Resident Foreign Currency account – they are bank accounts that can be maintained by resident Indians in foreign currency.
RFC accounts are helpful for NRIs as NRIs might have money in foreign currency in bank accounts abroad that they would like to bring to India.
Check – NRE FD after Return to India
Resident Foreign Currency Account – RFC Account
- An RFC Saving account in India can be opened when an individual returns to India after residing abroad for a year or more.
- Resident Foreign Currency accounts can be opened in any of the banks in India such as ICICI Bank, Yes Bank, Axis Bank, SBI, etc.
- An RFC Bank accounts can be a current account, a Resident Foreign Currency savings account, or a fixed deposit account.
- The amount deposited in the account should be in any freely convertible foreign currency i.e. foreign currencies that can be exchanged easily with other currencies such as US Dollar, GB Pound, Japanese Yen, Euro, etc. The foreign currency accepted depends on the banks. For example, ICICI bank allows opening accounts in GB Pound and US Dollars. SBI allows the opening of RFC saving accounts in USD, Euro, and GB Pound.
- The account can be opened under a single name or jointly with eligible returning NRI or a resident relative. A resident relative includes the following – spouse, mother, father, step-parents, son, daughter, stepchildren, daughter-in-law, son-in-law, brother, sister, step-brother, and step-sister. But resident relatives cannot operate the account.
- Amount deposited can include –
- Foreign exchange earnings via profession, business, or employment abroad and money present in overseas bank accounts
- Pension received abroad.
- Interest and Dividend earned abroad
- Gifts received in monetary form or
- Funds from the sale of assets.
- Money can be transferred from an NRE account to an RFC accounts too.
- Funds from the RFC Saving account can be transferred abroad for bonafide purposes. It can also be transferred to NRE/FCNR accounts in case the individual becomes an NRI again. Cash can be withdrawn in India as well. You will get the amount after conversion to Indian Rupees based on the prevailing exchange rate.
- A nomination facility is also available.
“Funds from the RFC account can be transferred abroad for bonafide purposes. It can also be transferred to NRE/FCNR accounts in case the individual becomes an NRI again.” wiseNRI
RFC Saving Account Interest Rate
Interest is credited quarterly. Interest rates are decided by the banks based on tenure and currency.
Foreign currency nonresident account (Savings) interest is negligible – around .01%
RFC Fixed Deposit Rates
|< 29 Days||0.01%||0.01%||0.01%||0.01%|
|30 days – 3 Months||0.01%||0.01%||0.01%||0.01%|
|3 Months 1 day – 6 Months||0.01%||0.01%||0.01%||0.01%|
|6 Months 1 day – < 1 Year||0.01%||0.01%||0.01%||0.01%|
|1 year – < 2 years||0.01%||0.01%||0.01%||0.01%|
|2 years – < 3 years||0.01%||0.01%||0.01%||0.01%|
|3 years only||0.01%||0.01%||0.01%||0.01%|
Source: HDFC Bank
Read – What is RNOR?
RFC Domestic Account
There is some difference between the RFC Saving account and the RFC (D) accounts.
An RFC (D) account is a Resident Foreign Currency (Domestic) account. The differences are that the RFC (D) account can only be a current account and it does not earn any interest. Funds from NRE accounts cannot be transferred to an RFC account(D).
The account can be opened by completing the application form along with a self-attested passport copy, copy of work visa or work permit that the NRI had while being abroad, and Indian address proof.
RFC account is useful for a returning NRI. The amount can be used in India as well as used for remitting money abroad in case there are any transactions to be done. If the amount is to be received and the foreign bank accounts are closed, money can be remitted to this account. It helps to complete unfinished financial matters smoothly.
This post is written by Vidya – she is an NRI.
If you have any questions regarding the Resident Foreign Currency account or you would like to share your experience – use the comment section.
Q1. What is a resident foreign currency account?
Ans. Resident Foreign Currency accounts – They’re bank accounts that can be maintained by resident Indians in foreign currency. These accounts are helpful for NRIs as they might want to bring money from abroad to India.
Q2.What are the benefits of opening an RFC account?
Ans. RFC Account helps you with the saving of foreign currency and provides tax exemption on the interest that accrues when you declare the status of a Resident-Not-Ordinarily-Resident. You can also repatriate funds via RFC Account for a bonafide purpose
Q3. What is an RFC Fixed Deposit?
Ans. RFC Fixed Deposit is a great opportunity for the Non-resident Indian who had returned to India to earn high returns on the funds which he holds in foreign currency. It is a type of deposit that can be held for a maximum of 3 years.