Foreign Currency Non Resident Deposit
A Foreign Currency Non-Resident (FCNR) Deposit is unique to India and is primarily meant for non-resident Indians (NRIs) and persons of Indian origin (PIOs), who want to hold monetary deposits in their chosen foreign currency. Currency options available are usually the USD, GBP, EUR, JPY, AUD and CAD. A major advantage of holding an FCNR deposit is that the depositor need not worry about exchange rate fluctuations and can choose a term between 1 to 5 years.
The FCNR deposit is created via remittance from India or from an existing FCNR account. The minimum amount that is necessary for a FCNR deposit may differ in banks. A FCNR deposit may be opened jointly with an NRI or PIO only. Loans against FCNR deposits may also be made available to the depositor or to a third party at the behest of the depositor. FCNR deposits interest rates are modified every month. FCNR deposits are generally dominated by major foreign currencies. Many international financial institutions with Indian branches offer FCNR deposits at attractive interest rates to local residents with Indian businesses to effectively manage their overseas earnings.