9 Things NRIs Must Know About RFC Accounts: RFC Account Key Features

We discuss 9 things NRIs must know about RFC accounts and cover RFC account key features. Resident Foreign Currency (RFC) accounts are important for Non Resident Indians (NRIs) returning to India. 9 must-know things about them.
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Edited Highlights
00:00 Chapter 1 Introduction

00:14 1. Can be opened by any NRI returned to India
A Resident Foreign Currency (RFC) account can be opened by an NRI who has returned to India to settle here permanently, after having stayed abroad for a minimum of one year.

00:31 2. Maintained in prominent currencies
RFC accounts can be maintained in prominent currencies including US Dollar, Euro, British Pound, Japanese Yen, Australian Dollar and Canadian Dollar.

3. Fully repatriable
Funds in RFC accounts are fully repatriable and one can bring in money from all kinds of investments made in any form outside India.

4. Can be held as current, savings or term deposit accounts

5. Can be held with a resident close relative The only mode of operation is ‘former or survivor basis’.

6. Important credits allowed
This includes proceeds of assets held outside India at the time of return, balances standing to the credit of NRE and FCNR accounts at the time of return, income from overseas assets, pension received from abroad and amount received as a gift or inheritance from outside India.

7. Interest offered similar to FCNR accounts
This is typically upto 1 per cent higher than interest offered in respective countries on foreign currencies.


8. Taxed like other deposits in India
Any interest earned on RFC account is taxed in India. The tax is deducted at source. However, there is an exemption on tax on RFC account till a returning Indian maintains the status of ' Non Resident ' or 'Resident but Not Ordinary Resident'.

9. Transfer of RFC funds to NRE and FCNR required on going abroad again
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