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Is current account necessary for receiving payment in foreign currency


Date: 27 Nov 2014   Posted By: Vandana     Group: Finance & Banking    Category: Banking   

Many publishers in India are receiving payment in a foreign currency, generally US$, for earnings generated through some monetization program at their blog or website. My friend is earning in this way and wanted to open an account to receive this payment in a bank where the transaction fee is minimal. He was told by the Bank manager that the earnings credited comes under the title of a business transaction and hence a current account would be necessary. My friend wants to know whether it is mandatory to have such payment credited to a current account and not a savings account? Blogging and having a website are surely freelance work and not businesses as such. So why then is the manager insisting on having a current account?

Do we need to have a current account to receive fund from abroad? What are the reasons we need a current account instead of a savings account? Find the answers here.


Author: Tony John    28 Nov 2014      Member Level: Diamond     Points : 8  (Rs 8)    Voting Score: 0

It is not mandatory to have a current account to receive foreign money. You can receive foreign fund in regular savings accounts and especially through NRI accounts.

Current accounts are usually for business transactions with no limits on the number of transactions or amount. Most savings accounts have certain limits on the number of transactions you can make per month. Also, there are limits on how much money you can withdraw per day even if you have fund in your accounts.

Current accounts are meant for business transactions. You can do any number of transactions and withdraw/deposit any amount of money, as long as you have the fund. Current accounts can be opened for individuals as well.

If you are regularly receiving foreign payments as part of a business like blogging or AdSense income, it is better to have a current account. I recommend you separate your business transactions from your personal transactions. Have a savings account for your personal transactions and a separate current account for all income/expenses related to your business.


Author: Ankit    29 Nov 2014      Member Level: Gold     Points : 4  (Rs 4)    Voting Score: 0

I have heard small SBI branches asking for this. However, majority of us including me receive money in our savings account only. When you receive the payment, the branch manager might bug you again.

First try to tell him that this is not a business transaction, the money for which is received in current accounts. Those transactions are actually income tax exempted which in this case it is not!

If even then he insists, you can open a current account for this purpose.


Author: Vandana    29 Nov 2014      Member Level: Gold     Points : 2  (Rs 2)    Voting Score: 0

Actually the bank did insist even when my friend told the manager it not a business as such.

As per the second response above, a savings account is good enough. However, I came across an article here at Techulator, which was very useful. In that, it does advise that it is best to have a current account if one is earning good online income regularly of more than US$100 and expect it to grow. Refer: Tax savings tips for Indian AdSense publishers





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