You can freely repatriate the funds parked in your account outside India.
NRIs having foreign currency savings must utilise NRI services to their advantage. Opening the account is one of the best ways of earning good FCNR Deposit rates on savings.
