What is an EEFC account?
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Short answer
An Exchange Earners' Foreign Currency (EEFC) account is a foreign currency account that a resident of India holds with an authorised dealer bank for foreign exchange earnings.2 Regulation 4(A) and Schedule I of the FEMA (Foreign Currency Accounts by a person resident in India) Regulations, 2015 provide for it.2 RBI says it is a non-interest-bearing current account.1
| Full form | Governed by | Who needs it | Where it is used | Related terms |
|---|---|---|---|---|
| Exchange Earners' Foreign Currency account | FEMA (Foreign Currency Accounts by a person resident in India) Regulations, 2015, regulation 4(A) and Schedule I2 | Residents of India who earn foreign exchange, including individuals and companies1 | Authorised dealer banks in India2 | Authorised dealer bank, forward contract, currency hedging, FIRA |
An Exchange Earners' Foreign Currency (EEFC) account lets an Indian service exporter keep foreign currency as foreign currency instead of converting every receipt to rupees on arrival.12
What does an EEFC account mean in simple words?
An EEFC account is a foreign currency account in India where a resident exporter can hold export earnings in the currency received, such as US dollars, euros or pounds.12 The EEFC account is a category of account set out in Indian foreign exchange law, and it is opened with an authorised dealer (AD) bank in India.2 Schedule I of the FEMA (Foreign Currency Accounts by a person resident in India) Regulations, 2015 allows a resident to credit 100 percent of eligible foreign exchange earnings to it.2
Why does an EEFC account matter for Indian exporters and freelancers?
An EEFC account matters for Indian exporters and freelancers because it lets them decide when to convert foreign earnings and lets them pay some foreign costs without converting twice.1
- Bank compliance: RBI's FAQ lists the permitted credits and debits, so the AD bank checks each entry against those lists.1
- Foreign costs: Payments outside India for permissible current account transactions are a permitted debit, which covers many foreign tools and subcontractors.1
- Currency risk: Holding foreign currency leaves the exporter exposed to rate moves until conversion.
Tax and accounting questions on EEFC balances depend on your facts, so confirm them with a chartered accountant.
How does an EEFC account work?
An EEFC account works as a current account in foreign currency, with credits and debits limited to the categories RBI lists.12
| Rule | What it says |
|---|---|
| Who can open | Persons resident in India who earn foreign exchange, including individuals and companies1 |
| Account type | Current account only; no interest1 |
| How much can be credited | Up to 100% of foreign exchange earnings12 |
| Permitted debits | Payments outside India for permissible current account transactions, and payments in foreign exchange to a person resident in India for goods or services1 |
| Rupee withdrawals | Allowed without restriction, but cannot be re-credited12 |
| Cheques | Cheque facility is available1 |
| Account form | As prescribed by RBI from time to time (regulation 6)2 |
How do you use an EEFC account as a service exporter?
You use an EEFC account by giving clients the account's inward remittance details, letting foreign currency build up, and converting or paying out as needed. Banks set their own account-opening requirements, so start with your AD bank.
- Paying foreign tools: For example, a UX designer billing in dollars holds receipts until she needs to pay for a foreign design tool, avoiding two conversions.
- Paying subcontractors: For example, a consulting firm pays an overseas subcontractor from its EEFC balance.
- Timing conversion: For example, a video editor converts to rupees only when the rate suits him.
What is the difference between an EEFC account and receiving export payments in rupees?
An EEFC account defers conversion, while receiving straight into a rupee account converts at the time of credit. In both cases the money is received into an account with an AD bank in India.2
| Option | When conversion happens | Currency risk | Best for |
|---|---|---|---|
| EEFC account | When the exporter chooses | Carried by the exporter until conversion | Exporters with foreign currency costs or who want to time conversion |
| Rupee account | At the time of credit | Ends at the time of credit | Exporters whose costs are all in rupees |
If you hold balances for long, read about forward contracts and currency risk management.
What do people get wrong about EEFC accounts?
People most often get wrong the interest position, the re-credit rule and the monthly conversion condition of EEFC accounts.1
- Interest: An EEFC account pays no interest, because it can be held only as a current account.1
- Re-crediting: Amounts withdrawn in rupees cannot be put back into the EEFC account.12
- Monthly conversion: RBI's FAQ (updated as on 5 July 2016) says the sum total of a calendar month's accruals should be converted into rupees on or before the last day of the following month, after adjusting for approved uses and forward commitments.1 Ask your bank how it applies this condition today, since banks run EEFC accounts under RBI's current directions.
Which terms are related to an EEFC account?
The terms related to an EEFC account cover the bank that runs it, the tools that manage currency risk and the records of each receipt.
- Authorised dealer bank: The bank in India that opens the account; see what is an authorised dealer bank.
- Forward contract: A way to fix a future conversion rate; see what is a forward contract.
- Currency hedging: The wider set of tools for rate risk; see what is currency hedging.
- FIRA: The advice that records each foreign credit; see what is a FIRA.
- Mid-market rate: A benchmark for judging your conversion rate; see what is the mid-market rate.
The full comparison of when an EEFC account helps is in EEFC account benefits for exporters.
How did we verify this?
We checked this page against the sources below on 30 October 2026. Read our methodology or report an error.
- [1]RBI: FAQs on Exchange Earner's Foreign Currency (EEFC) Account, updated as on 5 July 2016
- [2]RBI: Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2015, Notification No. FEMA 10(R)/2015-RB dated 21 January 2016, amended up to 9 October 2025 (regulations 2, 4(A) and 6, Schedule I)
Frequently asked questions
Does an EEFC account pay interest?+
No. RBI's FAQ on Exchange Earners' Foreign Currency accounts says an EEFC account can be held only as a current account and that no interest is payable on it.1 An exporter who keeps large foreign currency balances in an EEFC account should ask the authorised dealer bank what that means for idle funds.
Can a freelancer open an EEFC account?+
Yes, if the freelancer is resident in India. RBI's FAQ says all categories of foreign exchange earners, such as individuals and companies resident in India, can open an EEFC account.1 Banks set their own account-opening requirements, so a freelancer should ask the authorised dealer bank which documents it needs.
Can rupees withdrawn from an EEFC account be credited back to the EEFC account?+
No. Rupee withdrawals from an EEFC account are allowed, but amounts withdrawn in rupees cannot be re-credited to the EEFC account.12 An exporter who converts an EEFC balance to rupees should therefore keep in foreign currency whatever is needed for later foreign payments.
Can foreign software subscriptions be paid from an EEFC account?+
RBI's FAQ lists payment outside India for a permissible current account transaction as a permitted debit from an EEFC account, which can cover such payments.1 For example, a designer paying for a foreign design tool may use the EEFC balance. Confirm the specific payment with your bank before you set it up.
What money can be credited to an EEFC account?+
RBI's FAQ lists permitted credits to an EEFC account that include inward remittances through normal banking channels, advance remittances received towards export of goods or services, and professional earnings such as consultancy fees.1 Schedule I of the 2015 Regulations allows up to 100 percent of eligible foreign exchange earnings to be credited.2
This page is general information for Indian service exporters, not tax or legal advice. Rules change and outcomes depend on your facts, so confirm with a chartered accountant before acting.
Keep reading
What are the benefits of an EEFC account for Indian service exporters?
What an Exchange Earner's Foreign Currency (EEFC) account lets an Indian exporter do, what RBI does not allow, and when it saves money on foreign receipts.
RBI and FEMAHow can Indian service exporters manage currency risk?
Where exchange rate risk comes from for Indian service exporters and the tools RBI permits to manage it: invoice currency, forwards, options and exchange-traded futures.
RBI and FEMAHow does a forward contract work for an Indian exporter?
How a forward contract fixes the rupee rate on a future export receipt, what RBI requires from October 2026, and what happens on delivery, rollover or cancellation.
GlossaryWhat is an Authorised Dealer (AD) bank?
An Authorised Dealer bank is a bank RBI has authorised under FEMA to deal in foreign exchange. What it does for Indian service exporters from 1 October 2026.