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FCNR | Ratekhoj.com, Best Fixed Deposits, Loans, Insurance Rates and Credit Cards

SBI, ICICI and other banks have FCNR deposit accounts to NRIs have increased the interest rates being offered based on a RBI hike in ceiling on interest offered by such accounts. The rates have gone up by 75bps or 0.75% for FCNR deposits of  between 1 and 3 years. The rates have gone up by 175 bps or 1.75% for deposits with maturity periods of over 3 years. With this hike, FCNR deposits now give an interest rate of 3.67% for deposits of between 2 and 3 years, while deposits of 5 years duration now fetch an interest rate of 4.11%.

Non-Resident External (NRE) and Foreign Currency Non-Resident fixed deposit rates have been cut by banks in India effective from April 1, 2009.

The new NRE interest rates are as follows:

Duration Rate
1 year to less than 2 years 3.72
2 years to less than 3 years 3.15
3 years to less than 5 years 3.45

 

The new FCNR fixed deposit rates are as follows:

                   US$ Euro GBP CAN$ AUD YEN
1 year to less than 2 years 2.97 2.83 3.07 2.98 4.92 1.94
2 years to less than 3 years 2.40 2.82 3.12 1.92 4.38 1.78
3 years to less than 4 years 2.70 3.16 3.50 2.22 4.83 1.85
4 years to less than 5 years 2.99 3.45 3.82 2.43 5.23 1.92
5 years 3.23 3.68 4.06 2.60 5.42 1.98

 

NRE accounts are held in rupees and both the deposit amount and interest are completely repatriable. FCNR accounts are held in a foreign currency and in these accounts as well both the fixed deposit amount as well as interest earned are repatriable. Both NRE and FCNR accounts are not subject to taxes in India and that forms one of the attractions of these accounts to NRIs.

Note that all banks in India (public sector, private sector and foreign) offer the same interest rates on NRE and FCNR fixed deposit accounts. Note that you can also open a NRE savings account for which the interest offered is 3.5%. There is no savings account option for FCNR accounts.

Ratekhoj is a source for the latest NRE and FCNR fixed deposit interest rates.

There are several options available for NRIs considering opening a account in an Indian bank: Non-Resident Ordinary (NRO) Savings Account, NRO Fixed Deposit Account, Non-Resident External (NRE) Savings Account, NRE Fixed Deposit Account and Foreign Currency Non Resident (FCNR) Fixed Deposit Account.

Each of these account types has certain advantages and disadvantages. Understanding them can help you in making a choice. Factors to consider include:

Key aspects of NRE accounts are as follows:

Key aspects of NRO accounts are as follows:

Key aspects of FCNR accounts are as follows:

NRE and FCNR accounts have the advantages of not having to pay taxes in India which could be a hassle for NRIs trying to figure out the tax rules in India as well as their country of residence.

People opening NRE accounts and would like to repatriate their funds at some point must consider the foreign currency conversion rates at the time the funds are being deposited versus the time when the funds have to be repatriated. This can carry risks as well as rewards depending on the forex rates trend. For example, if $1000 is converted to Indian rupees at Rs. 50 per dollar and then converted back to dollars at a conversion rate of Rs. 40 per dollar, then you would get back $1250 for a good gain. On the other hand, if the dollar is at Rs. 55 per dollar, you would lose some of your principal when you do the repatriation.

FCNR accounts do not carry any forex rate risk as the accounts are always maintained in the foreign currency.

NRO accounts have the advantage of being able to deposit funds from both sources in India and abroad and having joint account holders in India. Repatriability of funds is a disadvatage for NRO accounts.

The key advantage of NRO fixed deposit accounts is the substantially higher interest rates as compared to FCNR and NRE accounts. Check Ratekhoj for latest NRO fixed deposit interest rates offered by various banks in India. The rate of interest offered is different in different banks and also depends on the fixed deposit tenure. So your choice of which bank to open a account in can depend on the interest rates.

FCNR and NRE fixed deposit accounts typically yield much lower than NRO fixed deposit accounts. Check Ratekhoj for latest FCNR and NRE rates. Most banks in India offer the same interest rate for FCNR and NRE fixed deposit accounts. So if you are planning to choose a bank for your NRE or FCNR fixed deposits, interest rates offered is not a consideration.

Both NRE and NRO savings accounts yield 3.5% currently. There is no savings account option for FCNR accounts.

NRE Savings and NRO Savings accounts allow you to have family members in India as mandate holders whereas you cannot have mandatees for the fixed deposit options available in NRE, NRO and FCNR accounts. Mandate holders can withdraw funds from your accounts in India with some type of a card such as a debit card of a ATM card. They can also withdraw funds at the bank locations. Banks such as Citibank allow you to even specify certain conditions on the amounts of withdrawals allowed per month on the operations of the mandatee.

Most banks also provide for taking loans for a certain percentage of your existing balance on your NRE, NRO and FCNR fixed deposit accounts. Check with the banks for details on loans.

Many banks in India have raised the interest rates for Non Resident External (NRE) and Foreign Currency Non Resident (FCNR) fixed deposit accounts effective from November 17, 2008. NRE accounts are rupee denominated accounts that can be opened by Non Resident Indians and have fixed deposit terms ranging from 1 year to 5 years. FCNR accounts can be opened by Non Resident Indians and are denominated in 6 different foreign currencies - US Dollars, Canadian Dollars, Euros, Sterling Pounds, Australian Dollars and Japanese Yen.

NRE term deposits for a period of 1 year to 2 years will now yield 4.92%, while those for a term of 2-3 years will yield 4.41%. NRE deposits for a period of 3 years upto 5 years will now give an interest of 4.89%.

FCNR accounts denominated in US dollars will yield 4.17% for a term of 1 to 2 years, 3.66% for a term of 2 years to 3 years,  4.14% for a term of 3 years to 4 years, 4.49% for a term of 4 years to less than 5 years and 4.76% for a term of 5 years. The table given below gives the complete table of FCNR interest rates:

                   US$ Euro GBP CAN$ AUD YEN
1 year to less than 2 years 4.17 5.87 7.01 4.17 7.28 2.16
2 years to less than 3 years 3.66 4.59 5.18 3.26 6.14 1.87
3 years to less than 4 years 4.14 4.70 5.32 3.52 6.44 1.94
4 years to less than 5 years 4.49 4.81 5.42 3.70 6.66 2.05
5 years 4.76 4.91 5.51 3.89 6.72 2.15

 

Most banks offering FCNR and NRE accounts in India have announced this increase in interest rates including State Bank of India, Syndicate Bank, Allahabad Bank, Bank of Baroda, Corporation Bank and State Bank of Mysore.

Oct 17, 2008, Ratekhoj.com. Several banks in India have hiked the interest rates on Foreign Currency Non Resident (FCNR) and Non Resident External (NRE) accounts effective immediately. The increase of 50 basis points (or 0.50%) in interest rates in NRE and FCNR accounts is based on changes in Reserve Bank of India guidelines.

SBI, PNB, Dena Bank, Syndicate Bank are among the banks that have increased the FCNR and NRE rates. The FCNR rate changes impact deposits in US dollars, Euros, Canadian dollars, Japanese Yen and Australian dollars.

With these changes NRE rates for a term of 1 to 2 years stands at 4.96%. The rates for a term of 2 to 3 years is 4.27% and rates for terms of 3 years and above are 4.56%.

FCNR accounts denominated in US dollars earn a interest of 4.21% for a deposit term of 1 to 2 years. Euro accounts for the same term of 1 to 2 years will earn a interest of 5.74%. US dollar FCNR accounts for a maturity period of 5 years earn a interest of 4.14%. The following table provides a complete listing of current FCNR rates:

  US$ Euro GBP CAN$ AUD YEN
1 year to less than 2 years 4.21 5.74 6.77 5.05 8.05 1.47
2 years to less than 3 years 3.52 4.87 5.57 3.27 6.55 1.36
3 years to less than 4 years 3.81 4.84 5.50 3.42 6.56 1.46
4 years to less than 5 years 3.95 4.87 5.46 3.55 6.61 1.55
5 years 4.14 4.87 5.43 3.67 6.59 1.62