I am writing this article to explain few important points related to opening the NRI bank account. There is few questions asked by our readers related to opening new NRI bank account when leaving to another country. I thought it would be good idea to put few key points on that topic. If you read this site regularly, you would have read my previous articles about Different Types of NRI Bank Accounts, Compare NRE, NRO and FCNR Bank Accounts and How to find NRI status?. Here I am posting few points which is not covered in the previous articles. If you have any doubts opening the NRI bank accounts, please post it in the comments section. Subscribe to our future article here.
WhatYou Must Know about NRI Bank Accounts?
- There is three types of Rupee account for the NRI people. Those are Non-Resident External(NRE) ,Non-Resident Ordinary(NRO) and Non-resident (Non-repatriable) Rupee Deposit accounts (NRNR) accounts.
- If you are leaving outside India, you must inform your bank about the NRI status. It is not legal to have the savings bank account in India, while you are outside India. They will change your savings bank account status to Non-Resident Ordinary(NRO) account.
- NRE accounts must be opened by the account holder itself, not by the power of attorney holder in India. Resident Power of Attorney holder can operate on the NRE accounts. But only for local payments to be made on behalf of the account holder.
- Funds deposited in the NRE account can be freely used outisde India. But, Funds in the NRO accounts cen be used only in India.
- In the case of NRE accounts, the interest rates for deposits up to one year should not exceed Bank Rate minus 2 percentage points. Interest rates on NRO accounts are fixed as in the case of domestic deposits.
- It is possible to get the loans and overdraft against your NRE/NRO accounts.
- It is possible to transfer money between two NRE accounts.
- Remittances made for credit to rupee accounts (i.e. NRE/NRO/NRNR accounts) maintained by NRIs are converted at market rate.
- Banks have been advised to re designate such accounts as resident accounts on return of the account holder to India.
- Interest accrued on NRE accounts are not taxable. where as interest on NRO accounts are taxable.
I hope this article will be useful for those who want to open the NRI bank accounts. I will keep update with the latest news on NRI related services. Please subscribe to our articles here. Thank you for reading this article.
- How NRI’s can invest in Indian share market?
- Invest in Share Market and Mutual Funds
- Book Review : 51 Income Tax Tips for Investors
Subscribe our future artilces here.