🏠 RFC Account · Resident Foreign Currency

The RFC account — for after you move back to India

Updated May 2026

An RFC account is for NRIs who have moved back to India permanently. It lets you continue holding foreign-currency funds (from FCNR rollover or remaining overseas balance) without forced conversion to rupees.

Why this page exists

"Convert to RFC, not NRO" is recurring Reddit advice — but nobody documents it well

Every returning NRI eventually hits this decision: my FCNR matured + I'm back in India — where does the USD go? Banks default-push you toward INR conversion or NRO. RFC is the actually-correct answer for most, and almost nobody walks you through it cleanly. This is that page. Tier-2 expansion (full FCNR→RFC playbook + per-bank conversion rules) coming next.

How RFC actually works

Available to "returning Indians" — anyone who lived abroad as NRI then returned
Held in USD, GBP, EUR, AUD, CAD, JPY, SGD
Funded from existing FCNR maturity or overseas account closure
Interest treatment depends on RNOR (Resident but Not Ordinarily Resident) status — typically tax-free for the first 2–3 financial years after return, then taxed in India once you become "Resident Ordinarily Resident"

Trigger to redesignate NRE/NRO is FEMA, not Tax

A common misconception: people assume the 182-day tax-residency rule triggers NRE/NRO redesignation. It doesn't. NRE/NRO eligibility is governed by FEMA (residential status under FEMA), which is intent-based not day-count-based. The moment you return to India "for uncertain duration" or with intent to stay, you become FEMA-resident — your NRE/NRO must be redesignated as resident accounts. Tax residency (182-day rule) is a separate, parallel determination that affects only how your income is taxed. 182-day calculator (tax only) →

Myth: "I have a 2-year window to redesignate NRE → resident"

Not true. Under FEMA, NRE accounts have to be redesignated as resident accounts immediately once your residential status changes. There is no statutory 2-year (or any) grace window in any RBI master direction. Some banks are lax about enforcing this — that's bank discretion, not the rule. If you've been doing it the lax way, the operational risk is small in practice but it's not technically compliant. Worth fixing before your first Resident-Ordinarily-Resident (ROR) tax filing.

Cross-reference: the RNOR playbook

RFC interest is tax-free during your RNOR window (typically 2–3 financial years after return). Beyond that it becomes taxable in India. The full RNOR playbook covers asset-by-asset moves: 401k, Roth, HSA, brokerage, RSU, W-8BEN, plus the FEMA/Tax/Bank-KYC interaction. Read it together with this page if you're inside or approaching your RNOR window.

For RFC: SBI and Union Bank both handle resident conversions — widest branch network Open SBI RFC →

The RFC account — for after you move back to India

How RFC actually works

Or pick a different account type