By Vipul Jain | 31 Dec, 2024
When staying abroad do you wish to manage your finances in India? Well, it may sound odd but it is possible. A Non-Resident Indian (NRI) enjoys several perks related to financial opportunities. It helps them to stay connected with their roots while increasing investment options. However, the specific benefits of an NRI account may vary based on the type of NRI account and the bank you choose. In this blog, we will learn about all the common benefits of an NRI Account. Before that, it is vital to know what is an NRI account and the different types of accounts available for an NRI.
An NRI account refers to an account opened by an NRI, a Person of Indian Origin (PIO), or an Overseas Citizen of India (OCI). It is an account opened with a bank or financial institution authorized by the Reserve Bank of India (RBI) to offer various banking services to an NRI. They can deposit their income which is earned either from India or from another country. An NRI can use these accounts to make investments, pay bills, or send money to their family in India. There are three types of an NRI account. It is vital to know about each account to choose the right one and avail yourself of all the perks.
An NRI can open different types of bank accounts in India. The type of NRI bank account chosen depends on their liquidity and investment needs. Also, the account type opted for may depend on the transfer needs of the account holder. The types of accounts available for an NRI are as follows
Knowing about the types of an NRI account will allow you to select the most suitable account as per your needs. Now, let's learn about the common benefits of an NRI account.
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An NRI account offers limitless benefits to the account holder. From several benefits with tax to easy access to investments in India. The perks of an NRI account cannot be avoided if you are an Indian staying abroad.
The NRE account and FCNR account for full repatriation of the amount without any restrictions. It means that you can transfer both your deposit amount and the interest earned in your foreign bank account. You can also get repatriation perks with an NRO account but it will have extra terms and conditions.
NRI accounts provide the flexibility to open joint accounts. An NRI can open a joint account with a resident relative on a "former survivor" basis. Also, a joint account with a non-resident relative on an "either or survivor basis". It allows you to manage the finances together but for this, you need to submit a power of attorney.
NRI accounts are a safe and secure way to keep your funds in India. It reduces the risk of loss associated with keeping money in a non-interest-providing account. Also, eliminates the stress of theft that may occur when carrying cash.
Both NRE and FCNR accounts offer crucial tax benefits. If you choose to open an NRE or FCNR account then you are free from paying the income tax. You don't need to pay any tax on the interest that you have earned from your deposit. However, in case you open an NRO account, the interest received from your deposit will be liable for tax in India.
NRIs can use the funds deposited in your account for investments. You can invest in various financial assets in India. The capital can be invested in various instruments in India. Such as mutual funds, fixed deposits, real estate, and many more.
NRI accounts provide a platform to conduct financial transactions in India. You can manage your finances from any part of the world by using the internet or mobile banking. It also provides an easy process for abroad transactions. Also, lessens the problems that come along with cross-border financial activities.
With an NRI account, you can hold and transact in foreign currencies. It means that you can manage all your foreign income and savings without converting the currency every time. NRI account is flexible as it permits you to hold the amount in various foreign currencies. It eases managing finance for those NRIs who earn and spend in different currencies. The advantages of NRI accounts provide an easy way to manage finances well.
NRIs, PIOs, and OCIs can open an NRI account and avail of all these benefits in India. It can help them avail of the benefits and manage their finances abroad and in India.
An NRI account offers a lot of perks that are tailored to your unique financial goals and needs. However, choosing the right bank account is the most crucial decision for an NRI. It will make sure how you can manage, transfer, invest, and grow your funds in India. NRI accounts offer a complete solution for all your financial and investment needs. It allows one to open joint accounts, access online services, etc. which makes it a helpful and effective tool. Keep in mind that along with the perks, there are some disadvantages of an NRI Account as well. Choose the right type and apply for an NRI account to avail of all the NRI account benefits. Applying to open a bank account can be easy but applying for immigration services is not. No worries, you can always ask for assistance from an expert.
You might need help when applying for immigration services being an NRI. The immigration services may seem easy but they are not. However, there is no need to worry as you can always ask for help with complex application procedures. Visament is one of the most reliable websites to get help with any kind of immigration service. Like OCI, passport, Visa, PIO to OCI conversion, and many more. We have an entire team of professionals to help with the complete process. Our expert team has good knowledge about everything and can guide you throughout. You can connect with them anytime as our team is actively working 24*7 to assist you with everything. Eliminate the burden from your shoulders by contacting us today.
An NRI can face several disadvantages including financial challenges, tax consequences, and regulatory obstacles. An NRI is not allowed to open new accounts in popular investment options like Public Provident Funds and NSC, they also face the challenge of currency fluctuation, and some banking services in India are restricted for an NRI.
The account you should open depends on the source of your income and financial goals. An NRE account is a good choice for those NRIs who wish to invest in India and repatriate foreign earnings, the interest earned in the NRE account is tax-free and there are no limits on the repatriating funds. On the other hand, the NRO account is good for those NRIs who earn income in India such as rent, dividends, etc. The interest earned in an NRO account is taxable and there is a limit of $1 million per fiscal year for repatriating funds.
Yes, it is mandatory to convert to an NRI account if you wish to move abroad. You need to convert your resident savings account to a Non-resident ordinary or an NRO account to manage your Indian income and to send your foreign earnings to India. It is required by the Foreign Exchange Management Act (FEMA). If you fail to do the same, you may face penalties and may be forced to pay a fine of up to three times the amount in your savings account.
No, you cannot have both a resident and an NRI account simultaneously. This is because the FEMA Act doesn’t allow NRIs to have savings accounts in India. So, you must convert your resident account to an NRI account if you are an Indian resident and became a Non-resident Indian (NRI). You can either close your resident account or get it converted into an NRO account.
No, OCI and NRI are not the same thing. OCI stands for Overseas Citizen of India while NRI stands for Non-resident Indian. Every Indian citizen who stays outside India for any purpose temporarily or long-term is an NRI. In contrast, a foreign national of Indian origin who is registered as an OCI cardholder is an OCI. Both these terms refer to people of Indian origin who stay outside India. However, both have different statuses of citizenship and rights.
NRE or Non-resident external accounts have several limitations. NRIs are not allowed to deposit money that is earned in India into an NRE account, there may be restrictions on how much and how often can an NRI withdraw money from an NRE account, It doesn't permit domestic transactions, and the value of deposit may vary due to currency fluctuations.
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