Perks Of Opening An NRO Account

When an individual shifts to another country, they find it slightly tricky to manage the income generated in India. Their regular resident Bank Account does not let them deposit foreign currency and convert it into INR. In times like these, they need a Non-Resident Ordinary Account.

An NRO Account is a type of Non-Resident Indian banking facility. It allows global Indians to manage and park the money earned in India. That way, they systematically house their funds from India and overseas. The following are the perks:

Smooth repatriation

The account provides the holder with easy repatriation. This implies they can transfer up to USD 1 million per financial year through International Remittance. Moreover, the interest accrued is taxable at only 30%, deductible at the source.

Minimal balance requirement

Most banks issue minimal balance requirements, as low as INR 10,000. This helps the holder utilise the funds in their account worry-free.

Easily accessible

This NRI Account is readily available online. You only need to fill out an application form and upload relevant documents. Once verified, you will receive your account information almost instantly.

No risk of exchange rate fluctuations

Funds in the account are not subject to exchange rate risks. Since it maintains your money in INR, you need not worry about conversion losses.

Investment & loan facilities

You can easily invest in term deposits, Mutual Funds, etc., through transfers from the NRO Account. This helps you earn from your savings in the resident country. You may also use these investments as collateral to get loans. The banks charge lower interest rates as they get secured through the account. This way, you get swift and smooth financial assistance during emergencies.  

Joint account option

Any NRI or Indian resident (related to you) is allowed to open an NRO Account in India with you. This option gives your close relative access to your account.

DTAA

Although NRO Accounts are not tax-exempt, the account holder can avoid paying double taxes. They need to opt for the Double Taxation Avoidance Agreement or DTAA. The Reserve Bank of India has entered a DTAA with several countries, intending to discard the need for double tax payments.

Interest on Fixed Deposits

When you opt for an NRO Deposit, you earn interest on the funds in the account. This multiplies the money in your NRO Account.

Ideal place to park Indian income

The account is a viable option to save your foreign earnings and park income earned in India. You can easily access the account to manage your Indian expenses whenever you are in the country.

Trading facility

Some banks allow you to link the NRO Account to a PIS Account to trade in Indian stocks listed on a recognised stock exchange. PIS stands for Portfolio Investment Scheme, an initiative that facilitates NRIs' trading activities.