As an Indian moving abroad, you need to open an NRI account. The right account can help you manage your savings in India as well as those earned in the foreign country you have moved to. You can choose between two types of NRI bank accounts – NRE and NRO savings accounts. Both accounts come with their own set of benefits and you can open either of these accounts or both of them. In this article, we have highlighted some essential facts about NRE bank accounts. Read on.
NRE account meaning and purpose
A Non-Resident External Rupee or NRE savings account is a special type of account designed for NRIs. This is a foreign currency account. This simply means that you can deposit different types of foreign currencies that are authorised by the Reserve Bank of India. However, since this is essentially an Indian account, the foreign currency parked into the account is immediately converted into INR. The bank applies the currency conversion rate of the specific day on which the sums are deposited into the account.
Eligibility criteria for Opening the account
In order to open an NRE savings account you should be either of the following:
Currencies you can deposit
You can deposit a wide range of currencies in your NRE savings account. Earlier the RBI allowed NRIs to only park basic currencies such as American Dollars, Euros, Great Britain Pound Sterling and Japanese Yen. However, today, NRI can deposit several other currencies which include Australian Dollars, Canadian Dollars, New Zealand Dollars, Singapore Dollars, Swiss Francs, Swedish Krona and Danish Krone.
Different types of account you can open
The accounts you can open as an NRI are more or less similar to those that you can open as a resident Indian bank account holder. For instance, you can open both, savings as well as current NRE accounts. You may also open a recurring deposit, in which you can deposit a fixed sum of a particular foreign currency, although this facility is not provided by all banks. Similarly, you can open a fixed deposit account, widely known as a Foreign Currency Non-Repatriable Account Deposit or FCNR deposit. However, in case of NRI bank accounts, there is no provision for salary or zero balance accounts. In case, you may need to maintain an average amount of ₹75,000 or its equivalent in foreign currencies.
Repatriation
All NRE accounts are fully repartaible accounts. This means that you can freely and fully repatriate both, the principal amount deposited as well as the interest earned on deposits.
Final word: NRE bank accounts can be opened jointly, but only with another NRI, who may serve as your Power of Attorney. Some banks allow you to open NRE accounts online. An NRE bank account can prove incredibly beneficial if you move to a foreign country where the value of the currency is higher than INR. For instance; a saving of USD $200 converts to over ₹14,000, at today’s currency conversion rates. This accounts for a huge saving and can help you create a corpus at a much faster rate.
NRE account meaning and purpose
A Non-Resident External Rupee or NRE savings account is a special type of account designed for NRIs. This is a foreign currency account. This simply means that you can deposit different types of foreign currencies that are authorised by the Reserve Bank of India. However, since this is essentially an Indian account, the foreign currency parked into the account is immediately converted into INR. The bank applies the currency conversion rate of the specific day on which the sums are deposited into the account.
Eligibility criteria for Opening the account
In order to open an NRE savings account you should be either of the following:
- A Resident Indian Citizen moving abroad
- An NRI or a PIO (Person of Indian Origin), as per the FEMA definition
- A seafarer of Indian origin or nationality, who is employed by an overseas shipping company
- A Government Employee from India, holding a diplomat passport
- An Indian student pursuing higher education in a foreign country
Currencies you can deposit
You can deposit a wide range of currencies in your NRE savings account. Earlier the RBI allowed NRIs to only park basic currencies such as American Dollars, Euros, Great Britain Pound Sterling and Japanese Yen. However, today, NRI can deposit several other currencies which include Australian Dollars, Canadian Dollars, New Zealand Dollars, Singapore Dollars, Swiss Francs, Swedish Krona and Danish Krone.
Different types of account you can open
The accounts you can open as an NRI are more or less similar to those that you can open as a resident Indian bank account holder. For instance, you can open both, savings as well as current NRE accounts. You may also open a recurring deposit, in which you can deposit a fixed sum of a particular foreign currency, although this facility is not provided by all banks. Similarly, you can open a fixed deposit account, widely known as a Foreign Currency Non-Repatriable Account Deposit or FCNR deposit. However, in case of NRI bank accounts, there is no provision for salary or zero balance accounts. In case, you may need to maintain an average amount of ₹75,000 or its equivalent in foreign currencies.
Repatriation
All NRE accounts are fully repartaible accounts. This means that you can freely and fully repatriate both, the principal amount deposited as well as the interest earned on deposits.
Final word: NRE bank accounts can be opened jointly, but only with another NRI, who may serve as your Power of Attorney. Some banks allow you to open NRE accounts online. An NRE bank account can prove incredibly beneficial if you move to a foreign country where the value of the currency is higher than INR. For instance; a saving of USD $200 converts to over ₹14,000, at today’s currency conversion rates. This accounts for a huge saving and can help you create a corpus at a much faster rate.
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