Know the risks of FCNR (B) Deposits for NRIs | Fusion - WeRIndia

Non Residential Indians (NRIs) can open a Foreign Currency Non Resident Deposits despite there being certain restrictions on them. FCNR (B) deposits can only be held in foreign currency. These accounts can be opened by NRIs, PIOs, and even OCIs.

These accounts can be opened in a variety of currencies like the Great Britain Pound (GBP), US dollar, Japanese Yen, Euro and the Australian Dollar. Based on the currency you are holding the deposit under the rate of interest also differs.

When opening these accounts, the main risk is the risk of currency. One can hedge these currency risks and even consult experts who can give solutions on them. The advantage of FCNR (B) account is that they are freely repatriable.

There are several different types of FCNR (B) accounts which one can open. They include term deposits and special term deposits. One can nominate through these deposits. The interest and the principal are both repatriable.

If you are looking to invest, it is better to opt for NRE deposits. They have higher interest rates than FCNR (B). They are also freely repatriable on the principal and the interest. NRO deposits also have advantage of tax implications on them. The interest earned is subject to tax deducted at source.

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