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Difference between FCNR and NRE

Difference between FCNR and NRE

There are a few key differences between FCNR (Foreign Currency Non-resident) and NRE (Non Resident External) accounts. The first is that FCNR deposits are held in a foreign currency, while NRE deposits can be held in either Indian rupees or a foreign currency. The second difference is that FCNR deposits offer a fixed rate of interest, while NRE deposits offer a variable rate of interest which can change over time. Finally, FCNR deposits are subject to taxation in the country where they are held, while NRE deposits are not taxed.

What is FCNR?

FCNR stands for Foreign Currency Non-Resident. It is a type of bank account that allows you to save in a foreign currency. The FCNR account is denominated in USD, GBP, EUR, CAD, AUD, and JPY. The FCNR account can be opened by NRIs and PIOs. FCNR deposits are protected from exchange rate fluctuation as they are held in a foreign currency. FCNR deposits will earn higher interest rates than resident deposits in India. FCNR deposits are also FCRA compliant. FCNR deposits can be used to purchase property in India.

What is NRE?

NRE currency account is a savings account maintained in foreign currency by NRI . NRI’s can freely remit funds from their NRE account to their overseas bank account. The main purpose of NRE account is to encourage NRI’s to bring their foreign earnings into India. NRE accounts can be opened with any scheduled bank in India. The NRE account holder is not subject to RBI regulations on interest rates. NRE deposits are also exempt from income tax. NRI’s can use their NRE account to make investments in India. NRE accounts can be used to purchase property, shares and other assets in India. NRI’s can also use their NRE account to make loan payments in India.

Difference between FCNR and NRE

FCNR and NRE are both types of foreign currency accounts that can be beneficial for individuals who want to invest their money overseas. FCNR accounts are only available to Indian citizens, while NRE accounts can be opened by anyone. FCNR accounts offer higher interest rates than NRE accounts, but they also come with the risk of being subject to currency fluctuations.

NRE accounts are not subject to any currency fluctuations, but they may have lower interest rates. When deciding which type of account to open, individuals should consider their investment goals and risk tolerance.


If you’re still unsure about the difference between FCNR and NRE accounts, don’t worry. The table below should clear things up for you. Keep in mind that there are other factors to consider when choosing an account type, so be sure to speak with a banker or financial advisor before making a decision.

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