Planning to return to India but have considerable savings in a foreign currency? An RFC (Resident Foreign Currency) bank account can help. Read this post to know five reasons why NRIs should consider opening an RFC bank account.
Most NRIs maintain their savings in the local currency of the country they are currently living in. Before moving to India and getting their status changed from NRI to resident Indian, they generally convert their foreign currency savings into INR.
But what if you don’t want to convert your foreign savings into INR? What if you have plans to regain your NRI status in the future? In such cases, an RFC (Resident Foreign Currency) account can be an excellent option. Take a look at five of the top features of this account-
- Account Can Be Maintained in Foreign Currency
RFC bank account is a type of savings account where NRIs can safely park their foreign savings when they return to India. It can be opened with several convertible foreign currencies and then maintained in USD or GBP for complete convenience.
Apart from USD and GBP, most top banks generally accept other foreign currencies like EUR, JPY, SGD, CAD, HKD, AUD, and more.
- Interest Bearing Account
As the RFC bank account is similar to a savings account, the balance maintained in the account earns interest. So, the account not only allows returning NRIs to maintain their savings in foreign currencies but also helps them grow their savings.
NRIs should compare some of the top Indian banks before opening their account to ensure that they select one that offers highly competitive interest rates.
- INR Cash Withdrawal in India
Once the RFC bank account is opened, account holders can also withdraw funds in INR. The balance maintained in the foreign currency will be converted into INR as per the current exchange rate before being paid to the account holder.
Withdrawals can either be in cash or even direct transfers to other rupee accounts as per the requirements of the customers.
- Principal and Interest Fully Repatriable
In case a returned NRI decides to move to a foreign country again, the funds in the RFC bank account can be easily transferred to his/her new country of residence. The principal, as well as the interest amount in an RFC bank account, is fully repatriable.
NRIs don’t need to worry about any additional taxes or charges to move their funds from India to any other country of their choice.
- Transfer to NRE/FCNR Account after Regaining NRI Status
If, after regaining NRI status, the account holder still wants to keep the savings in India, then the funds from the RFC account can be instantly transferred to his/her NRE (Non-Resident External) or FCNR (Foreign Currency Non-Resident) account.
As the RFC bank account can only be opened by returning NRIs, it cannot be used by the account holders after regaining NRI status. NRE and FCNR accounts are exclusively created for NRIs earning income overseas.
Who Should Open an RFC Bank Account?
With the help of an RFC bank account, NRIs returning to India can park their foreign earnings without converting them to INR. It can be an excellent option for NRIs to deposit their foreign savings earned through overseas business or employment.
The account is also a preferred option for returning NRIs who have received any income like dividends, interest, pension, superannuation, or funds from the sale of assets overseas. Such NRIs can consult a reputed Indian bank to know more about the RFC bank account and its application process.