Indian Overseas Bank FCNR Deposit: A Comprehensive Guide

IOB FCNR Deposits: A Secure Investment Avenue for NRIs with Competitive Returns
October 16, 2023
min read


Foreign Currency Non-Resident (FCNR) accounts have emerged as a preferred choice for Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs) looking to maintain their savings in foreign currency, safeguarding them from currency fluctuations. The Indian Overseas Bank (IOB), with its rich legacy and commitment to customer-centric services, offers a robust IOB Bank FCNR account tailored to meet the unique financial needs of the global Indian diaspora. This article delves deep into the features, benefits, and specifics of the FCNR deposit scheme offered by IOB.

Eligibility Criteria for IOB FCNR Deposits

The IOB Bank FCNR account is exclusively designed for the global Indian community, ensuring they can seamlessly manage their finances across borders. Here's a detailed look at the eligibility criteria:

  • Primary Eligibility: The FCNR account can be opened by both Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs). This ensures that individuals who have their roots in India but are residing abroad, either for employment, business, or other reasons, can avail the benefits of this account.
  • Joint Accounts: One of the standout features of the IOB FCNR deposit scheme is the flexibility it offers in terms of account operation. NRIs and PIOs can open these accounts jointly with their resident close relatives. This provision not only provides an added layer of convenience but also ensures that the resident relative can manage the account in the absence of the primary account holder.

By understanding the eligibility criteria, potential account holders can ensure a smooth and hassle-free account opening process, leveraging the myriad benefits that come with the IOB Bank FCNR account.

Features and Benefits of IOB FCNR Deposits

The IOB Bank FCNR account is not just another foreign currency account; it's a comprehensive financial solution packed with features that cater to the diverse needs of NRIs and PIOs. Let's delve into the salient features and benefits of this account:

  • Currency Options: IOB offers a wide array of currency options for its FCNR deposits. Account holders can choose from USD, GBP, EUR, JPY, CAD, AUD, NZD, CHF, and SGD. This multi-currency feature ensures that individuals can select a currency that aligns with their financial goals and requirements.
  • Attractive Interest Rates: One of the primary reasons for the popularity of the IOB FCNR rates is the competitive interest offered on these deposits. The rates vary based on the currency and tenure of the deposit, ensuring that account holders get the best returns on their savings.
  • Flexible Tenure: The deposit tenure ranges from a minimum of 1 year to a maximum of 5 years, providing flexibility to the depositors to choose a period that aligns with their financial planning.
  • Repatriation Benefits: The maturity proceeds, inclusive of the interest earned, are fully repatriable. This means that account holders can effortlessly transfer their funds abroad, ensuring liquidity and ease of access to their savings.
  • Protection Against Currency Fluctuation: By maintaining their savings in a foreign currency, account holders are insulated from the volatility of the Indian Rupee, safeguarding their capital against potential currency risks.
  • Loan Facility: IOB offers a loan facility against FCNR deposits. Account holders can avail loans in Indian rupees up to 75% of the deposit amount and accrued interest, ensuring they have access to funds when needed.
  • Automatic Renewal: For those who prefer a hands-off approach to their savings, IOB offers an automatic renewal feature for the FCNR deposits. This ensures that the deposit continues to earn interest without any intervention from the account holder.

IOB FCNR Interest Rates 2023

Understanding the interest rates is crucial for any depositor. The IOB Bank FCNR rates 2023 are designed to offer competitive returns to the depositors. Here's a comprehensive breakdown of the interest rates based on different currencies and tenures:


It's essential to note that the interest rates are subject to change based on the guidelines issued by the Reserve Bank of India. Moreover, the rates might vary based on the deposit amount, with different rates applicable for deposits exceeding certain thresholds.

How IOB FCNR Deposits Work: An Illustrative Example

To better understand the benefits and workings of the IOB Bank FCNR account, let's consider a hypothetical scenario:

Mr. Rajan, an NRI residing in the USA, wants to invest his savings in a secure financial instrument that offers attractive returns without exposing him to currency fluctuation risks. After researching various options, he decides to open an IOB FCNR deposit account.

He chooses to deposit USD 10,000 for a tenure of 3 years. Given the interest rate of 3.15% for this tenure, at the end of 3 years, his maturity amount would be:

Principal Amount: USD 10,000 Interest Rate: 3.15% compounded half-yearly Tenure: 3 years

Using the compound interest formula, the maturity amount = USD 10,000 x (1 + 3.15/200)^(2 x 3) = USD 10,955.47 approximately.

So, after 3 years, Mr. Rajan would receive around USD 10,955.47. This amount is fully repatriable, meaning he can transfer it back to the USA without any hassles. Moreover, since the deposit is in USD, he doesn't have to worry about currency fluctuations affecting his returns.

This example illustrates the dual benefits of the IOB FCNR deposit – attractive returns and protection against currency risks.

IOB FCNR deposit scheme stands out as a reliable and attractive investment option for NRIs and PIOs. With its competitive interest rates, protection against currency fluctuations, and the trustworthiness of Indian Overseas Bank, it's a compelling choice for those looking to maximize their returns while enjoying the benefits of repatriability and tax exemptions. Whether you're an NRI seeking a stable investment avenue or someone looking to leverage the benefits of foreign currency deposits, the IOB Bank FCNR account is worth considering.


What is the primary advantage of the IOB FCNR deposit?

IOB FCNR deposit offers NRIs the opportunity to earn interest on their foreign currency without the risk of currency fluctuations, ensuring the principal and interest remain stable.

Can residents of India open an IOB FCNR account?

No, only non-resident Indians (NRIs) and persons of Indian origin (PIOs) can open an IOB FCNR account.

Is the interest earned on IOB FCNR deposits taxable in India?

No, the interest income from IOB FCNR deposits is exempt from Income Tax in India.

Can I avail a loan against my IOB FCNR deposit?

Yes, loans can be availed against IOB FCNR deposits in Indian rupees up to 75% of the deposit amount and accrued interest or up to one crore rupees, whichever is lower.

What happens if I close my IOB FCNR deposit before one year?

If an IOB FCNR deposit is closed prematurely before one year, no interest will be paid on the deposit.

Are there any charges for premature closure of large deposits?

Yes, swap charges will be levied for the premature closure of large deposits.

How often is the interest compounded for IOB FCNR deposits?

For deposits with a tenure beyond one year, the interest is compounded at half-yearly intervals.

Can I open a joint IOB FCNR account with a resident relative?

Yes, IOB FCNR accounts can be opened jointly with resident close relatives.

What is the minimum deposit amount for IOB FCNR accounts?

The minimum deposit amount varies based on the currency, with most currencies requiring a minimum of 1000 units, except for JPY, which requires 100,000 units.

How can I open an IOB FCNR account?

To open an IOB FCNR account, you can download the account opening form from the IOB website, complete it, and submit it along with the required documents to a designated IOB branch.

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