Why Opening NRI Bank Accounts Is Beneficial?

Banking services have evolved. They offer different services besides traditional Savings and Current Accounts. Today, you can open Online, Salary, Special Accounts for women, minors, senior citizens, and so forth. Moreover, all your needs are addressed without stepping foot in the bank. Recognising that more Indians are considering foreign prospects, banks also offer an NRI Account.

These accounts enable non-resident Indians to conduct their transactions from anywhere. But before you open NRI Savings Account, let us understand its benefits.

Advantages

There are three main types of NRI Account: Non-Resident Rupee or NRE Account, Non-Resident Ordinary or NRO accounts, and Foreign Currency Non-Resident or FCNR Account. Here are its benefits:

Repatriation

The best part about NRI Savings Account is the repatriation advantage. You can quickly repatriate and move funds from both NRE and NRO accounts. You can also repatriate the principal sum parked and the interest earned on the deposits from your accounts while you are abroad. While the funds in NRE are freely and fully repatriable, you can repatriate funds from the NRO Account after paying the applicable taxes.

Convenience

These accounts make your life extremely convenient. Most banks allow you to open online accounts. You can be based in any foreign country and open your account remotely simply by filling out the application form and attaching the necessary documents. You can use Net Banking to open this account and avail all the benefits that go with NRI Accounts. Some Indian banks may require you to courier the account opening form with the necessary documents.

Tax Benefits

Before you finalise your NRI service, like NRE, NRO, or FCNR Account, you should read the associated tax benefits and charges. This lets you select the correct account. In India, the interest you earn on both NRE Account and NRE Fixed Deposits is tax-free.

However, the savings parked in the NRO Account and NRO FD are subject to Tax Deduction at Source under the Income Tax laws. Also, you can quickly transfer funds from the NRO to NRE after paying the applicable taxes.

Minimal balance maintenance

Most banks in India have reduced the minimum balance requirement to a massive extent for such accounts. They require their account holders to maintain as low as INR 10,000 as a minimum balance. This has contributed to the popularity of NRE and NRO Accounts among customers.

FCNR deposits

NRI Account holders can also consider FCNR Deposit. This is ideal for customers who want to save their earnings in foreign currencies and earn interest. It is especially beneficial if you make it in a currency higher in value than INR, as it promotes higher savings. Moreover, the interest you earn on such deposits is tax-free in India.

Before you open NRI Account Online, it is important to research the banks offering this service. While opening an account in most banks may be possible, it is better to consider their reputation and choose a nationalised bank. You may also assign a POA to maintain your account on your behalf.