The Biggest Misconceptions NRIs Have About FCNR Deposits
Not all NRIs are aware of an FCNR Deposit for NRIs in India . It's one of the most talked-about NRI investment products, and also one of the most misunderstood. Before you park your foreign earnings into one, it's worth clearing up where most people go wrong. FCNR Deposits Are Not the Same as NRE Fixed Deposits NRE deposits are held in Indian Rupees, which means your returns are exposed to currency fluctuation the moment you convert. An FCNR deposit is held in a foreign currency, such as USD, GBP, EUR, AUD, and a few others, so the principal and interest stay in that currency until you choose to convert. If you're saving toward a goal in your country of residence, this distinction alone can help protect your returns from rupee volatility. The Interest Is Not Taxed in India It is one of the most persistent myths that interest is not taxed in india. Interest on FCNR deposits is fully exempt from tax in India, regardless of your NRI status or duration. Many NRIs skip this p...