FCNR Account (Foreign Currency Non-Resident Account)
Legally reviewed by Advocate Naresh Kalra -- see full credentials -- reviewer credit only, no consultation link, per platform editorial policy (see /editorial-guidelines/).
An FCNR (Foreign Currency Non-Resident) account is a term-deposit account that lets an NRI hold savings in a foreign currency itself -- US Dollars, Pounds Sterling, Euros, and other RBI-permitted currencies -- rather than converting to Indian Rupees, eliminating exchange-rate risk on the deposit until it matures or is repatriated.
Unlike an NRE account, which is denominated in Rupees even though it is funded from foreign earnings, an
FCNR account keeps the deposit itself in the original foreign currency, so its value doesn’t fluctuate
with the Rupee exchange rate during the deposit's term. FCNR deposits are available only as term deposits
(not savings accounts), typically for tenures between one and five years, and both principal and interest
are freely repatriable, with interest exempt from Indian income tax while NRI status is maintained -- the
same tax treatment as an NRE account, but with the added currency-risk protection an NRI planning to
eventually move the funds back to their country of residence often specifically wants.
