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Account Closure for NRI

Account Closure for NRI

Resident Foreign Currency or RFC accounts can be maintained in foreign currency by the resident Indians.

 

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RFC accounts are particularly useful for NRIs who come back to India and would like to bring back foreign currency from their bank accounts in a foreign country.

Who can open an RFC account?

You can open an RFC account if you come back to India now and forever after residing overseas for a continuous episode of one year or more. To compute this continuous period, any little visits to India for personal interest would be disregarded. Any certified dealer or bank will assist you to open your RFC account.

Type and form of RFC account

Resident, Foreign Currency accounts, can be opened as savings as well as term deposit accounts and can be apprehended individually or in cooperation in the names of those who are entitled. No loans are obtainable against the Resident Foreign Currency account.

Here, let's take a look at the frequently asked questions of Resident Foreign Currency accounts for returning NRIs.

What is the procedure to close an NRE/NRO account?

  • To close an NRE/NRO account, you should submit a letter to the bank.

  • In the case of reinvestment deposits or fixed deposits, you have to produce them a note and attach your fixed deposit acknowledgement or reinvestment deposit acknowledgement. Retain the photocopies of these for further proceedings.
  • The bank will take some time to seal these deposits before maturity.
  • Moreover, the maturity amount will be driven to your savings deposit in due course.

What happens to your NRO, NRE, and FCNR accounts (NRI accounts) when you come back to India?

  • When you return to India, you have got to notify your bank about alter in your residential status.
  • NRO Account/deposit is required to be re-designated savings account or fixed deposit.
  • NRE savings account would also be re-designated as a resident rupee account.
  • FCNR and NRE deposits can be shut down without more ado or can be permitted to run up to maturity.
  • If you decide to keep on till maturity, you will obtain the contracted rate of interest until maturity.
  • Also, premature withdrawals would pull penalty subject to the terms of the deposit.
  • For FCNR deposits and NRE account/deposit, you get a choice to shift the balance to a Resident Foreign Currency Account (RFC). No fine is allocated for premature withdrawal of NRE/FCNR accounts in such instances.

How to avoid premature withdrawals/closure penalty for NRE or NRO account after returning to India?

If you are an NRI and are getting back to India forever, you have to change your non-resident (NRO, NRE) accounts to resident accounts. You are supposed to be allowed to carry on your NRE FDs as resident FDs at contracted rate till maturity. 

Can money in the RFC account be repatriated out of the country?

The returning NRI can make use of money in RFC account to get hold of assets abroad. The RFC account is the perfect choice for NRI's to park their finances in India in foreign currency with least amount of constraint on its utilization and remittance in a foreign country - anytime in future.

What are Features and Benefits of converting NRE account to RFC account?

  • Money in the RFC accounts can be made the most of without restraint for any bona fide remittance in a foreign country through standard banking channel.
  • Balance in RFC account, both principal and interest, is entirely repatriable.
  • Both principal and interest are to be paid in foreign currency. As a result, there is no exchange risk.
  • Interest rates on RFC accounts or deposits are deregulated and will show a discrepancy across banks
  • In general, RFC accounts are available in freely changeable currencies like USD, GBP, Euro, AUD as well as CAD. Though, not every bank will provide RFC account in all currencies.
  • Money in the RFC account can be remitted without restraint - out of the country or credited to fresh NRE/FCNR account if you get back non-resident status

What are Documents Required for NRI to open RFC account?

The following papers are commonly required for NRI to open RFC account:

  • Photocopy of the pages enclosing passport particulars and personal information of all applicants
  • Copy of applicable visa and migration stamps showing proof of overseas stay for at least one year
  • Your passport size photograph
  • RFC declaration form

How to file an income tax return to avoid double taxation by NRIs?

NRIs can keep away from double taxation by looking for respite from DTAA between the two nations. Under DTAA, there are two ways to assert tax relief:

  • Exemption method
  • Tax credit method

Why NRI choose RFC Fixed Deposit?

  • To book Fixed Deposit in four foreign currencies and save your deposit from exchange rate risks
  • To repatriate your money for bona fide purposes (only for account holders)
  • To catch TDS exemption on interest earned basis declaration of RNOR status at the beginning of the financial year
  • To get tax exclusion on interest accumulated on the declaration of Resident but Not Ordinarily Resident status
  • To save savings from exchange rate risks

What is Eligibility Criterion for Opening RFC Account?

  • Individuals of Indian nationality who have inhabited out of the country for a continuous time of not less than one year are entitled to open and keep up RFC accounts with official dealers in India.
  • Individuals who got back to India before 18th April 1992 after having been inhabiting in a foreign country for a constant period of not less than one year are also entitled to open RFC accounts, on condition that they hold a Returning Indians Foreign Exchange Entitlement (RIFEE) permit.
  • The RFC account possibly can be opened any time after the NRI’s revisit to India. This account is accessible in the main five currencies (USD, GBP, EURO, AUD, plus CAD).

Which bank gives more interest in RFC FD account?

Axis Bank, HDFC Bank, ICICI Bank, State Bank of India is the leading choices.

In which foreign currencies can Resident Foreign Currency account be maintained?

Resident Indians can maintain RFC or Resident Foreign Currency accounts in foreign currency. These accounts are particularly useful for NRIs or Non-Resident Indians who come back to India and would like to bring back overseas currency from their bank accounts in a foreign country.

How does NRIWAY support NRI Account Closure activities?

NRIWAY helps remittances from abroad to open NRE accounts in any changeable currency. NRIs can also open the accounts during the brief visits to India against NRIWAY’s tender.

 

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