Before I left Sri Lanka, my bank manager at Commercial Bank sat me down and gave me a lecture.

“Putha,” he said, “Don’t just send money to your normal savings account. Open an NRFC.”

At the time, I was too busy packing and stressed about visas to pay attention. I just wanted to leave. I thought it was just another complicated bank product I didn’t need.

I was wrong. Ignoring that advice cost me money.

If you are earning in Pounds, Dollars, Dirhams, or Australian Dollars, dumping your savings straight into a standard Sri Lankan Rupee (LKR) account is often a mistake.

Here is the simple guide to what an NRFC account is, why it matters, and why it’s the secret weapon of smart expat Sri Lankans.

What is an NRFC Account?

 

NRFC stands for Non-Resident Foreign Currency account. (Some banks have rebranded them as “Personal Foreign Currency” or PFC accounts, but it’s the same thing).

It is very simple: It’s a bank account held in Sri Lanka, but the money sits in foreign currency.

If you send £1,000 to a normal account, it instantly turns into ~Rs. 400,000. If you send £1,000 to an NRFC account, it stays as £1,000.

The Problem: The Melting Rupee

 

Why does this matter? Because of inflation and devaluation.

We all know the history of the Sri Lankan Rupee. In 2020, £1 got you Rs. 230. Today, it gets you over Rs. 400.

If you sent money home in 2020 and kept it in Rupees, that money is now worth significantly less in global terms. You lost nearly half your buying power just by letting it sit there.

By converting your hard-earned foreign cash into LKR immediately, you are exposing your life savings to the volatility of the Sri Lankan economy.

The Solution: The NRFC Shield

 

An NRFC account protects you. Here are the three massive benefits:

1. Protection from Devaluation Your money sits in USD, GBP, AUD, or EUR. If the Sri Lankan Rupee crashes tomorrow, your savings remain safe because they aren’t held in Rupees.

2. Tax-Free Interest (Usually) Historically, interest earned on NRFC accounts in Sri Lanka has been free from certain taxes that apply to normal Rupee savings. The government wants you to keep foreign currency in the country, so they incentivize it.

3. High Interest Rates Because Sri Lanka is desperate for foreign currency, banks often offer very attractive interest rates on USD or GBP fixed deposits held within an NRFC—rates that are often much higher than you’d get from a high-street bank in London or Sydney.

(Note: Always check current rates with HNB, Sampath, Commercial, NDB, etc., as they change monthly).

When Should You Use It?

 

• Don’t use it for daily expenses: If you are sending Rs. 50,000 to your parents for groceries, just send it straight to their Rupee account using Wise or Remitly.

• DO use it for long-term savings: If you are saving to build a house in five years, or saving for your eventual return to Sri Lanka, put that money in an NRFC.

How to Open One

 

This is the tricky part. It is easiest to open one before you leave Sri Lanka, in person at your branch. You just need your passport and visa copy.

If you are already abroad, it is harder. Some major banks allow you to apply online, but you often need to get documents certified by the Sri Lankan embassy in your current country, which is a hassle.

My advice: Next time you visit home for a holiday, make a trip to the bank your priority. Open an NRFC, activate online banking, and start building a safety net that won’t melt away.