Resident Foreign Currency Account (RFC)

The Foreign Exchange Management Regulation, 2015 regulates various types of foreign currency accounts in India. Under this, an Indian resident can open and maintain a savings or current or term deposit account, be it in or outside India. The Resident of India can open the Foreign Currency Account either single-handedly or jointly.

Read more
investent plan
Plans starting from ₹1000/month
bajaj allianz life insurance
loading...
ICICI Prudential Life Insurance Company
loading...
tata aia life insurance
loading...
Best Investment Plans˜
  • money
    Invest 18k/month & get 2 Crore# on maturity
  • tax
    Manage your funds online60k + happy customers across 25+ countries
  • compare
    Compare & Choose 30+ Plans and 150+ Fund options

There are various types of Foreign Currency Accounts available in India, but in this article, we will primarily focus on the Resident Foreign Currency Account (RFC). 

What is a Foreign Currency Account?

An account in which foreign currency is held or maintained, the currency which is other than that of India, Nepal, Or Bhutan, is known as a “Foreign Currency Account”. Any person residing in India can open a Foreign Currency Account. As per Section 2(v) of the FEMA (Foreign Exchange Management Act) 1999, an Indian Resident means:

  • Any individual living in India by birth.

  • Or living in India for 182 days in the preceding financial year.

  • Or has lived for 60 days in that year specifically.

  • Or has been in India for continuous 365 days for the last four years.

  • Any company incorporated or registered in India.

Start Small and Get Big Returns Start Small and Get Big Returns

What is a Resident Foreign Currency Account (RFC)?

A resident Foreign Currency Account is a type of Foreign Currency Account that any Resident of India can open with an authorized bank in India. Any individual can open an RFC Account, and it is a suitable option for Indians who have returned to India after spending a certain time abroad (generally 1 year or more) and are now willing to manage their earnings (earnings in foreign currency) here.

Some of the main highlights of the RFC (Resident Foreign Currency) Account are as follows:

  • Any individual who has returned to India after 1 year or more is eligible to open an RFC Account.

  • The account can be directly opened with any authorized bank or an authorized dealer.

  • Foreign currency like USD, GBP, EURO, etc.

  • An RFC Account can be either savings, current or a term deposit account.

  • Funds received from various sources like salary, business, sale of the asset, pension, etc., can be deposited in the RFC Account.

  • The account can be held individually or jointly.

  • The money deposited in the account can be used for any kind of investment or expense.

  • Withdrawal can be made as per the wish of the individual.

  • The currency deposited can be easily converted into Indian currency.

  • The nomination facility is also available under the RFC Account.

SIP with Life Cover and Tax Savings SIP with Life Cover and Tax Savings

Documents Required to Open RFC Account

The following documents are required to open an RFC account in India:

  • RFC Account application form

  • Expired work permit or expired visa for employment

  • Current passport

  • Address proof

Eligibility to Open an RFC Account

Any Indian resident can open RFC Account out of foreign exchange received from the following sources:

  • An individual, along with the eligible person, or

  • Resident relatives

It is important to know that the relative holder cannot operate the RFC Account during the life of the primary account holder.

investment plans for nrisinvestment plans for nris

Permitted Credits Under the RFC Account

RFC Account can be opened by any Indian resident out of foreign exchange received from the following sources:

  • Received as superannuation

  • Monetary benefits from the foreign employer

  • From the conversion of assets under Section 6(4) of FEMA.

  • Gift or inheritance from a person (as per Section 6(4)) of FEMA.

  • The exchange is received as any type of earnings from LIC (can be claims, maturity, surrender value, etc.)

  • The remaining balance in the person’s NRE / FCNR accounts from abroad to India at the time of shift.

Under the permitted debits, no such restriction is implied on utilization, be it outside India or in India.

Foreign Currency Accounts are extremely beneficial for NRIs (Non-Resident Indians) who are planning to return to India and have money or assets with them in foreign currency.

investment plans for nrisinvestment plans for nris

FAQs

  • Who holds RFC Accounts?

    Ans: Any Resident of India who is planning to return back after living abroad for a minimum period of 1 year or more is allowed to open an RFC account.
  • Is interest in RFC Account taxable in India?

    Ans: The interest is exempted only till the residential status of the individual is non-resident or RNOR as per the Income Tax Act, 1961. As soon as the status of the individual changes to “Ordinary Resident”, the interest added to the income turns taxable.
  • How long can I maintain RFC Account?

    Ans: RFC account can be held in a term deposit, savings, or current account form. The term deposit account can be maintained for 1 year to 3 years’ time.
  • Can the NRE account be converted to RFC account?

    Ans: Yes. One has the option to convert their NRE account to RFC account, where foreign currency can be maintained, and the funds are fully repatriable.

˜Top 5 plans based on annualized premium, for bookings made in the first 6 months of FY 24-25. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
*Past 10 Year annualised returns as on 01-02-2025
*All savings plans are provided by the insurer as per the IRDAI approved insurance plan. Tax benefit is subject to changes in tax laws. Standard T&C Apply
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
#The investment risk in the portfolio is borne by the policyholder. Life insurance is available in this product. The maturity amount of Rs 2 Cr. is for a 30 year old healthy individual investing Rs 18,000/- per month for 30 years, with assumed rates of returns @ 8% p.a. that is not guaranteed and is not the upper or lower limits as the value of your policy depends on a number of factors including future investment performance. In Unit Linked Insurance Plans, the investment risk in the investment portfolio is borne by the policyholder and the returns are not guaranteed. Maturity Value: 1,06,79,507 @ CAGR 4%; 2,12,15,817 @ CAGR 8%. All plans listed here are of insurance companies’ funds. *Tax benefits and savings are subject to changes in tax laws. All plans listed here are of insurance companies’ funds.
¶Long-term capital gains (LTCG) tax (12.5%) is exempted on annual premiums up to 2.5 lacs.
**Returns are based on past 10 years' fund performance data (Fund Data Source: Value Research).

NRI Plans articles

Recent Articles
Popular Articles
IndusInd Bank FCNR Account

10 Feb 2025

The IndusInd Bank FCNR Account is a great choice for
Read more
City Union Bank NRE Account

10 Feb 2025

City Union Bank NRE Account is designed for NRIs to manage their
Read more
RBL Bank FCNR Account

10 Feb 2025

The RBL Bank FCNR Account is designed for Non-Resident Indians
Read more
Karnataka Bank NRE Account

10 Feb 2025

The Karnataka Bank NRE (Non-Resident External) Account is a good
Read more
IDFC First Bank FCNR Account

10 Feb 2025

IDFC First Bank's FCNR Account is designed exclusively for
Read more
Best NRE Savings Accounts for NRIs in 2025
  • 28 Jan 2022
  • 104952
India is a growing economy and is getting a lot of global recognition these days. It has shown immense growth in
Read more
NRI Account Minimum Balance
  • 05 Jan 2022
  • 33210
The mere mention of the NRI minimum balance will compel you to wear the thinking cap to fathom its overall import
Read more
NRI Investment Plans in India
  • 24 Mar 2014
  • 74617
NRI Investment Plans in India offer a gateway for Non-Resident Indians to leverage the country’s dynamic
Read more
SBI NRI Account
  • 07 Feb 2024
  • 13769
The State Bank of India (SBI) NRI account is designed for Non-Resident Indians (NRIs) and Persons of Indian
Read more

top

Become a Crorepati

Invest ₹10K/Month & Get ₹1 Crore returns*

Mobile +91
*T&C Applied.
Close
Download the Policybazaar app
to manage all your insurance needs.
INSTALL