The financial market has always been a volatile one. While plenty of marketers and investors have spent considerable time and resources, researching about the market, they are still unable to completely predict the market trends. This can go a long way to affecting any investments, especially if the rates are being locked in for a long time.
Under these circumstances, any NRI who is returning to India, may think twice before converting their foreign currency into the local INR. Additionally, they would want to hold out on their foreign funds and investments, in order to anticipate for better conversion rates in the future. However, in order to meet the needs of such NRI’s, the government has offered the resident foreign currency account, especially for NRI’s who are returning home. Here is all that you need to know about the RFC account:
What is the RFC account?
Any NRI that is returning to India can open the RFC account. It can be maintained in foreign currency. Before opening the account, the NRI must satisfy certain criteria. For one, the applicant must maintain a minimum period of at least a year or return permanently to India. Additionally, the applicant should have returned to India on or after April 18, 1992, as per the RBI regulation.
What are the different options under the RFC account?
Under the RFC account, an applicant can opt for a RFC saving account or termed deposits. Under the saving account, the individual can invest in any of the three foreign currencies, namely the dollar, euro or the British pound. However, some banks also offer foreign investments in Japanese yet, as well as other selected currencies. Some banks even allow the applicant to open this account with the provision that will be converted into the above currencies.
What funds can be deposited or transferred from this account?
RFC accounts accept direct deposits of funds from bank account held outside India. Additionally, funds that are raised from selling foreign currency shares and foreign assets or balances from NRI or FCNR accounts can be used. Money can also be transferred externally from this account in the form of foreign currency. But if you are going to use the funds within India, then withdrawal from this account is permitted only in Indian rupees.
How can you open a RFC account?
When opening your account, you need to submit a photocopy of your passport, copy of your visa and immigration stamp that indicates that you have stayed outside the country continuously for a minimum of a year. Additionally, you will also need to submit the required amount of photographs to open the account.