Holding Indian bank accounts, fixed deposits, or demat mutual fund investments while living in the United States triggers mandatory reporting obligations under the Bank Secrecy Act and the Foreign Account Tax Compliance Act.
1. FinCEN Form 114 (FBAR) Rules & Thresholds
You must file an FBAR electronically if the aggregate maximum value of all foreign financial accounts exceeds $10,000 at any point during the calendar year. This threshold is calculated by converting the peak balance of each account into USD using the Treasury Department's official year-end exchange rate.
2. What Accounts Must Be Reported?
- NRE & NRO Savings / Current Accounts: All balances must be reported.
- Fixed Deposits (FDs) & Recurring Deposits: Face value plus accrued interest.
- Public Provident Fund (PPF): Mandatory inclusion on FBAR and Form 8938.
- Indian Mutual Funds (PFICs): Subject to both FBAR and complex IRS Form 8621 Passive Foreign Investment Company rules.
3. IRS Form 8938 (FATCA) vs. FBAR
While FBAR is filed directly with the Financial Crimes Enforcement Network (FinCEN), Form 8938 is filed with your federal Form 1040 return. For single filers in the U.S., FATCA reporting begins at $50,000 on the last day of the year (or $75,000 peak); for married couples filing jointly, thresholds are $100,000 / $150,000.