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. 

Facilities Available to NRI Account Holders

The Chief regulatory bank in India, the Reserve Bank of India, is constantly creating means and ways to make banking more and more convenient for bank account holders. The NRI banking category is also extended a wide range of benefits and facilities that makes it easy for Non-Resident Indians to manage their funds, in both, their Non-Resident Ordinary Rupee (NRE) as well as their Non-Resident External Rupee accounts (NRE). Here are the facilities you can get with your NRI bank account.

1. Internet Banking facilities

NRI internet banking is one of the most basic facilities you can get with your NRE and NRO savings accounts. This is the most important and fundamental facilities available to NRI bank account holders because it can help them easily manage their bank accounts in India while residing in a country, thousands of miles away. With the click of a few buttons, you can order cheque books and bank debit and credit cards, create fixed deposits, make market investments and assign nominees and so on and forth through the internet banking facility.

2. Fund transfer facilities

Banks recognise that Indian residents may be based in any country across the globe and may still have financial obligations towards their family or businesses in India. This is why NRI banking services also entails easy and quick fund transfer facilities. You can easily send funds from your NRI bank accounts to regular as well as other NRI accounts through net banking. Typically, you can transfer sums of various international currencies such as EUR, GBP, JPY and different dollar currencies like USD, AUD, CAD, and SGD into NRI bank accounts. Apart from net banking, sums can be transferred through different mediums such as Western Union Money Transfer, Money Gram and Xpress Money, to name a few. However, you need to check if your bank provides these money transfer services. Thanks to digital banking, funds are credited into the beneficiaries’ accounts within just a few hours.

3. Loan and overdraft facilities

Say you wish to purchase a car or a home in the foreign country you are based in, but are in need of a loan to facilitate the purchase. You can easily apply for a loan against the sums parked in your NRI bank accounts. If you have a fixed deposit with your bank, you can also apply for overdraft services. Moreover, applying for the loan or overdraft facilities does not include robust documentation or application processes. You can do it easily through the already available NRI online banking facility.

4. Depository services facility

If you find the Indian investment market more profitable than the investment market of the country you are living in, you can always avail the depository services facilities offered with your NRI bank account. Banks provide depository facilities which make it possible for you to invest in mutual funds, shares, government bonds and different kinds of money market instruments available in India. Once again, you can use your NRI net banking account to make your investments.

5. FCNR facilities

Once you’ve saved enough money, you can also think of utilising the FCNR NRI services provided by banks. You can create a fixed deposit in foreign denominations without worrying about currency fluctuations. The applicable FD interest rate applies throughout the FCNR deposit tenure and you don’t stand to incur a loss even if the price of the foreign currency falls upon maturity.

Final word: So, if you are planning to move abroad, ensure you open your NRI banking account before moving. Some banks also allow you to open the account online through digital banking.

NRI Banking - The Essential Facts You Should Be Aware Of

Today, most Indian banks offers special NRI banking services to their customers living in foreign countries. Non Resident Indians or NRIs can choose between two basic NRI bank accounts –NRE accounts and NRO accounts. These accounts make it easy for you to manage your savings seamlessly and conveniently. However, since all NRI bank accounts come with their own set of features and benefits, here are some essential facts about NRI accounts that you should be aware of.

Types of accounts you can open
As an NRI, you have the option to open 4 major types of NRI banking accounts. These are:

• Non-Resident External Rupee or NRE accounts
• Non-Resident Ordinary Rupee or NRO accounts
• Foreign Currency Non-Resident Bank Deposits or FCNR accounts
• Resident Foreign Currency Accounts or RFC accounts.

Basic features of the accounts you can open
Before you open any of these NRI banking accounts you should consider your requirements.

• You would require an NRE account if you wish to park your savings in foreign currencies. The funds parked in NRE accounts and the interest earned on it is freely and fully repatriable.
• If you are living abroad but have investments and sources of income in India, you will need an account in which you can park your savings in INR. In such a case, you should open an NRO savings account. For NRO accounts, you can only repatriate the interest earned on savings, as per RBI limitations. Also, you have to pay TDS on the savings parked in the account.
• If you have enough savings in foreign currencies, you can open an FCNR deposit and earn good interest rates on it, without worrying about currency fluctuations.
• If you wish to return to India at a later date and park your foreign currency savings in it, you can open an RFC account in order to eliminate the risks associated with currency fluctuations.

Opening the account
As a part of NRI services, most prominent banks in India allow their customers to open NRI bank accounts online. You can simply visit your preferred bank’s website, select the type of account you wish to open, fill a form and attach the documents. Some banks may even ask you to provide proof of your NRI status, which you can get from the Indian Embassy of the country you are living in. You can even open this account by visiting your preferred bank with the necessary documents, whenever you visit India. While these services are offered by most banks, you should check if the bank has RBI authorisation and the necessary license for dealing in foreign currencies. You can open this account irrespective of the foreign country in which you are residing.

Services available
As an NRI, you can easily park your foreign earnings in any of the above mentioned NRI bank accounts and conduct a wide range of transactions. Like with most bank accounts, you get NRI internet banking services, which helps you conduct a wide range of online transactions.  For instance, you can easily send money to your family in India or make fixed deposits out of your savings by utilising the internet banking facility provided with your account. You can seamlessly transfer funds from one account to another and pay for your expenses in India or abroad through your net banking account.

In conclusion, you must consider your requirements and the type of services available before you open any of the above mentioned accounts. Ensure you select a bank offering NRI banking services so that you can easily conduct a wide range of transactions from any corner of the world.

4 Reasons Why You Should Open An NRI Banking Account

Banking has become rather convenient today, whether you are a resident Indian or a Non-Resident Indian (NRI) living abroad. Today, you can access your bank account over your mobile phone screen or your desktop/laptop computer within seconds. Whether you want to open a savings, current or NRI banking account, you can do it all online. Not only this, you can even transfer funds easily. As an NRI, you can open NRE and NRO accounts and FCNR deposits, depending upon your requirement. Once these accounts are opened, you can access your funds from any corner of the world, rather easily. So if you are an Indian living abroad, here are 4 reasons why you should open an NRI bank account.

1. You can easily repatriate funds

As mentioned above, you can open Non-Resident Rupee External (NRE) and Non-Resident Rupee Ordinary (NRO) bank accounts as an NRI. Both these NRI banking accounts allow you to easily repatriate the funds parked in them. Just like a traditional bank account, you earn interest on your savings parked in NRE account, and both, the sums parked and the interest you earn on it; is freely and fully repatriable. In case of NRO accounts, you can repatriate the sums parked, but you need to pay the applicable taxes before doing so.

2. You do not need to maintain higher balances

Most banks offering NRI bank accounts in India have significantly reduced the mandatory minimum balance maintenance requirement. Just like a basic savings account, you do not need to maintain more than ₹10,000 as the monthly minimum balance in your NRI account. This proves extremely beneficial if you are earning sums in a currency that holds a higher value than INR. For instance, if you are earning in USD, your minimum deposit can be as low as approximately USD $150.

3. You get access to internet banking services

Just like with your regular savings and current accounts, you also get NRI net banking services. This way, you can easily send money to and receive money from your family in India. You can also open both, NRE and NRO accounts and transfer funds between the two types of accounts easily. Moreover, you can also maintain a foreign currency fixed deposits using the sums parked in NRE and NRO accounts and open these FDs via your internet banking enabled NRI account.

4. You can avail tax benefits

Opening both, NRE and NRO bank accounts come with their own set of advantages, with tax benefits being the most prominent reason why you need this account. However, you need to research about the various types of NRI banking services and accounts before you open one – especially the aspect related to tax benefits. The interest earned on your savings parked in NRE accounts and FCNR deposits accounts is tax-free in India, but you have to pay TDS (Tax Deduction at Source) on your NRO account savings as per the Income Tax rules in India. You also have to pay a small amount as tax if your wish to transfer funds from your NRO account to any NRE account.
Final Word: As is apparent, there are several advantages of opening your NRI bank account. From NRI internet banking services, to easy repatriability and opening accounts online, everything is possible. Modern day NRIs can easily and conveniently complete their banking transactions within seconds from anywhere in the world. You can easily send money to your loved ones, transfer funds from one account to another and even withdraw funds from these accounts whenever you need.