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What Is RFC Account?

RFC Account is 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.

What Is RFC Account

Check – NRE FD after Return to India

Resident Foreign Currency Account – RFC

  • An RFC account can be opened when an individual returns to India after residing abroad for a year or more.
  • An RFC account can be opened in any of the banks in India such as ICICI Bank, Yes Bank, Axis Bank, SBI etc.
  • An RFC account can be a current account, 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 account 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 NRE account to RFC account too.
  • 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. Cash can be withdrawn in India as well. You will get the amount after conversion to Indian Rupees based on the prevailing exchange rate.
  • Nomination facility is also available for RFC account.

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 Account Interest Rate

Interest is credited quarterly. Interest rates are decided by the banks based on tenure and currency.

Foreign currency non resident account (Savings) interest is negligible – around .01%

Foreign currency non resident deposit (FD) interest rates

PeriodGBPUSDEUROJPY
< 29 Days0.01%0.01%0.01%0.01%
30 days – 3 Months0.01%0.01%0.01%0.01%
3 Months 1 day – 6 Months0.01%0.01%0.01%0.01%
6 Months 1 day – < 1 Year0.01%0.01%0.01%0.01%
1 year – < 2 years1.05%2.30%0.01%0.01%
2 years – < 3 years1.46%2.51%0.01%0.01%
3 years only1.42%2.38%0.01%0.01%

Source: HDFC Bank

Read – What is RNOR?

RFC domestic account

There is some difference between the RFC account and the RFC (D) account.

An RFC (D) account is a Resident Foreign Currency (Domestic) account. The differences are that the RFC (D) account can be only a current account and it does not earn any interest. Funds from NRE accounts cannot be transferred to an RFC (D) account.

The account can be opened by completing the application form along with self-attested passport copy, copy of work visa or work permit that the NRI had while being abroad and Indian address proof.

An 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 RFC account or you would like to share your experience – use the comment section.

About the Author

Hemant Beniwal is a CERTIFIED FINANCIAL PLANNER and his Company Ark Primary Advisors Pvt Ltd is registered as an Investment Adviser with SEBI. Hemant is also a member of the Financial Planning Association, U.S.A and registered as a life planner with Kinder Institute of Life Planning, U.S.A. He started his Financial Planning Practice in 2009 & is among the first generation of financial planners in India. He also authored Bestseller book "Financial Life Planning".

  • NM says:

    A NRI for 25 years returning to India having USD FCNRs and NRE Rs deposits.
    1. What should be done with NRE InRs deposits ? Can they be retained till maturity? Is the interest taxable or taxfree?
    2. What should be done with USD FCNRs? Can they be retained till maturity? Is interest taxfree?
    3 For InRs NRE account – is it to be converted to RFC account?
    Thanks NM

  • Shyamal Pandit says:

    Useful reading. Being NRI, I become enriched with this article.

  • Amit Dutta says:

    Thanks for your nice article..How long a returning NRI can maintain the RFC accounts? Is it life long or for some limited years?

  • Dr Masood Alam says:

    I returned India on 4th October after 33yrs staying in Saudi Arabia ..I need investment and tax consultation with you pls advise how will I proceed

  • Ashish Maheshwari says:

    I have NRE savings account jointly held with my wife. My status has been changed from NRI to resident Indian but my wife is still an NRI. I am primary holder of the account. Can i change this account to RFC account and how.

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