Different Types of NRI Account in Indian Banks

An NRI account is opened by a Non-Resident Indian (NRI) or a person of Indian Origin (PIO) with the RBI-authorised bank or a financial institution.

Types of NRI banking Accounts 
It is quite reasonable for an NRI to get confused about what to do with the existing bank accounts. Especially for a person who already has three to four savings accounts in India and is moving abroad for some time, then comes the dilemma of what to do with the bank accounts. The banking services and operations for an NRI account is slightly different from that of regular savings bank account. The following are the different types of NRI banking accounts –

1. Non-Resident External (NRE) Account 
2. Non-Resident Ordinary (NRO) Account 
3. Foreign Currency Non-Resident (FCNR) Account 

Non-Resident External (NRE) Account: 

• An NRE account is opened in India by an NRI to save their foreign earnings. It allows you to transfer your foreign earnings instantly to India. 
• For this, you need to open an NRE account and deposit your foreign currency from abroad. 
• In an NRE account, you can deposit money in any foreign denominations and withdraw it in Indian rupee. At the time of deposit, the amount is converted into Indian rupee and credited to your account.
• The principal amount and the interest you earn from an NRE account is non-taxable in India. 

Non-Resident Ordinary (NRO) Account: 

• An NRO account is an ordinary saving account opened by an NRI.
• NRO account helps NRIs to manage the income earned in India and abroad. This includes rent, dividends, subsidies, pension, or any amount you receive.
• Both foreign and Indian currencies can be deposited in an NRO account, but the withdrawal can only be made in Indian Rupees.  
• Under this account, you can deposit Indian money and manage the services like any other savings bank account. 
• Interest income earned on an NRO account is liable for TDS (Tax Deductible at Source). 

Foreign Currency Non-Resident (FCNR) Account:

• If you are an NRI and wish to open a fixed deposit account in India, then the FCNR account is the preferred choice for NRI services. 
• An FCNR account is opened and maintained in foreign currency. The deposit in FCNR account is not subject to any exchange rate fluctuations. 
• You can open an FCNR account for a minimum of 1 year and a maximum of 5 years. You can withdraw the FCNR amount before completion of the selected term, but the premature withdrawals are subject to penalties. 

There are multiple of NRI banking services available for non-resident Indians to do their banking activities in India. Even NRI online banking is one of the famous banking services for an NRI. 

What are the NRI net banking services available?

Moving to a foreign country for a better standard of living and earnings, but confused about the banking services? This article will take you through the internet banking facilities available for an NRI.

Every bank considers NRIs as its premium customers and provides custom banking tools that fit their requirements. When it comes to banking, there are NRI banking services which extend to online, helping the NRIs to stay back at home (abroad) and do the financial transactions at ease.

NRI internet banking is one of the preferred and most beneficial banking services for an NRI. No more visiting the branch and clarifying the deposit and currency fluctuation rates when everything today is accessible at your fingertip. So, let’s have a look at the net banking services available for an NRI:

• Inquiries – be it an inquiry about your account or a mini statement, with NRI banking online, one can quickly get access to his/her account details, within no time. You can reach customer support for all your queries regarding your account.
  
• Fund transfer – one of the most useful and beneficial banking services of an NRI is the fund transfer. Gone are those days of visiting a foreign exchange centre to transfer the funds to India instantly. Today, the use of mobile banking or internet banking has made it easy for the NRIs to immediately send money, which gets credited in the NRI savings account within seconds.
  
• Requests – this includes chequebook/ DD request, Aadhaar number linking, changing the username or password, changing the two-factor authentication, blocking debit/credit card online, customizing the fund transfer limit, etc.
  
• Alerts – receiving important account-related alerts – including deposit and withdrawal, minimum balance alert, fraud risk management alerts, loan repayment alerts, service breakdown/ server upgrade warnings, etc.
  
• Bill payments – like the fund transfer, NRIs have benefitted a lot with the online bill payment. With a single tap on the mobile, you can pay your utility bills, electricity bills, telephone bills, insurance premium payments, online shopping bills, donations, tours and travels, hotel bills, fee payment, gas/ newspaper bills, etc.
  
• Security features – whether it’s a standard savings account or an NRI account, the security factors are the same for every account. Net banking allows e-security ensuring 128-bit encryption and using second-factor authentication for high-value transactions.
  
• Investment options – these days, every online banking platform provides investment options where an NRI can invest your foreign earnings in mutual funds or SIP or shares. You don’t have to come to India and visit an investment broker for investing in any options.
  
• Loan against deposit online – an internet banking NRI user can avail for a loan against their deposit at any time. The loan will be processed and opened instantly by crediting the loan amount within a day or two.

The online use of NRI banking services is pretty much simple. It has helped the NRIs all across the world to quickly transfer funds from abroad to India without any delay in processing. 

Benefits of Opening An Online Saving Account

Since years, people have been securing their money in the savings accounts of their banks. It ensures mental satisfaction and asset security for all account holders. Those who have a saving account earn interest on it and use it as and when required. They are easily accessible to the respective account holder and offer services like fund transfers from other accounts using IMPS, RTGS, NEFT, or even UPI, where account holders can earn interest on their deposits.

The applicable interest rates range between 3.5 per cent to 7 per cent per annum and differ bank to bank. Customers have the liberty to deposit or withdraw their money by submitting cheques or withdrawal slips. They can also take the help of ATMs to solve the purpose by applying for debit cards linked to their bank accounts.

The key features of saving accounts
A saving account helps customers track the inflow and outflow of money from their accounts. They enable banks to provide passbooks, debit-cum-ATM cards, cheque leaflets, internet banking facilities, bank statements, and even free SMS and email alerts for every transaction made. Bank account holders have unique and personalised account numbers with no limitation on deposits. Linking recurring deposits or even EMIs to the savings account is possible.

Types of accounts available
There are two types of accounts available:

• Minimum Balance Accounts: Initially, customers had to maintain a minimum balance in their account for the same to remain active. This policy varies, like the rates of interest offered by them. The account holder pays a fine for not following the rules and not maintaining minimum account balance.
• Zero Balance Accounts: With a change in banking services, zero balance accounts have also come in to effect. People convert regular saving accounts to zero balance accounts so that they avoid the penalties in future. Zero balance saving account services are also available.

The eligibility criteria
Those interested in opening accounts in banks need to follow some standard eligibility criteria laid down by banks.

1. The account holder should be a resident of India.
2. The age limit to open bank accounts is 18 years and above. Accounts are available for minors as well that are taken care of by parents/guardians.

There are many eligibility calculators online that can help users determine their eligibility to open bank accounts.

Benefits of opening online savings accounts
Technology has emerged as a winner for all the fields of business and banking. It ensures quick and safe connectivity within parties. The accounts used to save resources, such as income, can be tracked and used to make transactions via the internet or mobile banking apps. Online bank account opening with zero-balance helps increase accessibility by making themselves available on online banking platforms. Online documentation services are also available like KYC. Customers can contact helpline numbers through calls and emails for clarifications of queries or report of issues.