Select the account scheme before selecting savings or current form
Under regulation 6 of the Foreign Currency Accounts Regulations, unless otherwise specified, an eligible individual’s foreign-currency account with an authorised dealer in India may take current, savings or term-deposit form. For other holders, the listed forms are current or term deposit. The provision also addresses single or joint holding in the name of eligible persons and preserves the specific EEFC treatment prescribed by RBI. It is not a general permission for every resident to open every type of foreign-currency account.
This article checks the consolidated regulation on 24 October 2026. Its scope is accounts with authorised dealers in India under these regulations. Do not apply this form rule as if it determines every overseas account, non-resident deposit scheme or IFSC permission. Identify residence, holder type, scheme, location and eligible source of funds first. The regulation 3 restriction and scheme-specific permission remain relevant.
A company cannot borrow an individual’s account-form menu
A resident company is a separate legal person from its director. A director’s individual eligibility does not turn company money into funds for that individual’s savings account. Likewise, a person who operates a company account under a mandate is not necessarily a joint beneficial account holder. Retain the account holder’s legal name, constitution, scheme and authorised signatory documentation as separate fields.
Regulation 6’s general menu does not promise that a bank offers every form commercially or that every scheme permits it. In particular, do not infer EEFC term-deposit or interest terms from the general menu while ignoring its express proviso. Scheme-specific restrictions and the bank’s actual permitted product need confirmation. A label such as “foreign currency savings” on an internal spreadsheet cannot establish legal eligibility.
Joint holding requires an eligibility analysis
The general joint-holding wording refers to persons eligible to open, hold and maintain the account. Relationship or convenience alone should not be substituted for that test. Specific schemes can contain particular permissions: for example, regulation 4(B)(3) permits resident relative joint holders for RFC accounts on a former-or-survivor basis. For this RFC permission, the resident relative cannot operate the account during the resident account holder’s lifetime; “relative” has the meaning in Companies Act section 2(77). Read that permission on its own terms; it is not universal authority for every scheme, every joint holder or every operation.
Keep holder, signatory and nominee records separate. A nominee’s eventual claim is not the same as present joint holding, and a mandate to transact does not change eligibility. For an account redesign or conversion, obtain bank confirmation of the actual process and preserve the existing balance trail. This article promises no automatic conversion facility, rate of interest or exemption from KYC.
Use a treasury register that cannot double count deposits
Record each legal account, currency, permitted form, holder, scheme, signatories, maturity and restrictions. Show a transfer between current balance and a deposit as a movement within that currency where appropriate, not fresh external earnings. Reconcile gross balance, liens, settlement movements and usable funds separately. The examples below use USD throughout and demonstrate control arithmetic, not statutory deposit minimums or investment advice.
Worked illustrations
These illustrations use fictional facts and expressly stated assumptions. Amounts are Indian rupees unless a different currency or unit is specified. They are independent examples, not findings about any actual client.
Illustrative example 1: Individual’s form choice
Assume an individual is independently eligible under a scheme that permits the general regulation 6 menu, and has USD30,000. Allocating USD10,000 to current form and USD20,000 to permitted term-deposit form reconciles to USD30,000. Eligibility and the scheme’s terms must already be satisfied.
Illustrative example 2: Company savings proposal
A company proposes USD15,000 current, USD5,000 savings and USD10,000 term deposit: total USD30,000. For an otherwise eligible non-individual account under the general menu, the USD5,000 savings proposal does not fit the listed forms. Obtain a compliant scheme/product solution; do not shift company funds into a director’s name.
Illustrative example 3: Internal deposit transfer
A permitted company current account has USD40,000. Moving USD12,000 to an eligible term deposit leaves USD28,000 current and USD12,000 deposit, still USD40,000 total. Reporting USD52,000 would count the transfer as new money.
Illustrative example 4: Joint title is not a second balance
An independently permitted joint account contains USD25,000. Showing the same USD25,000 under each of two holders would report USD50,000. Treasury must retain one USD25,000 account balance; joint title alone does not establish equal ownership shares.
Illustrative example 5: Signatories are not accounts
One permitted company account holds USD18,000 with three authorised signatories. The balance remains USD18,000, not USD54,000. The mandate does not create three personal accounts or three independent scheme entitlements.
Illustrative example 6: Restricted versus usable funds
A permitted deposit is USD20,000, of which a supported lien restricts USD6,000. Free amount is USD14,000, although the gross asset remains USD20,000. The reconciliation does not establish that release or withdrawal is legally permitted before bank clearance.
Ten-step verification table
| Step | Verification | Evidence to retain |
|---|---|---|
| 1 | Establish holder identity and residence | Constitution and FEMA residence evidence |
| 2 | Identify account location and dealer | Indian authorised-dealer account confirmation |
| 3 | Identify the governing scheme | Specific permission and eligible receipt category |
| 4 | Separate individual from non-individual | Legal holder classification |
| 5 | Check permitted account form | Regulation 6 and scheme-specific terms |
| 6 | Review EEFC or other special restrictions | Applicable RBI directions and bank confirmation |
| 7 | Verify every proposed joint holder | Eligibility and special joint-holder permission |
| 8 | Separate holders, nominees and signatories | Account title, nomination and mandate records |
| 9 | Reconcile balances and internal movements | Currency-wise account/deposit ledger |
| 10 | Monitor maturity and actual usable funds | Lien, release and bank settlement evidence |
Sixteen practitioner FAQs
1. Does regulation 6 independently authorise opening an account?
No. Establish underlying scheme eligibility first.
2. Can an eligible individual use the general savings option?
Subject to the scheme and any specific restriction, the general menu includes savings.
3. Is savings listed for companies in that general menu?
No. The non-individual menu lists current or term-deposit form.
4. Does a bank have to offer every listed form?
The regulation does not promise every commercial product at every bank.
5. Can company money simply be held in its director’s personal account?
Do not treat personal eligibility as company-account permission.
6. Does the general rule override the EEFC proviso?
No. Check the specific prescribed EEFC treatment.
7. Can any relative be added under every scheme?
No. Identify the actual joint-holder permission and eligibility.
8. What is the RFC relative-holder example?
Regulation 4(B)(3) permits resident-relative former-or-survivor holding, but the relative cannot operate the account during the resident account holder’s lifetime. “Relative” follows Companies Act section 2(77).
9. Is a signatory the same as a joint holder?
No. An operating mandate is a different legal role.
10. Is a nominee automatically a present joint holder?
No. Keep the roles distinct.
11. Does joint title double the treasury balance?
No. Record one balance for the legal account.
12. Does current-to-deposit movement create fresh earnings?
No. Reconcile internal movement without overstating funds.
13. Is a lien-free figure the same as gross deposit value?
No. Report the restriction separately from the gross balance.
14. Does this rule decide all overseas account forms?
No. This article concerns its stated Indian authorised-dealer account scope.
15. Is interest or automatic conversion guaranteed here?
No. Confirm the actual scheme and permitted bank product.
16. What prevents recurring treasury errors?
A register linking legal holder, scheme, form, currency, roles, restrictions and reconciled balances.
Conclusion
Keep scheme permission, account form and person eligibility in separate checks. Reconcile the actual legal accounts before presenting gross or usable foreign-currency balances.