- Money will be held as TERM DEPOSITS for periods from twelve months up to five years.
- Interest rates will be as follows:
- RFC deposits of 12 months up to 60 months will be charged with the same interest rates as FCNR DEPOSITS (No interest will be paid for premature payment before12 months).
- Funds may be held in USD AND/OR GBP currencies
- if the NRI has been abroad for a continuous period of 24 months, whence he will get exemption for subsequent nine years after which he will be known as Resident and Ordinarily Resident in Income Tax parlance.
- During the nine years he will be known as resident but not Ordinarily Resident and thereby claim Income Tax Exemption on RFC.
Ordinary Non- Resident Accounts
Ordinary non-resident accounts will be converted to resident accounts by banks in India on return of the account holder to India and consequently becoming a legal resident of India.
Non-Resident (External) Rupee Accounts
NRE accounts will also be converted to resident rupee accounts or RFC accounts (if eligible) at the option in of the account holder on the return of the account holder to India and their becoming legal residents in India. In case of NR(E) Fixed Deposit, the accounts will continue to earn agreed rate of interest till maturity even after these being converted to resident account.
FCNR accounts will be converted to resident rupee accounts or RFC account (if eligible) at the option of the account holder on the return of the account holder to India and their becoming residents in India.
In case the account is converted to resident rupee account, the foreign currency amount will be converted to Indian Rupees at TT buying rate ruling on the day of conversion. Interest on the new deposit would be payable at the relevant rate applicable on such deposit.
In case the amount is transferred to a RFC account, the rate of interest applicable to RFC account will be payable.
You can also open RFC account with the ASSETS brought by you on return as well as your foreign assets held abroad at any future date, should you so desire. Your present NRI accounts will be re classified and called RFC accounts while the continuity of the deposit will be maintained till maturity date of the deposit.