FCNR(B) FD Early Exit: What Your Bank Charges?

NRIs who break their FCNR(B) fixed deposit before maturity face penalties ranging from zero interest to heavy deductions. Rules vary widely across HDFC Bank, SBI, ICICI Bank, Axis Bank, and Kotak. Know the rules before you act.

Here's what happened: FCNR(B) deposits held in foreign currency for 1–5 years carry premature withdrawal penalties that vary significantly across major Indian banks including SBI, HDFC Bank, ICICI Bank, Axis Bank, and Kotak Mahindra Bank.. Withdrawing an FCNR(B) FD before completing one full year typically means forfeiting all interest earned — only the original principal in foreign currency is returned to the depositor.. Beyond the one-year mark, banks generally apply a penalty of 0.50%–1% on the interest rate applicable for the period actually held, reducing the effective return on the deposit..

What you should do: Call your bank's NRI helpline before initiating any premature closure and request the exact penalty-adjusted interest rate in writing so you can calculate your actual loss.. Consider taking a loan against your FCNR(B) FD instead of breaking it — most banks offer up to 90% of deposit value as a loan, letting you access funds while your FD keeps earning full interest.. Compare the net post-penalty interest you will receive against current FCNR(B) renewal rates — if rates have risen significantly, it may make sense to break and rebook at the higher rate even after absorbing the penalty..

FCNR(B) deposits are fully repatriable — both principal and interest can be sent back abroad freely. Never break the FD if you only need temporary liquidity; a loan against FD costs far less than losing months of foreign-currency interest.