Resident Foreign Currency (RFC) Account

Overview:

  • To park funds for those NRIs / PIOs who have returned to India for permanent settlement (Returning Indians)
  • Account can be opened in USD, EURO or GBP
  • It can be opened either individually or jointly with any other person eligible to open RFC account
  • Both principal and interest are payable in foreign currency. Hence, there is no exchange loss on principal and interest
  • Account types permissible:
    • Term Deposit
    • Special Term Deposit
  • Interest earned is subject to tax depending on the status of the account holder i.e. Resident or RNOR ( Resident but not ordinarily resident)
  • It can be converted to FCNR (B) / NRE accounts in case the person regains NRI status
PERMISSIBLE CREDITS

Permissible Credits

  • Transfer from balances held in NRE / FCNR (B) accounts upon arrival in India. Existing FCNR (B) time deposits can be closed prematurely or can be converted into RFC account or can be held till maturity..
  • Fresh remittances from overseas through banking channel (upon realization of sales proceeds of assets or income earned)
  • Personal cheques drawn on foreign account
  • Proceeds of Foreign Currency Notes / Travelers cheques tendered by NRI / PIO, while visiting India. Amounts in excess of USD 5000 (or equivalent) in currency or USD 10,000/- (or equivalent) in Travelers cheques, should be accompanied by a Currency Declaration Form
TYPES OF RFC ACCOUNTS

Types of RFC Accounts:


Term Deposits (TDR) -

  • Interest is paid at a frequency of 180 days from date of Term Deposit
  • Foreign Currency deposits of fixed tenure
  • Minimum Deposit of USD 1000, GBP 1000 or EURO 1000
  • Principal & interest amount are fully repatriable
  • Nomination facility available
  • Premature withdrawal allowed
  • Automatic renewal on maturity for the same period but at the then prevailing rate of interest.

Special Term Deposits (STDR) -

  • Enjoy higher returns, with interest both on your deposit and on the interest accrued i.e. interest gets compounded after every 180 days
  • Foreign Currency deposits of fixed tenure
  • Minimum Deposit of USD 1000, GBP 1000 or EURO 1000
  • Principal & interest amount are fully repatriable
  • Nomination facility available
  • Premature withdrawal permissible
  • Automatic renewal on maturity for the same period but at the then prevailing rate of interest
TENOR OF DEPOSITS (TDR/STDR)

Tenor of Deposits (TDR / STDR):

  • Minimum period of 1 year
  • Maximum period of 3 years
INTEREST RATES

Interest Rates

Please click here for FCNR (B) Deposits (TDR / STDR)

PREMATURE WITHDRAWALS

Premature Withdrawals:

  • No interest is payable, if the deposit is withdrawn before one year
  • If the deposit is withdrawn after completion of one year, the interest paid shall be 1.00% below the rate applicable for the period deposit has remained with the Bank or 1.00% below the contracted rate, whichever is lower
TAX IMPLICATIONS

Tax Implications:

  • A person who was non-resident for at least 9 out of 10 previous years prior to the previous year under consideration or person‘s stay in India during the 7 previous year prior to the previous year under consideration should be 729 days or less, shall have the status of “Resident but not ordinarily resident (RNOR)” for the period of two years from his return and then interest income will be tax free in India.
  • In all other cases, tax will be deducted at source on interest income as per prevalent income tax rules in India.
PROCEDURE TO OPEN A RFC ACCOUNT

Procedure to open a RFC Account:

Please click here to download the account opening application, fill it manually and post / courier or submit in a person to your home branch or preferred branch along with the attested copies of proofs & documents selected for KYC in the application.