Definition of FCNR
FCNR stands for Fixed Currency Non Repatriable Account deposit.
It is a fixed account and normally in major currencies like US Dollar, UK Pound, Canadian Dollar, Japanese Yen, Euro etc. Earlier to 2011 FCNR could be kept in only six major currencies but now it is permitted in every currency.
Brief Explanation of FCNR
It is an account normally kept by riches. It can easily be kept in foreign currency and thus is a fixed deposit account. It is an excellent and easy option to keep money in foreign currency and earn good yield through interest.
ADVANTAGES OF FCNR:
- It can be opened with minimum deposit amount as low as US Dollar 1,000
- It can be retained from 1 to 5 years and can be renewed.
- It can be renewed with 14 days of maturity.
- Interest earned is non-taxable.
- It can be open from some overseas location.
- Nomination facility is also available in FCNR as in any other bank account type.
- It is the best investment method to keep your money in strong currency when there is fluctuation in currency rates.
- The amount can be redeemed even before the maturity of the account.
- It helps you earn high interest than a local deposit.
DIS ADVANATAGES OF FCNR:
- If deposit is withdrawn within a year than no interest is received.
- They are just fixed deposit accounts and not savings or current accounts.
- The interest received is although free but is taxable in the country of the residence of accountholder.
- In the past few cases have been seen where during the time of financial crisis banks were not able to pay interests.
The amount deposited to the account must be from some overseas mean.
Interest rates vary from currency to currency and bank to bank.