Answering The Most Common Questions About NRE Interest Rates

Whether you become or already are a non-resident Indian, you need to open an NRI Account on priority. Operating through an NRI Account fulfils your legal obligation and is advantageous. The types of NRI Account you should open depends on your banking requirement. Non-Resident External or NRE Account is apt if you wish to park your foreign earnings and make seamless remittances.

When opening an NRE Account, pay attention to its interest rate. A higher interest rate works in your favour. Let us understand more about the account and the NRE Account interest rates through FAQs.

What are the NRE Account interest rates offered?

This depends on how you choose to hold the account. There are three ways you can hold an NRE Account: Savings, Current, and Fixed Deposit. A Savings Account is ideal to meet your daily banking needs. A Current Account is typically used for business transactions. FDs are perfect if you wish to secure and grow your savings. These options have a different interest rate offerings.

Savings Account offers a reasonable interest rate that allows you to keep your money working. However, the interest rate is lesser than that of an FD. Invest in an NRE Deposit to earn competitive interest returns.

How to get the best interest rates?

NRE Account interest rates vary for each bank. The only way to get the best rate for your account is by exploring the market. Do not open an account without doing thorough market research. Run a search online before opening an NRI Account. Check the interest rates. Open an account with banks that offer the highest interest rate and a host of other benefits. You can easily find information on the bank portal.

How are NRE Savings Account interest deposits calculated?

Like every other Savings Account interest calculation, this one depends on the balance you maintain. The closing day balance in your account is considered to calculate the interest earned. A higher balance attracts a higher interest rate and vice-versa.  Generally, most banks follow a quarterly interest payout.

However, they may choose to change the interest payout policy anytime. Watch for updates on the bank’s website to know about NRE Savings Account interest rates changes.

What are the tax implications on the interest earned?

Interest earned on your NRE Account deposit is tax-free. You can also entirely repatriate the interest earned to your country of residence at any point. The tax implications apply to interest earned from an NRE FD as well. However, if you transfer the interest earned from your NRE Account to your NRO Account, you must pay taxes.

Points To Note Before Beginning The Wealth Account Opening Process

Savings forms an essential part of achieving wealth growth. However, it does not pertain to merely accumulating capital. You also need to know how to put it to good use based on your financial goals. Several investment instruments are available for this purpose. The key is to choose them carefully depending on your risk appetite, flexibility needs, and investment horizon.

Not all are equipped with adequate knowledge to make these decisions. Hence, several mediums help with Wealth Management. You get them in passive forms, like blogs, market insights, tutorials, books, etc. But if you need active assistance that addresses your investment concerns, a Wealth Account opening is a good idea. It provides you with bespoke wealth solutions. Check these aspects to begin the process smoothly:

Qualifying requirements:

Maintaining a high balance with the bank makes you eligible to open the account. This gets calculated through your Total Relationship Value (TRV), which typically amounts to Rs. 5 lakh. Additionally, you must build this TRV to Rs. 30 lakh over six months after opening the account. This makes you eligible to enjoy its benefits and access Premium Banking products.

Beneficial aspects

Managing wealth is an elaborate process that requires consideration of various aspects. Hence, you get to choose from a wide range of products after the Wealth Account opening. They include Mutual Funds, Remittances, Fixed Deposits, Insurance, Structured Products, etc. Assess how they fit into your portfolio to meet your financial goals for creating an apt combination. A balance of short- and long-term instruments is ideal for proper financial planning.

Charges

Like any other Bank Account, this account attracts maintenance changes. The amount is slightly higher than a Regular Savings Account as it offers Wealth Management services. Such charges may differ from bank to bank. Some of the standard ones include an annual fee for Debit Card usage, penalty on local currency cheque returns, transfer cost, etc. Look into them to set your expectations right.

Convenience

Today, you get to access almost everything at your fingertips. So much so that you expect it from every service you interact with. Banks understand this and offer the needed convenience for Wealth Account opening. They let you carry out the process through banking apps and web portals. This eliminates the need to visit the bank physically to complete the formalities. Moreover, the opening procedure gets done within a matter of minutes.

Management rules

Opening the account is the first step to getting started on your Wealth Management journey. Once done with the formalities, you need a calculated approach to manage your funds in it effectively. Thankfully, this is not a struggle as you get assigned a dedicated relationship manager. They regulate your investment decisions and account maintenance. Such expert opinions add value to your wealth growth journey.