Understanding the Practical Uses and Applications of Bank NRA and FTN Accounts

Understanding the Functions and Applications of NRA and FTN Accounts in Banking

In today’s globally integrated economy, cross-border financial flows have become increasingly common. More and more businesses and individuals are paying attention to how to manage and settle overseas funds efficiently. In this context, NRA Non-Resident Account and FTN Free Trade Non-resident Account have emerged as key tools in cross-border financial services due to their unique advantages. This article explores the functions, use cases, and practical differences between these two accounts, based on recent developments in the financial industry.

What Are NRA and FTN Accounts?

Let’s start by clarifying the basic definitions of these two accounts

NRA Account Non-Resident Account This is a Renminbi RMB or foreign currency account opened by overseas entities or individuals at a Chinese bank. It is mainly used by foreign entities that do not have a registered company in China but have a need for RMB settlement.

FTN Account Free Trade Non-resident Account This is a multi-currency account opened by overseas entities at banks within Chinese Free Trade Zones FTZs. Compared to NRA accounts, FTN accounts offer greater flexibility in cross-border transactions and more freedom in fund management, thanks to the favorable policies in FTZs.

Functions and Use Cases of NRA Accounts

An NRA account is typically used by foreign companies that open an account at a mainland Chinese bank for receiving or making RMB or foreign currency payments. Its main functions include

1. Cross-border payments and receipts Used to receive payments such as goods payments and service fees from domestic companies.

2. Currency exchange Funds in the account can be converted between RMB and foreign currencies.

3. Interest income The account balance earns interest from the bank.

4. Limited fund transfers Funds can be transferred to overseas accounts within policy limits.

Use Cases

Foreign companies without a legal entity in China but needing RMB settlement with domestic businesses.

Overseas investors managing RMB assets.

Foreign companies operating representative offices in China without independent legal entities.

E-commerce platforms or foreign trade companies handling part of their settlement through NRA accounts.

For example, in 2025, a cross-border e-commerce platform optimized its international payment process by using an NRA account. It simplified a previously complex multi-currency exchange system into a single RMB-based settlement, significantly reducing exchange rate risks.

Functions and Use Cases of FTN Accounts

The FTN account is a major innovation from financial reforms in Chinese free trade zones. Compared to the NRA account, it offers greater flexibility in cross-border capital flows, account management, and interest rate liberalization. Its main functions include

1. Integrated RMB and foreign currency management One account can manage both RMB and multiple foreign currencies.

2. Free fund transfers Funds can be freely transferred to overseas accounts subject to regulatory compliance.

3. Convenient cross-border financing Supports cross-border financing activities for enterprises.

4. Market-determined interest rates Banks can set deposit rates independently, often higher than those of regular accounts.

5. Cross-border investment capabilities Eligible companies can use FTN accounts to participate in China’s domestic capital markets.

Use Cases

Foreign enterprises or multinational corporations registered in FTZs.

Companies with cross-border investment and financing needs.

Businesses requiring centralized management of multiple currencies.

Enterprises involved in trade with countries along the Belt and Road Initiative.

In early 2025, a large multinational manufacturing company opened an FTN account in the Hainan Free Trade Port. It successfully centralized global fund management, improving capital efficiency and reducing foreign exchange risk exposure. The company used the FTN account to transfer funds between its subsidiaries in Southeast Asia and Europe, cutting processing time by nearly 70% compared to the past.

Key Differences Between NRA and FTN Accounts

Although both accounts are designed for overseas entities, they differ significantly in functionality and application

Comparison Dimension NRA Account FTN Account

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Account Holder Overseas entities or individuals Overseas entities

Available Region Nationwide Typically within FTZs

Currency Management RMB and foreign currencies managed separately Integrated RMB and foreign currency management

Cross-border Transfers Limited Free subject to regulations

Interest Rates Standard rates Market-determined rates

Investment and Financing Not supported Supports cross-border financing and investment

Typical Users Foreign entities without a local legal entity Companies with cross-border fund management needs

How to Choose the Right Account?

When deciding between an NRA and FTN account, businesses should consider their business model, fund flows, settlement frequency, and whether they have financing or investment needs.

NRA Account A cost-effective option for companies that only occasionally settle with domestic clients in RMB and don’t require complex cross-border fund management.

FTN Account More suitable for companies with frequent cross-border capital flows, financing needs, or plans for centralized global fund management. Especially in FTZs, the FTN account offers greater convenience.

It’s also important for businesses to stay updated on policy changes. For instance, in the first quarter of 2025, the Shanghai FTZ introduced policies supporting the use of FTN accounts for green finance projects, further expanding their applications.

Conclusion

As Chinese companies expand globally and global supply chains continue to evolve, cross-border financial tools are becoming increasingly essential. NRA and FTN accounts serve as vital bridges connecting domestic and international financial systems, and are becoming indispensable for enterprises managing cross-border funds.

Whether choosing an NRA or FTN account, businesses should align their selection with their specific operational needs, plan their capital flows strategically, and optimize fund efficiency to support sustainable global growth.