RFC Account: Resident Foreign Currency Fixed Deposit Account for Returning NRIs

• NRI who has returned to India on or after 18th April, 1992 
• Resident outside India for a continuous period of not less than 1 year prior to your return 
• Permanently settled in India since your return 

In case of a new customer (Erstwhile NRIs), an individual Savings Account in INR must be opened first. Then RFC(D) fixed deposit Account will be opened under the same Customer ID of the individual’s Savings account.

Features and Benefits of RFC(D) Fixed Deposit Account

•  You get flexible tenure from 1 to 3 Years
• (For periods exceeding 12 months, deposits are permitted only in multiples of 3 months (e.g., 15, 18, 21 months, etc). 
• You can hold your deposits in USD, GBP and EUR Currency 
• Minimum Deposit value would be 500 USD/GBP/EUR 
• Safeguard your deposits against exchange rate fluctuations 
• Attractive interest rates 
• Nomination Facility can be availed 
• Principal and interest are fully repatriable

The account can be converted to FCNR (B) OR NRE accounts in case you regain NRI status.

How Can You Use Money in an RFC(D) Account?

You can use the funds in your RFC account for permitted transactions in India and abroad. The permitted use of your funds depends on the transaction, applicable FEMA rules and your bank’s procedures.

Below are some ways you can use the funds from an RFC account:

• Make payments in India: Convert the foreign currency into INR to meet your expenses in India. Depending on your bank’s process, you may need to transfer the converted amount to your resident savings account or current account.
• Make overseas payments: Use eligible funds for permitted payments abroad, subject to applicable rules and your bank’s procedures.
• Manage foreign currency deposits: Keep eligible deposits in the original currency and use them when required, instead of converting the entire balance into INR immediately.

How is an RFC Account Taxed?

The tax treatment of interest earned on a RFC account depends on your residential status for income tax purposes for the relevant tax year. Your residential status under FEMA may differ from your residential status under income tax laws.

The tax rules differ depending on whether you qualify as a Resident but Not Ordinarily Resident (RNOR) or a Resident and Ordinarily Resident (ROR).

   1. When you qualify as an RNOR, interest earned on an RFC account may be exempt from income tax, subject to the applicable conditions.

   2. Once you become an ROR, your foreign income generally becomes taxable in India, subject to applicable exemptions and reliefs. Interest earned on your RFC account may therefore become taxable.

How to Open an RFC(D) Account?

To open an RFC(D) account, first confirm that your residential status and source of funds make you eligible to open one.

Then, follow these steps to open your RFC account.

• Choose a bank: Look for a bank that offers the type of RFC account you need and compare its interest rates, supported currencies and deposit terms.
• Apply online or offline: If online account opening is available, apply through the bank’s website. Otherwise, download the RFC account opening form from the website or collect it from a branch.
• Submit the form and documents: Fill out the application form and submit it along with the required documents and applicable fees, if any.
• Complete account activation: If you meet the eligibility requirements and the bank approves your application, your RFC account will be opened and activated.

Note: To know more about the exact procedure to open an RFC(D) Fixed Deposit Account, please visit your nearest Ujjivan SFB Bank Branch.

What Documents are Required to Open an RFC Account?

To open an RFC account, your bank may ask you to submit the following documents:

• Completed RFC account opening form
• KYC documents, such as proof of identity and address
• Proof of residential status under FEMA
• PIO or OCI card, if applicable
• Proof of source of funds, such as overseas bank statements or retirement benefit documents

RFC(D) vs NRE vs NRO vs FCNR(B)

An RFC account is one of several foreign currency banking options available to NRIs and returning Indians. The key differences lie in who can open each account, the currency held and how you can use the funds.

Which account should you choose?

• Open an RFC account if you return to India and want to retain eligible foreign currency savings.
• Open an NRE account if you are an NRI who wants to hold overseas earnings in India in INR.
• Open an NRO account if you need to manage income earned in India while living abroad.
• Open an FCNR(B) deposit account if you are an NRI who wants to keep eligible savings in foreign currency as a fixed-term deposit.

Final Thoughts

An RFC(D)  account can help you retain eligible foreign currency deposits when you return to India, without converting the entire amount into INR immediately. Before opening an RFC(D) account, check the applicable FEMA, RBI and income tax regulations, along with your bank’s terms, to confirm your eligibility, permitted sources of funds and available account options. This will help you manage your account in compliance with the applicable rules.

Disclaimer:

The contents herein are only for informational purposes and generic in nature. The content does not amount to an offer, invitation or solicitation of any kind to buy or sell, and are not intended to create any legal rights or obligations. This information is subject to updation, completion, amendment and verification without notice. The contents herein are also subject to other product-specific terms and conditions, as well as any applicable third-party terms and conditions, for which Ujjivan Small Finance Bank assumes no responsibility or liability.

Nothing contained herein is intended to constitute financial, investment, legal, tax, or any other professional advice or opinion. Please obtain professional advice before making investment or any other decisions. Any investment decisions that may be made by you shall be at your own sole discretion, independent analysis and evaluation of the risks involved. The use of any information set out in this document is entirely at the user's own risk. Ujjivan Small Finance Bank Limited makes no representation or warranty, express or implied, as to the accuracy and completeness of any information herein. The Bank disclaims any and all liability for any loss or damage (direct, indirect, consequential, or otherwise) incurred by you due to use of or due to investment, product application decisions made by you on the basis of the contents herein. While the information is prepared in good faith from sources deemed reliable (including public sources), the Bank disclaims any liability with respect to accuracy of information or any error or omission or any loss or damage incurred by anyone in reliance on the contents herein, in any manner whatsoever.

To know more about Ujjivan Small Finance Bank Products Visit:"https://www.ujjivansfb.bank.in"

All intellectual property rights, including copyrights, trademarks, and other proprietary rights, pertaining to the content and materials displayed herein, belong to Ujjivan Small Finance Bank Limited or its licensors. Unauthorised use or misuse of any intellectual property, or other content displayed herein is strictly prohibited and the same is not intended for distribution to, or use by, any person in any jurisdiction where such distribution or use would (by reason of that person's nationality, residence or otherwise) be contrary to law or registration or would subject Ujjivan Small Finance Bank Limited or its affiliates to any licensing or registration requirements.

Know More