Investment Guidance
FCNR vs NRE Deposit Comparison
Compare a USD-denominated FCNR (B) deposit against a rupee NRE fixed deposit, and find the rupee depreciation rate at which they break even.
Deposit amount
Tenor
FCNR deposits run 1 to 5 years. Nothing shorter is permitted.
FCNR rate (USD)
What your bank quoted.
NRE FD rate (INR)
For the same tenor.
Assumed rupee depreciation
Your assumption, not a forecast. Set it to the break-even below to see the tipping point.
FCNR (USD)
$117,424
Fixed in dollars
NRE (INR)
$112,109
Depends on the rupee
Break-even rupee depreciation
1.42%
Below this, NRE wins. Above it, FCNR wins.
FCNR returns $5,315 more over 3 years at 3% annual rupee depreciation.
Key Points
FCNR at 5.5% USD → $117,424 at maturity. This number cannot change: the deposit is held in dollars.
NRE at 7% INR → $112,109 at maturity, but only if the rupee weakens by 3% a year. Faster, and you get less.
Break-even is 1.42% annual rupee depreciation. Below that NRE wins, above it FCNR wins.
Interest on both is exempt from Indian income tax while you are a non-resident — s.10(4)(ii). Neither has a TDS advantage over the other.
Both are fully repatriable, principal and interest, with no USD 1M cap.
FCNR minimum tenor is 1 year and maximum is 5. Breaking before 12 months usually forfeits all interest.
Your home country may still tax this interest. India exempting it does not make it tax-free to the IRS.
Next Steps
Get the FCNR rate in writing for your exact tenor — banks quote different rates per bracket and they move weekly.
Ask whether interest compounds half-yearly or is paid at maturity. This tool assumes annual compounding, which is the conservative read.
If you will need the money in India, weigh that an NRE deposit avoids a conversion on the way back in.
Check whether your bank charges a currency conversion spread when funding the FCNR from your local account.
Want a personalised review?
Anil Grandhi CA · ex-PwC · Free 15-min call
Educational estimate using annual compounding, not a rate quote or investment advice. Depreciation is your assumption, not a forecast — the rupee's past average is not a promise. Confirm live rates with your bank.
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