FCNR (Foreign Currency Non Resident) account is fixed deposit account offered by banks in India to non resident Indians (NRIs) and is operated in foreign currency. FCNR deposits are good investment option for NRIs in Hong Kong as the interest rate offered by banks in India are way higher than that offered by banks in Hong Kong.
For instance one of the biggest bank HSBC Bank, Hong Kong have interest rate in the range of 0.4% to 0.45% for one year deposit. There is NO option for longer tenure deposits. In comparison ICICI Bank offers 2.19% for 1 year deposit and 2.02% for 5 year term.
The second advantage is Hong Kong taxes only income generated in the country and not worldwide income. Hence for NRIs in Hong Kong the interest earned on FCNR deposit is tax free as its neither taxed in India nor in Hong Kong!
The third benefit is the principal and interest earned is fully repatriable, which means NRIs can transfer their money back without much formalities.
Also Read: Best NRE Fixed Deposit Interest Rates
The fourth advantage is the investor has NO currency exchange risk as you deposit in foreign currency, the interest earned is in foreign currency and when you withdraw you get back the amount in currency in which the deposit was made.
This post compares the interest rate offered on HKD (Hong Kong Dollar) FCNR Deposits.
Hong Kong Dollar (HKD) FCNR Deposit Rates:
The table below compares the interest rates offered on HKD FCNR deposits across various tenures. The highest FCNR rates have been highlighted. Also We have HSBC Bank Hong Kong as benchmark for comparison.
As can be seen ICICI Bank, Federal Bank, Karnataka Bank and IDBI Bank pays highest interest on FCNR deposits in Hong Kong Dollars.
| Banks | 1 Year | 2 Years | 3 Years | 4 Years | 5 Years |
| Federal Bank | 2.99% | 2.77% | 2.74% | 2.73% | 2.62% |
| ICICI Bank | 2.19% | 2.07% | 2.04% | 2.03% | 2.02% |
| IDBI Bank | 2.76% | 2.41% | 2.49% | 2.48% | 2.46% |
| Karnataka Bank | 2.84% | 2.72% | 2.79% | 2.78% | 2.77% |
| UCO Bank | 2.95% | 2.75% | 2.65% | 2.60% | 2.58% |
| Yes Bank | 2.55% | 2.35% | 2.00% | 2.00% | 2.00% |
| HSBC Hong Kong | 0.40% | x | x | x | x |
Also Read: NRE Vs NRO – Which is the right account for NRIs?
FCNR Account Rules:
The minimum deposit tenure for FCNR FD is 1 year and maximum tenure is 5 years.
The interest is compounded half-yearly.
In most cases there is NO penalty for pre-mature closure of FCNR deposit account. However in case of premature closure before completion of 1 year, no interest would be paid.
very good article. Thanks for this.