FCNR (B) FD premature withdrawal rules explained

Foreign Currency Non-Resident (Bank) deposits, commonly known as FCNR (B) deposits, are a favored investment avenue for Non-resident Indians (NRIs) seeking to preserve their foreign earnings in a foreign currency while earning stable returns in India. However, withdrawing these deposits before maturity may incur penalties. The specific rules regarding premature withdrawal differ among various banks, including HDFC Bank, SBI, ICICI Bank, Axis Bank, and Kotak Mahindra Bank.

HDFC Bank imposes a 1-year lock-in period for FCNR (B) deposits booked between June 10, 2026, and September 30, 2026. Withdrawals before the 1-year mark will not yield any interest and will not incur penalties. For deposits with a maturity period beyond 5 years, SBI does not permit any premature withdrawals.

For ICICI Bank, FCNR (B) deposits with an original term of 12 months to 36 months will not yield any interest or incur penalties if withdrawn before the 12-month mark. If withdrawn after this period, interest will be paid at the rate applicable on the deposit booking date to the amount and period for which the deposit remained with the bank, without penalty.

FCNR (B) deposits with terms of 36 months to 60 months are subject to a 12-month lock-in period. Early withdrawal after this period will result in interest payment at the rate applicable on the deposit booking date, minus a 1% penalty.

Axis Bank follows a similar approach, wherein premature closure of FCNR (B) deposits before the completion of a 1-year minimum period results in no interest payment. However, if withdrawn after this 1-year mark, a 1% penalty applies to deposits exceeding USD 1 million. Bank of Baroda also imposes a 1-year lock-in period for FCNR (B) deposit customers, while other FCNR (B) deposits offer interest at a rate 1% lower than the actual rate for the held period, provided the deposit has run for a minimum of one year. Withdrawals within the first 12 months will not yield any interest.