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What is an RFC account?

A resident foreign currency (RFC) deposit account caters for people returning to India or those with income from overseas.

If you’ve been living abroad as a non-resident Indian (NRI) and have an overseas income source, an RFC account can help you manage your foreign income and investments without needing to convert to Indian rupees.

Apply for an RFC Deposit account

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Who can open an RFC account?

You're eligible for an RFC Deposit account if you are:

  • An NRI, person of Indian origin (PIO) or overseas citizen of India (OCI) who has been living abroad and are now returning to India
  • Receiving foreign exchange remittances such as pensions, salaries or proceeds from overseas asset sales that can be deposited into an RFC account

If you move overseas again and become an NRI, you're eligible to open an FCNR (B) account (foreign currency non-resident bank account) or an NRE (non-resident external) account. Also, you can convert your existing resident account to NRO (non-resident ordinary).

Find out more about NRI services.

Why should you open an RFC account?

Having a resident foreign currency deposit account means you don’t have to worry about exchange rate fluctuation.

You can keep your funds in the original currency and convert to Indian rupees when the rates are better, or when it suits you.

Compare all NRI accounts

Key features of an RFC Deposit account

  • Fund transfers: You can transfer money from overseas into RFC deposits via inward remittance
  • Overseas remittance: Use your RFC Deposit account to make remittances abroad
  • Term deposits: Keep and earn interest on fixed deposits in India, with auto-renewal

What currencies can you deposit?

Most Indian banks allow deposits in widely accepted foreign currencies that can be easily converted.

Minimum deposit amounts required by HSBC:
Currency Minimum deposit amount
USD 5,000
GBP 3,500
JPY 500,000
EUR 5,000
Minimum deposit amounts required by HSBC:
Currency USD USD
Minimum deposit amount 5,000 5,000
Currency GBP GBP
Minimum deposit amount 3,500 3,500
Currency JPY JPY
Minimum deposit amount 500,000 500,000
Currency EUR EUR
Minimum deposit amount 5,000 5,000

What about a joint RFC Deposit?

You can open an RFC Deposit account with a resident close relative (PDF, 241KB). If you hold a joint deposit with a resident Indian, it can only run on a ‘former or survivor’ basis.

Are there any tax implications?

Any interest you earn on your RFC deposits is taxed in India, in line with your tax bracket. Tax Deducted at Source (TDS) is also applicable on such interest earned.

Interest can be paid at set intervals or when your account matures. If you prefer to receive interest at intervals, let your bank know so they can deduct TDS on the interest and credit the rest.

Read Understanding NRI income tax rules to navigate Indian tax law.

Takeaway

If you’re returning to India, an RFC account is a simple and safe way to manage your overseas money without the risk of exchange rate instability.

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Disclaimer

This publication has been issued by The Hongkong and Shanghai Banking Corporation Limited (HSBC), India, Incorporated in Hong Kong SAR with limited liability, for the information of its customers only. This publication does not constitute tax or investment advice or an offer to sell, or a solicitation of an offer to purchase or subscribe to any product / investment. The information herein is derived from sources believed to be reliable and the concerned Information Provider(s) have duly authorised HSBC to use such information provided by them. Whilst every care has been taken in compiling the information, HSBC and the concerned Information Provider(s) do not guarantee, or make any representation or warranty and accept no responsibility or liability as to its accuracy or completeness and shall not be liable for damages arising out of any person's reliance upon this information or any action taken or not taken as a result of any material contained in the publication. All information is subject to the relevant Act, Rules, Regulations, Policy Statements, etc., of the Income Tax Department and subject to change. Expressions of opinion are those of HSBC and the Information Provider(s) only and are subject to change without notice. HSBC has not independently verified any information provided by the Information Provider(s) or that has been derived from the sources believed to be reliable by HSBC. Opinions expressed herein do not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this publication. This document is for circulation in India only. No part of this publication may be reproduced or stored in a retrieval system without the prior written permission of HSBC. Any liability is accordingly expressly disclaimed by HSBC, its officers, directors and employees.