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The Reserve Bank of India has allowed for the Exchange Earners Foreign Currency Account (EEFC) to be a method for foreign earned income to be housed in an account with banks in the country.
It was primarily created to help exporters and individuals manage earnings from abroad in non-rupee currencies. But only residents of India, which means those who are in the country more than 182 days, are eligible to open an EEFC account.¹ Let’s take a deeper look into EEFC and what it means.
|If you are looking for a simple and easy way to transfer money directly into rupees in an Indian bank account, look no further than Wise
An Exchange Earners Foreign Currency Account is a bank account offered in India for those that are based in India but are earning from abroad. Many exporters fall into this category but the account is open to companies, individuals and joint account holders.
Basically, Indian banks offer this non-interest bearing current account in specific currencies. If you get income from abroad in one of those currencies, that income can remain in that currency but in an Indian bank account. You can also hold multiple currencies in one account.
You can then choose when you want to convert it into rupees or hold it in the foreign currency during a certain period. However, once you withdraw rupees from the account, you are not able to convert the rupees back into the original currency and deposit back into the account. But one large caveat is that the total sum of the amount in the account will be converted to rupees on the last working day of the succeeding calendar month.²
Most major banks in India offer an EEFC account, but the currencies and offerings can differ between them. Here are the currencies offered by the major banks:
|Currencies available for EEFC accounts
|AUD, CAD, CHF, EUR, GBP, HKD, JPY, SGD, USD³
|USD, GBP, EUR⁴
|USD, Euro, GBP, JPY, CHF, SGD, CAD AUD, AED NXD, SEK, SAR, HKD, THB, KWD, SAR, NOK⁵
|USD, GBP, EURO, AUD, CAD⁶
Axis Bank and SBI offer EEFC type accounts but it is better to speak to the bank first to confirm it as an available product.
You can send money from earnings abroad to an EEFC account in India as a remittance. But how you get that money into your account can really make a difference in your earnings. If you have the wrong partner, the costs can really add up with your money transfer fees.
Often money transfer services can cost you in two main ways, first by high transaction fees and secondly with a hidden fee in the exchange rate. Banks can also make transfers expensive through high SWIFT fees and transaction fees. Then on top of that, they give you a weaker exchange rate than the rate they use themselves. In that way, they are able to take a cut of every conversion. So if you are moving money to your EEFC account, you can get hit twice by the banks or old money transfer partners.
Wise offers something brand new. With smart technology, Wise is able to transfer money to and from India for just one low fee. And all at the mid-market exchange rate, that’s the rate the banks use themselves.
Whether you are moving money into an EEFC account or wanting to deposit money directly into a local Indian account or account abroad, you can do it all with Wise. With fast, easy and secure transfers, you can transfer money into India or to over 59 currencies around the globe. And in every transaction, you will always get the mid-market exchange rate and all you have to pay is one low transfer fee.
And if you’re on the go, you can make transfers straight from your phone with the Wise award-winning app. EEFC makes it easier for foreign earnings to be housed in India, but Wise makes it easier for you to transfer money anywhere in the world. Sign up for Wise’s free account today and start saving money today.
Sources used for this article:
All sources checked as of 16 March, 2020
This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.
We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.
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