The FCNR accounts or Foreign Currency Non-Resident accounts are fixed deposit accounts for non-residential Indians (NRIs). Such an account is useful if an NRI is looking to invest money in India while limiting the risk of market volatility at the same time.
Here is a look at some of the features of the FCNR account, which is a great tool for an NRI investing in India.
1. Deposits can be made in any currency
If you are an NRI, it means that most of your income will be in the official currency of the country you are residing in. The FCNR account allows you to invest in a term plan in India with any foreign currency, without having to convert your funds into INR. This is why the FCNR is also known as a foreign currency account.
This further reduces your risk of being susceptible to
market volatility and the rise and fall of the Indian currency with regards to other denominations.
2. Flexible term for investment
With any investment, the tenure or term is one of the most important factors, which determine the overall return. For FCNR account, you are eligible to invest for as little as a single year. You can also decide to invest for a maximum of five years, which will likely increase your overall return. Moreover, only 1 percent of the interest will be penalized if such an account is closed prematurely.
3. No taxation on the interest
The interest garnered through an FCNR account is not taxable in India. This is a major advantage that will help you maximize the return on investment. However, taxation may occur on the interest in the country of your residence. It is better if you do a thorough research regarding the taxes before you decide to invest.
4. Freely repatriable fund
If you decide to invest in a FCNR account, you would be able to repatriate the sum from your Indian account to your overseas bank account, without any restriction or limitation. Furthermore, there is no charge for such a remittance.
5. FCNR accounts can be used to make local payments
The funds that you earn through an FCNR account can be used to make any payment locally in India. This is useful if you need to make transactions in India, but do not have either an NRE or an NRO savings account.
Thus, FCNR accounts are good Indian investment vehicles for NRIs. Consider all the advantages that an FCNR account poses and proceed accordingly.
Here is a look at some of the features of the FCNR account, which is a great tool for an NRI investing in India.
1. Deposits can be made in any currency
If you are an NRI, it means that most of your income will be in the official currency of the country you are residing in. The FCNR account allows you to invest in a term plan in India with any foreign currency, without having to convert your funds into INR. This is why the FCNR is also known as a foreign currency account.
This further reduces your risk of being susceptible to
market volatility and the rise and fall of the Indian currency with regards to other denominations.
2. Flexible term for investment
With any investment, the tenure or term is one of the most important factors, which determine the overall return. For FCNR account, you are eligible to invest for as little as a single year. You can also decide to invest for a maximum of five years, which will likely increase your overall return. Moreover, only 1 percent of the interest will be penalized if such an account is closed prematurely.
3. No taxation on the interest
The interest garnered through an FCNR account is not taxable in India. This is a major advantage that will help you maximize the return on investment. However, taxation may occur on the interest in the country of your residence. It is better if you do a thorough research regarding the taxes before you decide to invest.
4. Freely repatriable fund
If you decide to invest in a FCNR account, you would be able to repatriate the sum from your Indian account to your overseas bank account, without any restriction or limitation. Furthermore, there is no charge for such a remittance.
5. FCNR accounts can be used to make local payments
The funds that you earn through an FCNR account can be used to make any payment locally in India. This is useful if you need to make transactions in India, but do not have either an NRE or an NRO savings account.
Thus, FCNR accounts are good Indian investment vehicles for NRIs. Consider all the advantages that an FCNR account poses and proceed accordingly.
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