Non-resident Indians (NRIs) and Overseas Citizens of India (OCIs) have the option of investing in Foreign Currency Non-Resident- FCNR(B)- and Non-Resident External Account (NRE) products such as fixed deposits (FDs) to generate a stable income from India. Both FCNR(B) and NRE FDs come with varied interest rates for different tenures, are tax-exempt and can be fully repatriated without any limits set by the Reserve Bank of India (RBI). However, they do have key differences.
In an FCNR (B) FD, an NRI can invest in foreign currencies like the US dollar or British Pound; while NRE FDs are denominated in Indian rupees. The compounding frequency for an FCNR(B) FD is every six months, whereas NRE FDs compound quarterly.
