NRE and NRO accounts both hold funds in rupees, which means both carry rupee exchange-rate exposure even when the underlying money originated abroad. FCNR (Foreign Currency Non-Resident) deposits are structured differently on purpose: the deposit is held, and earns interest, in a foreign currency — commonly USD, GBP, EUR, JPY, or CAD — with no conversion to rupees at any point in the deposit's life.
What makes it different
Because the principal never becomes rupees, an FCNR deposit isn't affected by rupee depreciation or appreciation the way an NRE fixed deposit is — you get back the same foreign-currency amount plus interest, regardless of what the exchange rate did in between. The trade-off is structural: FCNR accounts are term deposits only (no savings-account version), with a minimum tenure of one year, so this isn't a place to park funds you might need to move on short notice.
Tax and repatriation
FCNR interest is tax-exempt in India, with no TDS withheld — the same treatment as NRE interest — and both the principal and accrued interest are freely repatriable, without the annual ceiling that applies to NRO funds.
The NRE vs. NRO chooser on this site's NRE/NRO & TDS page focuses on the two rupee-denominated account types; if currency risk on the principal itself is your main concern rather than just repatriability, FCNR is the option worth asking your bank's NRI desk about directly, since exact currency options and rates vary by bank.