Planning to return to India but don’t want to convert your foreign savings into INR? You can consider opening an RFC bank account. Check out what this account is, how it works, and more in this post.
There can be several reasons why an NRI returning to India might not want to convert his/her foreign savings and investments into INR. In such cases, the NRIs can consider opening an RFC (Resident Foreign Currency) account. As the name suggests, these are foreign currency bank accounts designed for resident Indians and returning NRIs.
Take a look at some of the most important things about an RFC bank account to decide whether it is the right choice for you-
- What is an RFC Bank Account?
Bank accounts like NRE (Non-Resident External) and NRO (Non-Resident Ordinary) are Indian denomination accounts. The foreign earnings you deposit into these accounts are automatically converted into INR. An RFC bank account is ideal for NRIs who plan to return to India permanently but don’t want to convert their foreign earnings into INR.
After returning to India, NRIs also have the option to convert their existing NRE or FCNR (Foreign Currency Non-Resident) account into an RFC bank account. Just like other types of bank accounts available in India, returning NRIs can open RFC savings, current, or even term deposit accounts.
- What Foreign Currencies are Supported by RFC Bank Accounts?
RFC account supports freely convertible foreign currencies. In other words, the currencies that are recognized by international forex markets and can be easily exchanged with other currencies are generally supported by RFC bank accounts.
All the banks mostly support the US Dollar (USD), Pound Sterling (GBP), Euro (EUR), and Japanese Yen (JPY). But note that RFC bank accounts are single currency accounts. A single account will only support a single foreign currency.
- Do RFC Bank Accounts Allow Cash Withdrawals?
Yes, RFC bank accounts allow cash withdrawals in India. However, the withdrawal will be in INR. Also, you will first be required to submit a written application for requesting a withdrawal. The bank will convert your foreign funds into INR as per the current exchange rate for processing your withdrawal request.
The withdrawal can either be in cash or direct deposit to another Rupee account. Withdrawals above Rs. 50,000 will require the account holder to submit a copy of his/her PAN. For cash withdrawals, the account holder will also be required to submit a copy of a photo identity document like passport, driving license, etc.
- Can You Select a Nominee for Your RFC Bank Account?
Yes, account holders are free to select either a resident Indian or even a non-resident as a nominee for their RFC account. In case of the account holder’s death, the account balance will be paid to resident Indian nominee in INR.
If the nominee is a non-resident, the same would be remitted to their foreign bank account. But as the nomination facility can vary between banks, one should check their bank’s policies when opening the account.
Maintain Your Savings in a Foreign Currency with an RFC Bank Account
If you are an NRI planning to move to India for good and don’t want to convert your foreign earnings into INR, you can consider opening an RFC bank account but only after returning to India. Depending on your requirements, you can consider an RFC savings, current, or term deposit account.
As the terms and conditions can vary between banks, make sure that you check them thoroughly before opening the account to avoid discrepancies.