You may still hold an Indian account you stopped using, or closed before you moved. Yes, it can still go on your FBAR: a dormant account counts for any year it held money, and a closed one counts for the year it was open. Closing it doesn't erase that year.
How a dormant bank account counts on your FBAR
Dormant is a bank's label, not a tax status. The RBI treats a savings or current account as inoperative when it has no customer-induced transactions for over two years, and bank-induced entries such as interest and charges don't count as activity.
The account is still yours, so you still hold the financial interest that the FBAR (FinCEN Form 114) is built around. The same RBI instructions say interest on a savings account keeps being credited whether or not you touch it, so the balance you remember may not be the balance you have.
An NRE account left untouched after a move to India is one version of this. FEMA expects you to convert an NRE account to a resident or NRO account within a reasonable time after you become resident, and a dormant NRE account may be one where nobody did.
The $10,000 test uses the highest balance
You file an FBAR when the combined value of your foreign accounts exceeded $10,000 at any time during the calendar year, according to the IRS FBAR rules.
Each account is valued separately at its maximum, which FinCEN defines as a reasonable approximation of the greatest value during the year. The FBAR threshold is a total, so a small account can be the one that tips it.
Say Priya held three Indian accounts during the calendar year:
- A dormant NRO savings account with a highest balance of $6,500.
- An NRE savings account with a highest balance of $3,200.
- An old salary account she closed in March, highest balance $2,100.
The total is $11,800, so Priya files and lists all three. Without the closed account the total is $9,700 and she wouldn't have to file at all.
What happens to a closed bank account on your FBAR
Does the FBAR apply to a closed account?
Yes, for the year it was open. The reporting rule covers foreign financial accounts "maintained during the previous calendar year" (31 CFR 1010.306(c)), and an account you closed in March was maintained that year.
It stops appearing in the first calendar year you held no interest in it. FinCEN's rule asks for a report for each year in which the relationship exists, so a closed account is a past-year item, never a current one.
Form 8938 works the same way. The IRS instructions have you mark an account closed during the year and report its maximum value for the year, converted at the rate for the last day of the tax year.
Closing it won't fix a missed year
Closing an account doesn't cancel an FBAR you should have filed while it was open. You can still file a late report. The IRS can assess a civil FBAR penalty only within six years of the due date (31 USC 5321(b)(1)), but that limit applies to the penalty and not to filing.
The non-willful maximum was $16,536 per unfiled report for penalties assessed on or after January 17, 2025 (31 CFR 1010.821). The late FBAR options depend on how many years are missing and whether the omission was willful.
Zero-balance accounts and the FBAR
An account that held exactly $0 all year adds $0 to the test, so it can't trigger the FBAR by itself. That's narrower than it sounds.
Three cases still count, because each held a positive balance at some point and that peak is what counts:
- A savings account earning interest.
- A balance parked behind an expired KYC.
- An account you emptied in January.
If you do file, I'd list the zero-balance account too. FinCEN's instructions tell you to enter zero when an account's value comes out negative, so zero is an accepted entry, and an omitted account is the version that can draw a penalty.
Schedule B of Form 1040 asks, in Part III, whether at any time during the year you had a financial interest in or signature authority over a foreign account.
You answer it even if you aren't required to file FinCEN Form 114. A zero-balance NRO account you still hold is a yes on your return regardless of the FBAR.
How to check your own accounts
Run this once for each calendar year, with the statements in front of you.
- List every Indian account you held at any point in the calendar year, closed and dormant ones included. Each fixed deposit with its own deposit number is its own account.
- Find each account's highest balance between 1 January and 31 December.
- Convert each to dollars at the Treasury rate for the last day of the calendar year, rounded up to the next whole dollar.
- Add them. If the total is over $10,000, you file an FBAR by April 15, with an automatic extension to October 15.
- Keep your records for five years from the due date of the FBAR.
Pull your statements this week
Start with the January to December statements for every Indian account you held in the year, closed ones included, and total the highest balances. If one account is frozen and its numbers are out of reach, I'd file with a documented approximation rather than leave it off.
InvestMates can review the account list with you before you file.
Frequently asked questions
How do I activate my NRI dormant account?
Update your KYC with the bank. The RBI's instructions require banks to offer KYC updation for activating inoperative accounts at all branches, and Video-KYC if you ask and the bank supports it. Once active, it works like any other NRO account again.
What happens if a bank account is inactive for 2 years?
The RBI treats a savings or current account as inoperative once it has no customer-induced transactions for over two years. Interest and bank charges don't count as activity. The account is still yours, and it still counts on your FBAR for any year it held a balance.
Does Form 8938 also cover a dormant or closed Indian bank account?
Yes, once you cross the Form 8938 threshold. For a single filer living in the US that's more than $50,000 at year end or $75,000 at any time, and $100,000 and $150,000 for a joint return.
A closed account counts because assets held at any time during the year count toward the threshold. The FBAR vs FATCA guide shows where each form applies.
Which balance goes on my FBAR for an Indian bank account, the 31 March balance or the highest balance in the year?
The highest balance between 1 January and 31 December. The FBAR covers a calendar year (31 CFR 1010.306(c)), and 31 March is the Indian financial year end, which has no bearing on it.
What if I can't get statements for a frozen or inoperative Indian bank account?
Use a reasonable approximation of the highest balance. FinCEN defines maximum value that way and allows periodic statements that fairly reflect it. Ask the bank for statements, which may mean updating your KYC first, and keep whatever you receive for five years.