RFC account for returning NRIs: hold foreign currency after return
An RFC (Resident Foreign Currency) account lets a returning NRI hold foreign currency — USD, GBP, EUR — in India after losing NRI status. It prevents forced INR conversion of overseas savings. The balance can be used for overseas travel, education, medical expenses or reconverted to NRE if you become NRI again.
Park overseas savings in India without converting to INR
An RFC account allows a returning NRI to hold foreign currency in India after resuming resident status. You can credit NRE/FCNR balances, overseas earnings and assets to an RFC account. Interest is taxable in India once you become Ordinarily Resident (OR). If you become NRI again, the balance can be transferred back to an NRE account.
Key points
- Holds foreign currency in India — RFC accounts let returning NRIs keep USD, GBP or EUR without converting to INR — avoiding forced conversion at an unfavourable rate.
- Eligible credits — NRE and FCNR balances, pension or superannuation from abroad, sale proceeds of overseas assets and foreign earnings can all be credited.
- Taxable after RNOR ends — RFC interest is tax-free during RNOR. Once you become Ordinarily Resident, RFC interest becomes fully taxable in India.
Who should open an RFC account and when
Open an RFC account when you return to India and intend to maintain overseas savings in foreign currency without converting to INR.
Credit your NRE and FCNR balances to RFC before redesignating them — this preserves foreign currency denomination.
Ideal during RNOR: RFC interest is tax-free, and the balance retains optionality — you can convert to INR at a later date or transfer to NRE if you leave India again.
RFC vs NRE vs resident savings
NRE account: for NRIs only. Must be redesignated on return. INR-denominated.
FCNR(B): for NRIs only. Foreign currency FD. Must mature or be transferred on return.
RFC account: for returning NRIs. Foreign currency. Can hold indefinitely. Tax-free during RNOR, taxable thereafter.
Resident savings: INR. No foreign currency holding. Standard Indian resident account.
Frequently asked questions
Can I open an RFC account at any Indian bank?
Most major Indian banks (SBI, HDFC, ICICI, Axis) offer RFC accounts. Contact your bank's NRI or returning-resident desk to open one.
Is there a minimum balance for RFC accounts?
Minimum balance requirements vary by bank and currency. Check with your specific bank.
What happens to RFC balance if I leave India again?
If you become NRI again, the RFC balance can be transferred to a new NRE account or FCNR deposit — you are not required to convert it to INR.