Why is an FCNR deposit useful for an NRI worried about the rupee?

An FCNR (Foreign Currency Non-Resident) deposit lets you hold money at an Indian bank denominated in a foreign currency — US dollars, pounds, euros — as a fixed-term deposit, so the rupee's exchange rate doesn't erode that balance. For an NRI who wants Indian-bank convenience or a relationship there but plans to spend in dollars, it removes the currency mismatch that plagues NRE rupee deposits. FCNR funds are also fully repatriable, with no $1 million cap. The trade-offs: foreign-currency deposit rates are usually lower than rupee rates, and as a US tax resident the interest is still fully taxable on your US return and the account is FBAR-reportable. FCNR is best thought of as a safe parking spot for dollars you may need in India, not as a growth investment. Match it to a real near-term purpose.