Finance & Taxes
FCNR vs HYSA: After-Tax Returns Calculator
Compare FCNR fixed deposit returns vs a US High-Yield Savings Account or CD after US income tax. See net returns, tax impact, and a 10-year compounding chart.
Educational estimate only. Not legal, tax, immigration, or financial advice. Full disclaimer below.
Your details
Fixed deposit at an Indian bank · rate not entered · Indian-tax exempt while NRI/RNOR
Estimated value at maturity
$25,000
High-yield savings or CD at a US bank · rate not entered
Estimated value at maturity
$25,000
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10-Year Compounding Growth
FCNR deposits and US HYSAs or CDs can both hold USD, but their tax treatment differs: FCNR interest is exempt from Indian tax but fully taxable on a US federal return. Enter current FCNR and HYSA rates plus your US marginal tax bracket to compare net after-tax returns over 1–5 years, with a compounding chart.
- Who this is for
- NRIs holding USD savings who are comparing FCNR fixed deposits at Indian banks versus US high-yield savings accounts or CDs
- Timeline / decision window
- FCNR deposits lock in for a fixed tenure (often 1–5 years); HYSA balances stay liquid. Match the choice to when you'll actually need the money and to your return-to-India plans.
What you'll need for the calculator
- The FCNR deposit rate and tenure offered by the Indian bank
- The US high-yield savings / CD rate
- Your US marginal (federal) tax bracket
- How long you plan to keep the money invested
- Whether you'll need the money in USD in the US or plan to return to India
Numbers shown are estimates. Tax rates, fees, thresholds, and treaty rules change and depend on your visa status, state, and individual circumstances — verify with a qualified professional before acting.
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After the calculator
What your result means
The calculator compares the net, after-US-tax return of an FCNR deposit against a US HYSA or CD over your chosen horizon, with a compounding view. A higher FCNR headline rate doesn't automatically win — for a US tax resident, FCNR interest is still US-taxable, so the comparison usually comes down to the rate gap, liquidity needs, and whether you're staying in the US or returning to India.
FCNR and HYSA, side by side
FCNR basics
A Foreign Currency Non-Resident (FCNR) deposit lets an NRI hold a fixed deposit in a foreign currency (like USD) at an Indian bank. There's no rupee conversion, so you avoid INR/USD currency risk on the principal. The interest is exempt from Indian income tax while you are a non-resident (NRI) or Resident but Not Ordinarily Resident (RNOR); once you become Resident and Ordinarily Resident (ROR), the interest becomes taxable in India. FCNR is a FEMA deposit category — that governs eligibility and repatriation, not the income-tax exemption, which is a separate income-tax provision.
HYSA basics
A US high-yield savings account (or CD) holds USD at a US bank, typically FDIC-insured, and stays liquid (a CD locks for a term). The interest is fully taxable on your US federal return.
Currency risk
Both hold USD, so neither carries INR conversion risk while the money stays in dollars. The difference is where the money sits and how it's taxed and insured — not the currency itself.
Tax treatment
FCNR interest is exempt from Indian tax for NRIs but is still reportable and taxable on a US return if you're a US tax resident. HYSA interest is taxable in the US. So for a US-resident NRI, both are usually US-taxable — the FCNR's India exemption mainly helps once you're back in India.
Deposit insurance & repatriation
HYSA balances are typically FDIC-insured up to the limit. FCNR deposits sit at an Indian bank (covered by Indian deposit rules) and are fully repatriable, principal and interest, back to the US.
FCNR vs HYSA at a glance
| Factor | FCNR deposit | US HYSA / CD |
|---|---|---|
| Currency | USD (or other forex) at an Indian bank | USD at a US bank |
| Tax angle | India-tax-exempt for NRIs; US-taxable if US resident | US-taxable interest |
| Liquidity | Locked for a fixed tenure (often 1–5 yrs) | HYSA fully liquid; CD locked for term |
| Deposit insurance | Indian bank deposit rules | FDIC-insured up to the limit |
| Repatriation | Fully repatriable to the US | Already in the US |
| Best for | NRIs holding USD who may return to India | Money staying in the US, needed liquid |
Tax consequences
US tax (if you're a US resident)
Interest from both FCNR and HYSA is generally taxable on your US federal return while you're a US tax resident. The FCNR's Indian exemption doesn't change US taxability.
India tax
FCNR interest is exempt from Indian tax for NRIs, which becomes valuable if you return to India while the deposit is still running. HYSA interest has no India angle unless you're India-resident and it becomes worldwide income.
Reporting
FCNR accounts at Indian banks are foreign financial accounts for a US person — factor in FBAR/FATCA reporting thresholds. HYSA at a US bank has no such foreign-account reporting.
Step-by-step process
- 1Get the current FCNR rate and tenure from the Indian bank and the best US HYSA/CD rate.
- 2Note your US marginal tax bracket — both interest streams are usually US-taxable.
- 3Decide your horizon and whether you need the money liquid or can lock it in.
- 4Run the comparison to see net after-tax returns side by side.
- 5Factor in FBAR/FATCA reporting if you open or hold an FCNR account.
- 6Revisit when rates reset or your return-to-India timeline changes.
Common mistakes to avoid
- Comparing headline rates without adjusting FCNR interest for US tax while you're still a US resident.
- Locking money into a multi-year FCNR when you'll need it liquid in the US.
- Forgetting FBAR/FATCA reporting on the Indian FCNR account.
- Assuming FCNR carries currency risk — the principal stays in USD, so it doesn't while in dollars.
- Ignoring early-withdrawal penalties on CDs or FCNR deposits when you break the term.
Example scenario
NRI choosing where to park $50,000 in USD savings
Sanjay, on an H-1B and a US tax resident, has $50,000 he won't need for three years. An Indian bank offers an FCNR USD deposit at a slightly higher rate than his US HYSA. But because he's a US tax resident, the FCNR interest is still taxable on his US return, so the after-tax edge shrinks — and the FCNR locks the money for the term and adds FBAR reporting. Since he wants flexibility and is staying in the US for now, the HYSA is the simpler fit. If he were about to move back to India, the FCNR's India-tax exemption and full repatriability would tilt the other way.
Related tools & guides
Frequently asked questions
Is FCNR better than HYSA?
It depends. FCNR can suit NRIs who want to hold USD at an Indian bank and may return to India (its interest is India-tax-exempt and fully repatriable). A HYSA is simpler and liquid for money staying in the US. For a US tax resident, both interest streams are usually US-taxable, so the decision often comes down to the rate gap and liquidity.
Is FCNR interest taxable in India?
FCNR interest is exempt from Indian income tax while you qualify as a non-resident (NRI) or as Resident but Not Ordinarily Resident (RNOR) — so the exemption continues through the RNOR window after you return. It ends once you become Resident and Ordinarily Resident (ROR), at which point the interest is taxable in India. The exemption is an income-tax provision; do not confuse it with FEMA, which governs the deposit's eligibility and repatriation.
Is HYSA interest taxable for NRIs?
If you're a US tax resident, HYSA interest is taxable on your US federal return. If you're a non-resident who is no longer a US tax resident, US bank interest is often exempt from US tax — but check your specific status.
Can I move money from a US bank to an FCNR deposit?
Yes. You can remit USD from a US bank into an FCNR deposit at an Indian bank without converting to rupees. Keep in mind the transfer costs and any reporting, and that the FCNR then becomes a foreign account for FBAR/FATCA purposes.
Does FCNR avoid currency risk?
For the principal, yes — an FCNR deposit is held in foreign currency (like USD), so you don't take on INR/USD conversion risk while the money stays in dollars. You only face currency conversion if and when you convert to rupees.
Should returning Indians keep money in the US or India?
It depends on when you'll need it and in which currency. FCNR deposits let returning NRIs keep USD at an Indian bank with India-tax-exempt interest and full repatriability, while a US HYSA keeps money liquid in the US. Many people split across both based on their timeline.
Reviewed for 2026 · data last checked . Source: IRS Publication 550 (investment income); FEMA 1999 (FCNR account rules); RBI Master Circular on NRI accounts. Figures are estimates and may change — verify before acting.
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Disclaimer, assumptions & sources
This tool is for general education and planning only. It does not replace advice from a CPA, attorney, financial advisor, USCIS, IRS, State Department, or other official source. Rules, limits, forms, fees, dates, and government processing information may change. Always verify before filing, investing, or making immigration, tax, or financial decisions.
- For educational use only — not legal advice.
- Not tax advice.
- Not financial advice.
- Not immigration advice.
- Numbers, forms, fees, dates, rules, and limits may change at any time.
- Always verify with official sources before acting.
- Consult a CPA, attorney, financial advisor, or the relevant official agency (USCIS, IRS, State Department) when it matters to your situation.
This calculator provides general estimates and is not financial, tax, legal, or immigration advice. Rules change and vary by state, visa status, and individual circumstance. Consult a qualified professional before acting.
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