FCNR (Foreign Currency Non-Resident) deposits hold and pay in foreign currency (USD, GBP, EUR, JPY, AUD, CAD, etc.). Tenure 1–5 years. Both principal and interest are tax-free in India and fully repatriable.
Maturity (foreign currency)
$0
Interest earned
$0
Maturity in INR
₹0
Original INR cost
₹0
Total INR gain
₹0
Effective INR yield
0%
FX gain / loss
₹0
FCNR features
No exchange risk on the foreign currency leg — your interest is paid in the same currency.
Tax-free in India: Both principal and interest. Tax may still apply in your country of residence.
Repatriable: Fully — no $1M annual cap (unlike NRO).
Tenures: 1, 2, 3, 4, 5 years only (no premature withdrawal for first year).
Rate ceiling: RBI caps FCNR rates at ARR (alternative reference rate) + spread. Currently ~5% in USD vs ~7% in NRE/NRO INR FDs — the gap is the embedded FX hedge cost.