5 Benefits for NRI in Opening an NRO / NRE Bank Account in India
With so many different types of products and accounts available in the market, you can find yourself a little confused and hassled as to what product to opt for. Knowing better about the many available choices can help you make an informed decision. It also helps if you are able to differentiate between the various available avenues. That way, you can better choose for yourself where to invest all your hard earned money. You can generate better returns on your money, based on your preferences and requirements.
Non-Residential External (NRE) and Non- Resident Ordinary (NRO) Accounts are the two major categories of accounts available for you, as an NRI. They happen to be amongst the most popular options if you wish to save money in India.
As an NRI, you might not be clear about the various benefits of the accounts available to you. As such, to manage your income and investments, it is essential to open an account with the numerous NRI Benefits in India. Here are five NRI Account benefits that you need to know.
Knowledge about taxation on Interest will help you select the right NRI Fixed Deposit. While the interest earned on your NRE Saving Account as well the NRE Fixed Deposit is tax-free in India, savings in the NRO Saving Account as well the NRO Fixed Deposit are subject to TDS as per the Income Tax regulations. You also have an option of transferring funds from your NRO account to NRE account post payment of applicable taxes.
Another important advantage of NRI Accounts is repatriation benefits. Both NRO and NRE Saving Accounts allow smooth movement of funds because you can repatriate both, the principal and interest abroad. Funds in NRE Accounts are fully and freely repatriable. However, funds in your NRO Account are repatriable only post payment of applicable taxes.
Minimal Balance Requirement:
You don’t need to maintain high balances in your NRE and NRO Accounts. Many banks have dropped their minimum balance requirement significantly. Nowadays, most banks require just Rs. 10,000 as a minimum balance.
FCNR Deposit – Foreign Currency Non Resident Deposit Account
In addition to NRE/NRO saving accounts and NRE/NRO fixed deposits you also have an option of booking Foreign Currency Deposits. So, if you want to save your earnings in Foreign Currency then you can book FCNR deposit and earn interest in Foreign Currency. Interest earned on FCNR deposits are also tax-free in India.
One more advantage of NRE and NRO Accounts is convenience. Opening an NRI Account is easy. Most banks allow you to open NRI accounts without visiting the branch in India. All you need to do is fill a form online, take a printout, attach the self-attested copy of the required documents and courier it to the bank in India. Banks allows conversion of your existing Resident account to NRO account by simply emailing the required documents to the Branch via your registered email id.
Convert your accounts
Convert your Savings Account to a Non-Resident Ordinary (NRO) Rupee Account. NRIs are permitted to deposit income earned in India such as rent, dividend, etc., into their NRO Account. The funds in this account are non-repatriable and taxable.
Another option is the Non-Resident External (NRE) Rupee Account. NRIs can transfer funds from overseas in foreign currency. Since this is a rupee account, this account can be used to pay expenses in India. The benefit of this account is that the funds in the account are entirely repatriable with no tax liability. NRI investments in India can be carried out through this account.