FBAR and Your Indian Bank Accounts
The savings account you left open in India is a foreign financial account. So is the NRE deposit, the PPF, and the demat account you have not logged into since 2019. Here is exactly what has to be reported, and what does not.
The short answer
If you are a US citizen or resident alien and the combined highest value of all your foreign financial accounts topped $10,000 at any point in the calendar year, you must file an FBAR — FinCEN Form 114 — electronically with FinCEN. It is not part of your tax return. The threshold is on the total across all accounts, not on each one, and it applies whether or not the accounts produced any income.
Who actually has to file
The obligation falls on a United States person, which includes citizens, green card holders and anyone who is a resident alien for the year under the substantial presence test. Your visa category is not the test. Someone on an H-1B who has been in the US all year is normally a resident alien and is treated identically to a citizen here.
There is a real carve-out that this audience should know about, and it is routinely missed in both directions. F-1 and J-1 students are generally exempt individuals under the substantial presence test for a period of years, so their days in the US do not count toward residency. During that period they are nonresident aliens, and a nonresident alien has no FBAR obligation at all. Plenty of students file one unnecessarily; plenty of former students fail to start filing once the exempt period ends or they move to an H-1B.
If you are unsure which side of that line you fall on, the residency test is mechanical and you can work it out — our substantial presence test calculator applies the day-counting rules including the exempt individual treatment.
Which Indian accounts count
A foreign financial account is broader than most people assume. It is not limited to bank accounts, and it does not depend on the account earning anything or on you having moved money in or out during the year.
| Account or asset | Reportable | Notes |
|---|---|---|
| Resident savings or current account | Yes | An account you kept open after moving to the US is still a foreign financial account. This is the single most commonly missed one. |
| NRE account | Yes | Non-Resident External accounts are reportable. That the interest is exempt from Indian tax has no bearing on the US reporting obligation. |
| NRO account | Yes | Non-Resident Ordinary accounts are reportable, and the interest is also generally taxable US income, unlike the Indian treatment. |
| FCNR deposit | Yes | Foreign Currency Non-Resident deposits are foreign financial accounts even though they are denominated in dollars. |
| Fixed deposit | Yes | Held at a financial institution outside the US, so it counts. Use the highest balance during the year, including accrued interest. |
| PPF account | Yes | A Public Provident Fund account is held at a financial institution and is reportable. Whether the annual accretion is currently taxable is a separate and contested question — see below. |
| EPF balance | Generally yes | Treated as a foreign financial account in most analyses. Employer-administered arrangements vary, so this is one to review rather than assume. |
| Demat account | Yes | A securities account held outside the US. Report the account, not each holding. |
| Indian mutual funds | Yes | Reportable where held through an account. These usually also raise a PFIC question on the return itself, which is a much larger issue than the FBAR. |
| LIC or other policy with cash value | Usually | An insurance or annuity policy with a cash surrender value is reportable. Pure term cover with no cash value is not. |
| Real estate held directly | No | Property is not a financial account. An account holding rent from it is, and the rental income is reportable on the return. |
| Physical gold or jewellery | No | Held directly it is not a financial account. Held in a custodial or depository account, the account is reportable. |
Reporting an account is not the same as taxing its income. PPF and EPF are reportable, but whether the annual accretion is currently taxable in the US is genuinely unsettled — the India-US treaty contains no article that plainly defers it, and practitioners take different positions. This page takes a view on reporting only. The income question needs advice on your specific facts.
How the $10,000 threshold actually works
Two things about the threshold catch people out, and both push in the direction of owing a filing you did not expect.
First, it is aggregate. You add the maximum value of every foreign financial account together. Four modest accounts can cross a line that none of them approaches alone.
Second, it is the highest value at any point in the year, not the closing balance. A fixed deposit that matured mid-year and was spent still counts at its peak. So does money that passed through an account briefly — a property sale, a gift, a maturing policy.
Worked example
An H-1B holder keeps four things in India: an old resident savings account peaking at about $2,000, an NRE account at $4,500, a fixed deposit at $3,200, and a demat account that touched $900.
No single account is close to $10,000. The aggregate is roughly $10,600, so the threshold is crossed and all four accounts are reported — including the $900 demat account. This is the ordinary case, not an edge case.
FBAR is not Form 8938
These are two different obligations that overlap heavily, and satisfying one does nothing for the other. Many people with Indian accounts owe both.
| FBAR (FinCEN 114) | Form 8938 (FATCA) | |
|---|---|---|
| Filed with | FinCEN, via BSA E-Filing | The IRS, attached to your return |
| Threshold | $10,000 aggregate, any point in the year | Higher, and varies by filing status and whether you live in the US |
| Covers | Foreign financial accounts | Specified foreign financial assets, a broader set |
| Signature authority alone | Reportable | Generally not, without a financial interest |
The IRS publishes a line-by-line comparison of the two, linked in the sources below. It is worth reading if you are close to either threshold.
Deadline, and what happens if you miss it
The FBAR is due April 15, with an automatic extension to October 15. The extension is genuinely automatic — there is no form to file and nothing to request, which differs from the extension for your tax return.
Penalties are tiered by whether the failure was non-willful or willful, and the willful ceiling is severe enough that the distinction matters more than any other fact in a late-filing case. The specific caps are adjusted for inflation annually, so we deliberately do not quote figures here that would go stale — the IRS FBAR page linked below carries the current ones.
One point of genuine relief: in Bittner v. United States (2023) the Supreme Court held that the non-willful penalty applies per report rather than per unreported account. Before that decision, someone with a dozen small Indian accounts faced a penalty multiplied by twelve.
If you have never filed one
This is the most common situation we see, and it is usually fixable. There are two formal routes, and which one applies turns on whether you also under-reported income:
- Delinquent FBAR Submission Procedures — for filers who reported all their income and simply did not know about the FBAR.
- Streamlined Filing Compliance Procedures — for non-willful failures that also involve unreported foreign income, such as NRO interest.
Both are formal programmes with eligibility conditions and required certifications. Entering the wrong one, or quietly filing late FBARs outside either, can make the position worse rather than better. Get the route decided before anything is submitted.
Where this comes from
Every statement on this page traces to a primary source — IRS guidance, FinCEN, the Treasury or the Supreme Court — rather than to secondary reporting. Check them yourself:
- IRS — Report of Foreign Bank and Financial Accounts (FBAR): who must file, thresholds and deadlines
- IRS FBAR Reference Guide — account types, financial interest and signature authority
- FinCEN BSA E-Filing System — where FinCEN Form 114 is actually filed
- IRS — Comparison of Form 8938 and FBAR requirements
- IRS Publication 519 — US Tax Guide for Aliens, including the substantial presence test and exempt individuals
- US Treasury Reporting Rates of Exchange — the rates to use for conversion
- IRS — Delinquent FBAR Submission Procedures
- IRS — Streamlined Filing Compliance Procedures
Reviewed by Teja K, CPA · last reviewed . This page is general information, not tax advice for your situation. FBAR outcomes turn on facts we cannot see from here.
Frequently Asked Questions
Do I have to file an FBAR if I am on an H-1B visa?
If you are a resident alien for the year — which an H-1B holder normally is under the substantial presence test — then yes, you are a United States person for FBAR purposes and the filing requirement applies exactly as it does to a citizen. The visa itself is not the test; your residency status for the year is.
I am an F-1 student. Do I need to file an FBAR?
Often not. The FBAR obligation applies to United States persons, which includes resident aliens but not nonresident aliens. F-1 and J-1 students are generally exempt individuals under the substantial presence test for a period of years, so their days in the US do not count toward residency and they are nonresident aliens. A nonresident alien has no FBAR obligation. Once you become a resident — commonly on switching to H-1B, or after the exempt period ends — the obligation begins.
My Indian accounts are small. Do they still count?
The threshold is on the combined total, not on any one account. If the aggregate highest value of all your foreign financial accounts exceeded $10,000 at any point during the calendar year, every one of those accounts is reported — including the ones holding a few hundred dollars. Four accounts of $3,000 each cross the threshold; none of them individually looks like it should.
Is my NRE interest reportable even though India does not tax it?
Yes. Indian tax treatment does not determine US reporting. NRE interest is exempt from Indian income tax, but the account is still a foreign financial account for FBAR purposes, and as a US resident you are taxed on worldwide income, so the interest is generally also reportable on your return.
I have signature authority on my parents' account in India but no money in it. Does that count?
Yes, that is reportable. The FBAR covers accounts you have a financial interest in and accounts over which you have signature or other authority, and they are separate tests. Being able to direct the disposition of funds is enough, even with no beneficial ownership. This catches a lot of people who were added to a parent's account for practical reasons.
Is the FBAR part of my tax return?
No. It is FinCEN Form 114, filed electronically with the Financial Crimes Enforcement Network through the BSA E-Filing System, not with the IRS and not attached to Form 1040. Filing your return does not file your FBAR, and a tax preparer who does not explicitly handle it has not filed it for you.
What is the difference between the FBAR and Form 8938?
They are separate requirements with separate thresholds and you can easily owe both for the same accounts. The FBAR goes to FinCEN with a $10,000 aggregate threshold. Form 8938 is a FATCA form filed with your tax return, with higher thresholds that vary by filing status and whether you live in the US, and it covers a broader set of specified foreign financial assets. Filing one does not satisfy the other.
I did not know about the FBAR and have never filed one. What now?
There are established routes back into compliance and which one fits depends on whether you also under-reported income and whether the failure was non-willful. The IRS has Delinquent FBAR Submission Procedures for filers who reported all their income but missed the FBAR, and the Streamlined Filing Compliance Procedures for non-willful failures involving unreported income. Both are formal programmes with conditions, and choosing the wrong one has consequences, so this is worth advice before filing anything.
What exchange rate do I use to convert rupees?
Convert the maximum value using the Treasury Reporting Rates of Exchange for December 31 of the year being reported, not the rate on the day the balance peaked and not a bank or aggregator rate. Report in US dollars.
Not sure whether you crossed the threshold?
Send us the account list and we will tell you whether an FBAR is due, whether Form 8938 is also in play, and what to do about any year you have already missed.