RFC Account : Who Can Open It and What Are the Benefits

Have you recently moved back to India after living abroad? Or do you earn in foreign currency but want to keep your funds without converting them to Indian rupees? If so, a Resident Foreign Currency (RFC) account might be exactly what you need.

What is RFC Account

The RFC account is a type of bank account which is designed for individuals who have returned to India or earn foreign income. It allows them to hold money in foreign currencies like USD, GBP, or EUR, making international transactions and investments much easier.

Who Can Open an RFC Account?

An RFC account isn’t for everyone, but if you fall into any of these categories, you might be eligible:

 Returning Indians: If you were a Non-Resident Indian (NRI) and have moved back to India, an RFC account lets you manage your foreign earnings without converting them to rupees.

 Residents with Foreign Income: If you live in India but earn in foreign currency—whether through overseas work, freelancing, or investments—this account helps you keep and manage those funds in their original currency.

 Residents Acquiring Foreign Exchange: In specific cases, Indian residents who receive foreign exchange from overseas sources can also open an RFC account.

Eligibility Requirements

To open an RFC account, you need to meet the following criteria:

• Must be an Indian citizen
• Should have a valid passport or government-issued ID.
• If returning from abroad, you need proof of your non-resident status.
• Must be at least 18 years old.

Benefits of RFC Account

If you’ve earned money in foreign currency, you don’t have to worry about converting it into Indian rupees right away. With a Resident Foreign Currency (RFC) account, you can hold your earnings in the same currency, protecting yourself from exchange rate fluctuations and potential losses.

One of the biggest advantages of an RFC account is its full repatriability—this means you can transfer your funds to any foreign country without restrictions. Plus, if you ever need to convert the money into Indian rupees, you can do so at the prevailing exchange rate, giving you complete flexibility.

Use RFC Account

Your RFC account isn’t just a place to park your foreign currency—it offers multiple benefits:
✔ Cover your expenses in India or abroad.
✔ Invest in shares, securities, or mutual funds, whether in India or overseas.
✔ Make donations or gifts to relatives or charities, both in India and abroad.

Safety & Insurance

Worried about the security of your deposits? No need to! Your RFC account is insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC), covering up to ₹5 lakhs per depositor per bank. This adds an extra layer of protection to your savings.

Tax Benefits You Can Avail

Your tax benefits depend on your residential status:

1. If you are a Resident but Not Ordinarily Resident (RNOR) in India, you can claim tax exemption on both the interest earned from your RFC account and any foreign exchange gains or losses.
2. If you are a Resident and Ordinarily Resident (ROR) in India, you can still enjoy tax exemptions on the interest earned—provided the income comes from sources like pensions, dividends, or interest from abroad.

Final Thoughts

An RFC account offers a safe and flexible way to manage your foreign earnings without worrying about restrictions. Whether you plan to invest, repatriate, or simply hold your funds in foreign currency, this account keeps your options open.

If you’re considering opening an RFC account, make sure to check the latest RBI guidelines and have your documents ready to ensure a smooth process.

Also Read: Top 10 Overseas Banks in India 2025