Skip to main content

RFC account

RFC account

 

Resident foreign currency account can be used by resident Indians and NRIs who have permanently settled in India after staying overseas for at least one year to maintain foreign currency deposits.


The decision to return requires planning, especially the finances and Resident Foreign Currency (RFC) Account is an ideal vehicle for NRIs' to park their funds in foreign currency in India and avail off its advantages once they actually return to the country. In the following sections we dwell on the attributes which are specific to the account in the context of NRIs' returning to the country. Opening an RFC Account: Who is eligible?The following sets of people are eligible to open an RFC account:ü Any resident Indian can open an RFC account in any freely convertible foreign currencyü NRIs' who have stayed abroad for a continuous period of 1 year or more and have returned to IndiaAuthorized dealers and banks provide assistance in the opening of an RFC account. Existing FCNR or NRE accounts can be converted to RFC account as per the discretion of the account holder. In which foreign currencies can RFC account be maintained?As already stated, RFC account can be opened in any freely convertible foreign currency. Currencies like AUD, CAD, Euro, GBP, JPY, USD, etc qualify for an RFC account. What kind of interest rates can be expected out of an RFC account? RFC accounts can be maintained in the form of:>> Term Deposits>> Current Accounts>> Savings Accounts Interest rates, per se, vary on term and currency. As a benchmark case, at present, an RFC term deposit account maintained for 1 year or more in US dollar carries an interest rate of 2.5% to 3.0 %. What are the tax implications for interest credited in RFC Account?The interest credited on a quarterly basis in the RFC account balance is taxable. However, if the status of the account holder is that of a Resident and he or she does not qualify as an Ordinary Resident then he is exempt from tax payment for the interest earned on the RFC account. What kind of funds can be deposited in the RFC account?The sources of Funds which can be deposited in an RFC account are specified below:>> Funds kept in foreign bank account in foreign currency, which has been earned through the conduct of some business or by way of employment abroad.>> Any money in the form of Superannuation, pension etc. received by a NRI from a foreign employer.>> Foreign exchange received on account of sale of assets including shares, bank account, immovable property and investments held by the individual outside India.>> Any income earned from assets held abroad such as interest income and dividend .>> On attaining the status of a resident Indian, funds from FCNR or NRE account can be deposited in the RFC account and in such cases no penalty is levied on the premature withdrawal of FCNR or NRE account.>> Foreign currency notes of different denominations brought from a foreign nation. In cases where the valuation of such foreign currency notes exceeds $5000 or the total value of notes and Travelerscheque is over $10,000,a Currency Declaration Form (CDF) has to be submitted to the customs authorities. The form has to be produced at the bank for endorsement at the time of account opening or depositing money into the RFC account. For what purpose RFC account balance can be used?The balance maintained in an RFC account can be utilized for making investments or for remitting money abroad. RFC account balance can also be used for making payments and investments in India.
---------------------------------------------
Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015

You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds

1. ICICI Prudential Tax Plan

2. Reliance Tax Saver (ELSS) Fund

3. HDFC TaxSaver

4. DSP BlackRock Tax Saver Fund

5. Religare Tax Plan

6. Franklin India TaxShield

7. Canara Robeco Equity Tax Saver

8. IDFC Tax Advantage (ELSS) Fund

9. Axis Tax Saver Fund

10. BNP Paribas Long Term Equity Fund

Invest in Tax Saver Mutual Funds Online -

Invest Online

Download Application Forms

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

---------------------------------------------

Leave your comment with mail ID and we will answer them

OR

You can write to us at

PrajnaCapital [at] Gmail [dot] Com

OR

Leave a missed Call on 94 8300 8300

---------------------------------------------

Invest Mutual Funds Online

Invest Any Mutual Fund Online

Download Mutual Fund Application Forms from all AMCs

Download Mutual Any Fund Application Forms

Popular posts from this blog

All about "Derivatives"

What are derivatives? Derivatives are financial instruments, which as the name suggests, derive their value from another asset — called the underlying. What are the typical underlying assets? Any asset, whose price is dynamic, probably has a derivative contract today. The most popular ones being stocks, indices, precious metals, commodities, agro products, currencies, etc. Why were they invented? In an increasingly dynamic world, prices of virtually all assets keep changing, thereby exposing participants to price risks. Hence, derivatives were invented to negate these price fluctuations. For example, a wheat farmer expects to sell his crop at the current price of Rs 10/kg and make profits of Rs 2/kg. But, by the time his crop is ready, the price of wheat may have gone down to Rs 5/kg, making him sell his crop at a loss of Rs 3/kg. In order to avoid this, he may enter into a forward contract, agreeing to sell wheat at Rs 10/ kg, right at the outset. So, even if the price of wheat falls ...
Read more

Zero Coupon Bonds or discount bond or deep discount bond

A ZERO-COUPON bond (also called a discount bond or deep discount bond ) is a bond bought at a price lower than its face value with the face value repaid at the time of maturity.   There is no coupon or interim payments, hence the term zero-coupon bond. Investors earn return from the compounded interest all paid at maturity plus the difference between the discounted price of the bond and its par (or redemption) value. In contrast, an investor who has a regular bond receives income from coupon payments, which are usually made semi-annually. The investor also receives the principal or face value of the investment when the bond matures. Zero-coupon bonds may be long or short-term investments.   Long term zero coupon maturity dates typically start at 10 years. The bonds can be held until maturity or sold on secondary bond markets.
Read more

Mutual Fund MIPs can give better returns than Post Office MIS

Post Office MIS vs  Mutual Fund MIPs   Post office Monthly Income Scheme has for long been a favourite with investors who want regular monthly income from their investments. They offer risk free 8.5% returns and are especially preferred by conservative investors, like retirees who need regular monthly income from their investments. However, top performing mutual fund monthly income plans (MIPs) have beaten Post Office Monthly Income Scheme (MIS), in terms of annualized returns over the last 5 years, by investing a small part of the corpus in equities which can give higher returns than fixed income investments. The value proposition of the mutual fund aggressive MIPs is that, the interest from debt investment is supplemented by an additional boost to equity returns. Please see the chart below for five year annualized returns from Post office MIS and top performing mutual fund MIPs, monthly d...
Read more

Benefits Of Repo Rate & CRR Rate Cut On Consumers

  How Reduction In Repo Rate & CRR Affects Customers Finally  RBI announced slashing of repo rate by 25 basis points (bps ) and cash reserve ratio (CRR) by 25 bps which industry experts believe will fuel the economic growth to some extent. Although experts were expecting higher rate cut this year. This lowering of the rate cuts has taken place for the first time in nine months. Now let's see how reducing the repo rate (defined in economic term as the rate at which RBI lends money to the banks) relates to the following individuals and sectors: Banking:   Lowering of repo rate directly reduces borrowing costs of a bank. Banks in turn reduces interest rates on different types of loans such as home, auto, business etc. Similarly trimming down of CRR allows banks to unlock money for lending to the customers i.e. with 0.25 rate cut banks are estimated to lend more than INR. 17 Crores. Consumers:   Lower repo rate does not necessarily benefit existing loan borrowers but new loan se...
Read more

NRI Corner: The process of remittances abroad

The process of remittances abroad, and back, is cumbersome. Here’s how you can wade through without hassles Approach The Right Place Outward remittances or the process of sending money abroad is governed by many regulations. In India, outward remittances are made mainly through banks. At the outset, you need to remember that you just cannot trust any individual or a financial firm with the responsibility of sending your money. Experts recommend that you should always try to choose a bank with an international footprint, which will make your job easier. Choose Mode Of Transfer The next step is to choose the mode of transfer. One option is to get a Foreign Currency Demand Draft ( FCDD ). This draft will be denominated in foreign currency and should be drawn in favour of the recipient/ beneficiary. The beneficiary does not necessarily need to have an account with the same bank. The other option is to send money via wire transfer. Do not be puzzled if the bank official uses the word SWIFT ...
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now