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A Complete Guide For Nris On How To Open An Rfc Account

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Are you a returning NRI, coming back to India? Did you know that banks in India offer an exclusive account to cater to the needs of returning NRIs?

Presenting you the Resident Foreign Currency (RFC) account. It’s a savings account where you can park your funds directly in foreign currencies. Yes, you don’t have to deal with foreign exchange conversions to INR. Instead, you can maintain your account in a foreign currency like USD, GBP and others.

How to Open a Resident Foreign Currency Account?

Eligibility – Any NRI or PIO who has stayed overseas continuously for one year or more and is currently residing in India. If you are eligible, you can approach any authorised bank in India who offers this facility to initiate the application process. Some banks provide online applications while others require you to visit a branch.

Documents Required – The list of documents vary from one bank to another. However, here is a general list of documents that you will have to furnish.

● Duly filled and signed account opening form
● Self-attested copies of passport, expired work permit, employment visa or resident visa
● Current address proof – this should be an Indian address

Foreign Currencies Permitted – This varies from bank to bank. Mostly, all banks offer the RFC account to be maintained in USD or GBP, while a few others also permit other popular currencies like Euro, CAD, and AUD.

Interest Rates – You can open a resident foreign currency account as:

● Savings account
● Current account
● Or fixed term deposits
The interest rate varies based on the account type, term, and foreign currency. Generally, you can expect to earn interests in the range of 2.5% to 3% for accounts (Different for RFC FD and RFC SB) maintained for one year or more in USD.

Taxation – If you hold a Resident status and not an Ordinary Resident, then you are eligible for tax exemptions on the interest earned in your account.

Are there any Restrictions on Funds that can be deposited in the Account?

You can deposit funds in your RFC account from any of the fund sources mentioned below:
● Funds earned from your business or employment abroad.
● Any money you receive as a pension, superannuation from an overseas employer.
● Funds received on sale of assets, shares, investments and other property held outside the country.
● Any income you earn from overseas assets like interest, dividend, etc.
● Any foreign currency notes you bring back with you. If the value of the notes exceeds $5000, you have to submit a CDF (Currency Declaration Form) signed by customs officials.

Are there any Restrictions on Withdrawal of Funds?

As mentioned above, you can withdraw funds in INR to meet your expenses as well as to make investments in the country. There are no restrictions.
Now, that you are aware of the terms and conditions, features and benefits of the account, you can consider it to park your foreign currency if you are a returning NRI.

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