How Is An NRE Account Beneficial?

Money is necessary for everyone and a saviour in unfavourable conditions. You should have enough funds to meet your requirements, even during emergencies. It is safer to remain prepared for most financial needs and save today. Whether you live in India or elsewhere, you always require money for meeting daily expenses.

A Non-Resident External or NRE Account is a rupee account to facilitate NRIs transfer funds to India. Funds generated overseas in other currencies get transferred to India in Indian Rupees in this account. You receive multiple benefits by opening this account:

Indian Rupee account

The Non-Resident External Rupee account is an Indian Rupee account. The initial funding generally happens through fund transfer from any other NRE or NRO Account you hold or by depositing foreign currency or traveller’s cheques if available.

Joint account

You can open and transfer money from the account, considering the NRE Account interest rates. Only NRIs can hold a joint account. Holding it jointly with resident family members is not permissible. The account holder can issue a mandate authorising a family member to operate the account in their absence.

Nomination facility

The NRE Savings Account also allows a nomination facility where you can repatriate both the principal and interest components. It enables you to access Savings Account, Current Account, Fixed Deposits, etc.

Deposit and withdrawal currencies

Deposit funds in foreign currency and withdraw them in Indian currency when you open an NRE Account. Another point is that the rupee account balances are subject to currency exchange risks.

Free from taxes

Taxation rules do not apply to the Non-Resident External account. You are exempt from wealth tax, gift tax, and income tax.

How to choose?

To choose the best NRE Bank Account, select a bank that offers service in the country of your residence. It can help when you need urgent customer support. Besides, opt for a bank that provides minimum account balance requirements and attractive interest rates on deposits in the account. These accounts work like regular Savings Accounts.

You get an international Debit Card for withdrawals. Learn about the charges and costs attached. In all, you must opt for ease of operations, such as simple documentation, a robust ATM network in your country of residence, customer-friendly mobile and net banking facilities, and an affordable money transfer solution. Compare based on these points while choosing the best NRI Account.

Documents required

When you open a Non-Resident Account in India, you must submit a valid passport, PAN Card or Form 60, proof of NRI statuses like work permit, visa, and valid Overseas Resident Card. Besides, give some of your recent passport-size photographs, initial payment cheque, and address proof. Attest them by the judge, the Indian embassy where you reside, or similar authorised personnel.

Essential Facts About NRE Accounts That You Need to Know

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:

• 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

Note that if you are an Indian citizen currently residing in countries like Bangladesh, Nepal, or Pakistan, you need to get prior approval from the RBI to open any NRI bank account.

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.