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Originally posted by MKBLR

Can a dollar a/c be opened and kept in India? If so, can the $$ be repatriated back to Canada? I am seriously thinking abt this. Not sure which bank in India will do that. Scotiabank? It has branches in India.

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Most of us who live abroad would certainly like to have an account denominated to suit the area where we live so as not to get affected by the Currency Fluctuations. Hence the opening of an FCNR or the Foreign Currency Non-Resident Account. The Banks will normally ask you which currency you would like to hold it and the corresponding interest will be paid to you on your deposit.

As an example, if you hold it in Canadian Dollars, they might give you 2.02% https://www.hdfcbank.com/personal/interest-rates Only restriction is that it will be locked in for a minimum of one year and any early withdrawal will collapse the deposit and they will not pay you any interest, period, on such a deposit. All of this is subject to discussion and agreement. You can barter for some interest payment if it falls short of the year that they want you to lock it into. For some reason, the Banks will ask you to lock it into a Fixed Deposit. (In Canada they call it G.I.C.) http://en.wikipedia.org/wiki/Guaranteed_Investment_Certificate

A few of us will convert the same to a Rupee deposit and they will take about a rupee for conversion. Same way when you want to convert back into Canadian Dollar. Hence, you stand to lose Rs.2 in such a transaction. You can recover it over a period of time. But when you convert the same into Indian Currency, you subject yourself to the vagaries of the currency fluctuation. Hence, you will have to take advantage of the best time you want to pull the same out. All of this calls for the knowledge of the markets and some timely assistance from someone who is the in the know-how of things.

Say for instance you have Canadian Dollar to deposit and want to convert today, you might get Re51.28/CD. The same if you had the CD to deposit in the start of the month of September of 2013, you would have got Rs.64.57/CD. So, your gain today would have been Rs.13.29/CD, minus the exchange commission. Today the Canadian Dollar is gaining momentum and if you had done the conversion and want to get back into CD, then you would have made a few dollars in interest and also the currency gain of 13 rupees. Normally they will provide you with 8% interest per annum. It could be as high as 9.5% for seniors above 65 years of age.

So, working on this scheme, assuming that there is no currency fluctuation, if you leave it in there in Indian Rupees for a year, then, you will get 8% interest minus the loss of TWO Rupees in commission that you will lose in the exchange, which will be one Rupee per Dollar IN and One Rupee when you convert it back, on the way OUT, which will be 2/52 or about 4% loss out of the 8% Interest that they will pay. You will end up with 4% gain the first year. There is NO INCOME TAX on the money if you are an NRI. But there will be tax payable on the interest within Canada and you will have to include this 4% gain and pay taxes on it. Say, Re.1 out of the FOUR you calculated as the amount you made as Interest Income. Totally you would have made 3%/year on the whole deposit.

This is Basic Math and you should be able to follow it and it is easy to understand and it is posted to you here in layman's language.

Hope this helps.

FH.

if you are choosing a Bank, please do so and choose one that is close-by your residence here in Canada. You can choose a similar one in India if they are close to where you have some assistance or some relatives live nearby the bank.
There is another feature that you can look into, if you have returned back to India, which is R but N.O.R. or RNOR. This scheme of things is only good if you had lived outside of India for at least 10 years prior to re-entry.

* All of these are TAX Strategies and only a few get to know them. Now you also know the same.

Quote:

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Originally posted by MKBLR

Can a dollar a/c be opened and kept in India? If so, can the $$ be repatriated back to Canada? I am seriously thinking abt this. Not sure which bank in India will do that. Scotiabank? It has branches in India.

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From ICICI bank web site:

FCNR Fixed Deposit Account
Key Highlights

Earn high yields on foreign currency earnings.
Account available in a choice of 9 currencies : USD, GBP, EUR, JPY, CAD, AUD, SGD, HKD and CHF.
Principal amount and interest earned fully repatriable.
Interest earned is tax free in India.


Hope that answers your question!!

Quote:

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Originally posted by MKBLR

Can a dollar a/c be opened and kept in India? If so, can the $$ be repatriated back to Canada? I am seriously thinking abt this. Not sure which bank in India will do that. Scotiabank? It has branches in India.

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Its called FCNR , but you can only have it as a fixed deposit..its not going to be like a regular savings or chequing account ..it will be more like a GIC.

Its fully repatriable.

But if you are going back for good and become an Indian resident again then ..you can have a RFC savings account ..need not be a fixed deposit.

Quote:

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Originally posted by MKBLR

I am getting the hang of it, but still bit confused. Say can I issue a cheque for the Can$ from an RFC a/c to pay someone in Canada?

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Yes you can do that. check the link below..especially the withdrawal and remittances part.

http://articles.economictimes.indiatimes.com/2013-01-17/news/36394155_1_term-deposit-fcnr-nre

Nor sure how many banks in India have a RFC account in CAD $ , I have mostly seen them in these 4 currencies - USD , UK- British Pound Sterling , Euro , Japanese Yen..maybe some have them in CAD $ ..or some other foreign currency.

You can convert RFC to NRE account easily, if you come back to Canada again.

EDIT : Not sure but looks like NO cheque book or ATM card is issued with a RFC savings account, so the transfers might have to be done online .