Investment
4 mins
Neha Navaneeth
Marketing & Content Associate
Currency fluctuations can change the value of income earned in foreign currencies. An FCNR account enables NRIs to securely invest their foreign earnings in India, protecting them from fluctuations in exchange rates. In addition, interest on FCNR deposits is not taxable. This blog explains what an FCNR account is and compares the top Indian banks' FCNR interest rates so that you know which best qualifies for your savings goals.
What is an FCNR account?
The FCNR, or Foreign Currency Non-Resident Account, is a type of term deposit that allows NRIs to hold money in foreign currency and receive interest income in India. It works like any other term deposit but protects your money from exchange rate fluctuations.
The funds along with interest accrued in FCNR deposit can be repatriated to overseas accounts. So, it suits NRIs planning to spend that money internationally down the road. It’s an ideal choice for risk-averse investors, seeking stable, assured return with FCNR interest rates and without exposure to currency or equity markets. If you plan to return to India or fund future global expenses such as education or property, FCNR deposits provide security combined with liquidity.
Benefits of FCNR Deposits for NRIs
FCNR deposits give NRIs the advantage of security, liquidity, and currency risk protection.
No exchange rate risk: From deposit to withdrawal, the money remains in the same foreign currency.
Fully repatriable funds: Both principal and interest may be transferred to foreign accounts without any restrictions (at maturity).
Tax-free interest: As the interest earned on FCNR deposits is tax-free, an NRI earns the benefit of full returns generated from that deposit without any deduction.
Fixed Income: Like all term deposits, FCNR accounts also assure predictable, constant income from interest
Wide choice of currencies: You can choose from major global currencies (USD, GBP, EUR, AUD, and SGD), depending on where your income originates.
Learn more about NRE Vs FCNR Vs Gift accounts
FCNR Interest Rates Across Top Indian Banks (2025)
The following are some of the current published FCNR deposit interest rates. All figures are approximate and subject to change.
ICICI Bank:
Tenure | USD | SGD | GBP | AUD | CAD |
12 months to < 24 months | 4% | 1.6% | 4.25% | 3.75% | 2.65% |
≥ 24 months to < 36 months | 3.5% | 1.55% | 3.8% | 3.6% | 2.5% |
≥ 36 months to < 48 months | 3.25% | NA | NA | NA | NA |
≥ 48 months to < 60 months | 3.25% | NA | NA | NA | NA |
60 months | 3.25% | NA | NA | NA | NA |
Source: ICICI Bank website
HDFC Bank:
Tenure | USD | EUR | GBP | JPY | AUD | CAD | SGD |
12 months to < 24 months | 3.70% | 1.85% | 3.60% | 0.01% | 3.60% | 2.15% | 1.35% |
≥ 24 months to < 36 months | 3.40% | NA | NA | NA | 3.50% | 2.05% | NA |
≥ 36 months to < 48 months | 3.30% | NA | NA | NA | 3.45% | 2.00% | NA |
≥ 48 months to < 60 months | 3.00% | NA | NA | NA | 3.40% | 1.85% | NA |
60 months | 2.80% | NA | NA | NA | 3.20% | 1.65% | NA |
Source: HDFC Bank website
HSBC Bank:
Tenure | USD | GBP | EUR | JPY | AUD | CAD | DKK | CHF | SEK |
1 year to less than 2 years | 3.25% | 4.00% | 0.01% | 0.01% | 0.10% | 0.10% | 0.01% | 0.01% | 0.01% |
2 years to less than 3 years | 2.75% | 0.50% | 0.01% | 0.01% | 0.10% | 0.10% | 0.01% | 0.01% | 0.01% |
3 years | 2.75% | 0.50% | NA | NA | NA | NA | 0.01% | 0.01% | 0.01% |
Source: HSBC bank website
Factors That Influence FCNR Account Interest Rates
FCNR interest rates don't move in isolation. They depend upon a host of economic and regulatory factors that determine the pricing of foreign currency deposits by banks.
Global interest rates: As FCNR deposits are held in foreign currencies such as the USD, GBP, or EUR, their rates reflect central bank benchmarks like the US Federal Reserve, Bank of England, and European Central Bank policy rates. With a rise in global rates, banks tend to raise FCNR rates.
RBI guidelines: The Reserve Bank of India sets rules on the maximum interest rates banks here can give for FCNR accounts. In times of rupee volatility, the RBI adjusts these guidelines to attract foreign deposits.
Bank-specific factors: The cash demands, how much fluid money a bank holds, or its reach overseas, can shape what rates it offers.
Tenure's length: When you compare FCNR interest rates offered by top banks, it’s clear that a shorter tenure of 1 year to less than 2 years is more profitable. Banks lower interest rates for a longer tenure due to the currency and foreign exchange risk.
Conclusion
The FCNR interest rates help NRIs earn stable, tax-free returns without worrying about exchange rate changes. With the stability of fixed deposits plus room to handle funds in foreign currencies, these accounts mix security, easy transfer options, and tax-free returns for people earning abroad. Prior to setting up an account, look at different banks’ FCNR deposit rates: small gaps in rates can add up big over the years.
Ready to make smarter financial choices as an NRI? Rupeeflo helps you compare NRI accounts, investment options, and interest rates across India's leading banks on a single platform.
Frequently Asked Questions
What is FCNR Account full form?
The full form of FCNR account is Foreign Currency Non-Resident Account. It’s a type of fixed deposit account for NRIs.
Does India tax the returns from FCNR savings?
No, with FCNR accounts, NRIs don’t pay Indian taxes on either the main sum or the earnings. The funds can be repatriated fully to your foreign bank account without restrictions.
What currency works best when setting up an FCNR savings deal?
It depends on where your money comes from, along with what you’re aiming for down the line. When you're bringing in dollars or expect to get back returns in that currency, going for a dollar-based FCNR stash tends to work well. People living in Britain might lean toward pounds instead. Pick a type of currency you'll actually need later on to skip exchange fluctuations.
Can I withdraw money from an FCNR account early?
Banks need not pay interest if you withdraw funds before 1 year. After 1 year, if you withdraw prematurely before maturity, some banks may impose a penalty.
