Foreign Currency Account in India: Types & How to Open
TL;DR - Summary
- What is a foreign currency account in India? A bank account that holds eligible funds in a foreign currency, under account-specific rules. Virtual receiving details are different: - they collect payments for INR settlement.
- What are the types of foreign currency accounts in India? - EEFC, RFC, RFC(D), FCNR(B), DDA, SEZ and special-purpose bank accounts. Virtual receiving accounts are a separate collection service, not deposits.
- Who is eligible to open each type of foreign currency account in India? - Eligibility depends on residency, the source of funds and trade-specific rules. EEFC serves eligible resident earners; RFC serves residents with qualifying receipts; new FCNR(B) deposits serve eligible NRIs and PIOs.
- How do you open a foreign currency account in India? - Choose an eligible account, apply through the bank’s supported channel and complete documentation and KYC. Virtual receiving details are set up online after verification.
What Is a Foreign Currency Account in India?
A foreign currency bank account holds eligible funds in USD, EUR or another supported currency, subject to its rules. Virtual receiving details, such as Skydo’s, collect overseas payments for INR settlement to your linked Indian bank account.
Resident Indians who earn foreign currency through exports or freelance work use these accounts. So do returning Non-Resident Indians (NRIs) who want to protect savings from exchange-rate fluctuation, and businesses with recurring international transactions.
Example: a Bengaluru exporter receives $5,000 into EEFC. It can make permitted payments or convert to INR, but unutilised monthly accruals must follow the next-month-end conversion rule.
Who Can Open a Foreign Currency Account in India?
Your residency, source of funds and business activity decide which account you can open:
- EEFC Account: Open to eligible resident foreign-exchange earners, including merchandise exporters, service exporters and freelancers. SEZ units use separate foreign currency accounts instead.
- RFC Account: For residents with qualifying foreign-exchange receipts, including returning NRIs and eligible recipients of inherited or gifted overseas assets.
- FCNR(B) Account: Open to eligible NRIs and PIOs for foreign-currency fixed deposits with terms of one to five years.
- SEZ Foreign Currency Account: Available to SEZ units for permitted trade with residents and non-residents, subject to restrictions on credits and use of funds.
- Diamond Dollar Account (DDA): For qualifying diamond, gemstone and precious-metal jewellery firms with at least three years’ relevant import/export history and ₹3 crore average annual turnover over the preceding three licensing years. Other scheme conditions apply.
- Special Purpose Foreign Currency Account: For eligible shipping or airline agents, ship or crew managers, and travel agents with overseas tie-ups. Permitted receipts and payments are restricted.
What Are the Types of Foreign Currency Accounts in India?
The bank options include EEFC, RFC, RFC(D), FCNR(B), DDA, SEZ and sector-specific accounts. Virtual receiving details are a separate payment-collection option, not deposits.
- Diamond Dollar Account: A USD-only, non-interest-bearing current account for firms meeting the trade, turnover and other scheme rules.
- SEZ Foreign Currency Account: For permitted trade by SEZ units. Foreign exchange purchased in India against rupees needs prior RBI permission to be credited. Funds cannot be lent or made available to resident entities outside SEZs.
- Special Purpose Foreign Currency Account: Restricted-purpose accounts for eligible shipping or airline agents, ship or crew managers, and travel agents with overseas hotel or agent tie-ups.
- Virtual Foreign Currency Account: Providers such as Skydo give eligible exporters local or SWIFT receiving details. Proceeds settle in INR to a linked Indian bank account; they are not retained as a foreign-currency deposit.
EEFC Account (Exchange Earners' Foreign Currency Account)
An EEFC account can receive 100% of an eligible resident’s foreign-exchange earnings through normal banking channels. Loans and investments do not count as eligible earnings.
EEFC earns no interest. Monthly accruals must be converted to INR by the last day of the following calendar month, after approved use or forward commitments. Permitted debits include eligible overseas payments, specified payments to Indian residents and rupee withdrawals. Rupee withdrawals cannot be re-credited.
RFC Account (Resident Foreign Currency Account)
RFC lets residents retain qualifying overseas employment benefits, assets brought back after non-residence, eligible inherited or gifted overseas assets, and specified foreign-currency insurance proceeds.
RFC accounts can be maintained in major foreign currencies. They protect the holder's overseas savings from being immediately converted to INR.
FCNR Account (Foreign Currency Non-Resident Account)
FCNR(B) is a foreign-currency fixed deposit for eligible NRIs and PIOs, with terms of one to five years. It avoids conversion into INR during the term, not exchange-rate risk against other currencies.
FCNR(B) interest is exempt from Indian income tax for qualifying non-resident or resident-but-not-ordinarily-resident holders. The exemption is not unconditional after returning to India.
⚠️ COMMON MISCONCEPTION
You do not need EEFC just to receive export payments. Skydo’s virtual receiving details collect payments for INR settlement to your linked Indian bank account, after KYC and document verification.
How Do These Foreign Currency Accounts Compare?
Compare the account’s eligibility, currencies, interest and conversion rules below. EEFC and DDA have monthly conversion requirements; RFC and FCNR(B) do not share that deadline. Virtual receiving details collect payments for INR settlement, not currency retention.
| Account Type | Who Can Open | Currencies Supported | Interest Earned? | Conversion to INR Required? | Ideal Use Case |
|---|---|---|---|---|---|
| EEFC | Eligible resident foreign-exchange earners; excludes SEZ units | Major foreign currencies | No | Monthly accruals: by next calendar month-end, after approved use or forward commitments | Holding export earnings short-term |
| RFC | Residents with qualifying receipts, including returning NRIs | Major foreign currencies | Yes (on deposits) | No | Protecting overseas savings post-return |
| FCNR(B) | NRIs / PIOs (residing abroad) | Major foreign currencies | Yes (fixed deposit) | No | Foreign-currency fixed deposit; Indian tax exemption depends on tax residence |
| Diamond Dollar Account | Qualifying firms: 3-year trade history; ₹3 crore average turnover over prior 3 licensing years; other rules apply | USD only | No | Monthly accruals: by next calendar month-end, after approved use or forward commitments | Permitted diamond, gemstone and jewellery payments |
| SEZ Foreign Currency Account | SEZ units | Foreign currencies | No (current-account product) | No EEFC-style deadline; permitted-use restrictions apply | Permitted SEZ trade |
| Virtual receiving account (e.g. Skydo) | Eligible exporters, subject to KYC | Local: USD, GBP, AED, CAD, EUR, AUD, SGD; separate SWIFT route: 32 currencies | No | Settled in INR; not retained on request | Collecting export payments for INR settlement |
Skydo offers free virtual USD, EUR, and GBP accounts for eligible export-payment collection, with transparent transaction fees and a free automated Foreign Inward Remittance Advice (FIRA). Proceeds settle in INR after the required checks.
Which Foreign Currency Account Is Right for You?
Choose based on residency, source of funds and whether you need foreign-currency retention or INR settlement. The decision path below separates these needs.
Follow the path that matches your situation:
- Resident exporter or freelancer: Consider EEFC for permitted currency retention. It earns no interest; monthly accruals must be converted by next month-end after approved use or forward commitments. Consider Skydo for digital collection and INR settlement after KYC.
- Specialized trades: Check DDA’s trade, turnover and other conditions. SEZ units use dedicated accounts for permitted trade. Eligible shipping, crew-management and travel businesses have restricted-purpose accounts.
- NRI or PIO residing abroad: Consider an FCNR(B) fixed deposit. On becoming resident in India, check whether your funds qualify for an RFC account; existing FCNR(B) deposits may continue until maturity.
How to Open a Foreign Currency Account in India?
Choose an eligible bank account and apply through its supported channel. Virtual receiving details follow a separate online verification process.
For a traditional bank account such as EEFC at ICICI, SBI, or HDFC, the usual steps are:
- Choose the right account type.
- Approach an authorised dealer bank that offers the account.
- Submit the required documents.
- Complete KYC.
- Wait for the bank to approve and activate the account.
An EEFC account typically requires these documents:
- Proof of identity
- Proof of address
- Business registration documents (for exporters)
- Evidence of foreign exchange earnings, such as invoices or export contracts
For virtual receiving details through Skydo, the steps are:
- Register online.
- Submit the required KYC and business documents, and link your Indian bank account.
- After verification, access your supported virtual receiving details and share the right details with your client.
- Start receiving eligible export payments for settlement in INR to your linked Indian bank account.
SBI and HDFC offer foreign currency accounts through their trade finance or NRI services. Opening channels and timing vary; branch visits are not always required. For example, SBI accepts FCNR(B) requests through internet banking. These deposits differ from virtual collection details used for INR settlement.
Before approaching a bank, confirm whether the account type you need (EEFC, RFC, FCNR) is available at that specific branch. Not all branches handle trade finance accounts.
What Does a Foreign Currency Account Actually Cost in India?
Compare any opening or maintenance fees, conversion spread, transfer charges, intermediary deductions and taxes for your account and payment route.
A conversion spread is the gap between a reference market rate and the customer rate, which can differ by bank, currency, amount and negotiated terms. Ask for a live all-in quote rather than assuming a fixed percentage.
On a SWIFT wire transfer, intermediary banks may also deduct their own fees from the transferred amount before it reaches your account. You then receive less than what was sent.
Skydo charges per transaction, with no monthly fee or FX markup. Its standard transaction fees are:
- Up to $2,000 per transaction: $19 plus 18% GST on the fee.
- $2,001 to $10,000 per transaction: $29 plus 18% GST on the fee.
- Above $10,000 per transaction: 0.3% plus 18% GST on the fee. Amazon Global Selling has separate pricing.
For illustration, a 3% spread on $3,000 costs $90 before other charges. This is an assumed rate, not a typical bank quote. Skydo’s standard fee is $29 plus 18% GST, or $34.22; Amazon Global Selling pricing differs.
✅ PRO TIP
Compare your bank’s total cost, including the spread, transfer fees and intermediary deductions, against Skydo’s applicable transaction fee plus GST. Check the cost at your usual payment size; a flat fee is not always cheaper.
How Does Skydo Work as a Foreign Currency Account for Freelancers and Exporters?
With traditional bank accounts, check the route, settlement terms and document charges. eBRC generation and EDPMS closure are separate workflows, with roles for the exporter and relevant bank.
Skydo gives eligible exporters virtual receiving details for overseas payments and settles proceeds in INR to their linked Indian bank account. It is not a foreign-currency holding account.
- Free virtual receiving details: Local payments in USD, GBP, AED, CAD, EUR, AUD and SGD; a separate SWIFT account supports 32 currencies. Receiving payments depends on KYC and document verification.
- Pricing: $19 for payments up to $2,000, $29 for $2,001–$10,000 and 0.3% above $10,000, plus 18% GST on the transaction fee. There is no FX markup or monthly fee. Amazon Global Selling pricing differs.
- Free FIRA: Automatically generated for each payment. Keep it with your export records. FIRA is not FIRC; GST refund claims may require BRC or FIRC and other evidence, depending on the claim.
- eBRC generation assistance: Link your DGFT account, upload shipping bills and map IRMs. Banks transmit IRMs to DGFT; exporters self-certify eBRCs against their export details.
- EDPMS closure assistance: Help with reconciliation and closure. The relevant AD bank still matches the remittance and updates or closes applicable records using your documents.
- Settlement: Skydo aims for T+1 to T+3 business days after successful screening and compliance checks. Currency, corridor and institutional processing affect timing; one-working-day credit is not guaranteed.
- Support: Skydo offers dedicated India-based support.
- Best suited for: Eligible exporters, freelancers and Amazon sellers, subject to KYC and transaction rules. Amazon Global Selling pricing differs.
💡 QUICK INSIGHT
Digital signup can take minutes, but receiving payments depends on KYC and document verification. Compare account features as well as opening speed.
What are the types of foreign currency accounts in India?
Bank options include EEFC, RFC, RFC(D), FCNR(B), DDA, SEZ and special-purpose accounts. Eligibility and permitted uses differ. Virtual receiving accounts such as Skydo’s are a separate collection service for INR settlement, not currency retention.
Who is eligible for an RFC account?
What are the drawbacks of an FCNR account?
Which banks in India offer foreign currency accounts?
Can a resident Indian open a foreign currency account?
Is a foreign currency account the same as an NRE or NRO account?
Do I need a foreign currency account to receive international payments legally in India?
What documents are needed to open an EEFC account?
