An RFC fixed deposit is a smart way to protect your foreign currency savings and earn attractive returns. This account is designed specifically for Non-Resident Indians (NRIs) who have returned to India permanently. If you have been an NRI, employed overseas for at least a year, and have returned since April 18th, 1992, you are eligible to open an RFC FD.
Also read: How to break your FDs before maturity
What is RFC fixed deposit?
An RFC fixed deposit is a term deposit account that can be opened, held, and maintained by an individual who was an NRI but resides in India as a result of a change of residential status. The eligibility for an account holder includes any Person of Indian Origin (PIO) or NRI returning to settle in India permanently. In case the person regains their NRI status, the account can be converted into a Foreign Currency Non-Resident (Bank) (FCNR(B)) or Non-Resident External (NRE) account.
The eligibility criteria may vary depending on the bank. Here are some of the most common eligibility criteria for opening an RFC fixed deposit account:
- Indian citizen residing overseas for business, employment, vocation, or studies.
- NRI returning to India after staying abroad for a continuous period of one year.
- NRI, who has permanently settled in India since their return.
- PIO card or OCI card for PIO or OCI candidates.
Why choose RFC fixed deposit
An RFC fixed deposit is a great choice for returning NRIs as they can deposit money in foreign currencies and receive safe and high returns on their amount. It does not involve any risk of foreign exchange conversion. Moreover, NRIs can earn attractive RFC account interest rate on funds held in foreign countries.
RFC deposits serve a specific need for individuals transitioning their residency status. Like regular fixed deposits, they offer secure returns, but are tailored to the unique financial circumstances of returning NRIs.
Also read: How to download your fixed deposit receipt
RFC fixed deposit features and benefits
- Straightforward eligibility: An RFC account can be opened by any returning NRI.
- Flexibility in currency: The account can be funded with any convertible currency and maintained in two foreign currencies: USD and GBP.
- Joint holding: In the case of such an account, the joint holders must also be returning NRIs. A resident relative can be the joint holder in an RFC account on 'former or survivor' basis.
- Cash withdrawal: Cash can be withdrawn in rupees from the branch.
- Easy movement: Both balance and interest earned in the account are fully repatriable.
- Hassle-free change of status: Upon change of status to NRI, the funds stored in an RFC account can easily be transferred to the NRE/FCNR account.
- Risk-free conversion: It does not involve any foreign exchange risk from conversion into rupees.
RFC fixed deposit documents
Here is a list of documents needed to open an RFC fixed deposit account:
- RFC declaration form
- Passport photograph
- Photocopy of the pages containing passport details and personal details of all eligible applicants
- Photocopy of visa and immigration stamps showing evidence of foreign stay for at least 1 year
- Permanent Account Number (PAN); if unavailable, the applicant can submit Form 60
- Address proof for Indian residence
- Original KYC documents
Also read: Fixed deposit checklist
Conclusion
NRIs having funds in foreign currency can earn high returns by investing in RFC fixed deposit, which is a special term deposit scheme. This is a great option for Indians who have returned to India and need to manage their earnings in foreign currency. The funds in an RFC account can be used for purposes such as remittances or investments abroad, maintenance of dependents or any personal purposes abroad, or expenses and investments to be made in India.
If you are looking for safe investment option, then you can consider investing Bajaj Finance Fixed Deposit. While Bajaj Finance might not offer RFC deposits specifically, they do offer competitive interest rate on their fixed deposits, up to 8.65% p.a.
