What is an RFC account and why should a returning NRI open one?

A Resident Foreign Currency account is designed exactly for people moving back to India after being non-resident. When you return and lose NRI status, you can no longer hold NRE or FCNR accounts, but an RFC account lets you keep your repatriated foreign earnings in foreign currency (like US dollars) rather than being forced to convert everything to rupees at once. The balance is freely usable and, importantly, freely re-remittable abroad if you later move overseas again or need dollars for foreign expenses like a child's US education. Interest may be taxable in India depending on your residential status stage (RNOR versus ordinarily resident). Opening an RFC preserves currency flexibility and avoids locking in an unfavorable exchange rate the moment you land.