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Investing Versus Repatriation: The Better Choice For An Nri

By Expert Author: Neha Sharma

When you travel abroad for the business or work reasons, you will want to send money to India. With the different types of NRI accounts, this is very easy. In this article, we give you the different benefits of investment and reparation options available with the NRI savings account.

Different functioning of the NRI savings account

The different NRI savings account has different functions and different benefits. These NRE savings account and NRO savings account will have a higher interest rate as compared to the savings accounts in the country of residence and therefore provide an ideal investment option. If the NRI is earning an income, he can invest in either of the accounts, but there is a certain limit of repatriation to NRO savings account. However, if an NRI is earning an income from India, he cannot deposit it in the NRE savings account. The income from Indian sources can be deposited in the NRO account.


NRI investments options and support of NRI savings account

To invest in India, an NRI will need either a NRE savings account or a NRO savings account to begin with. In addition to passport, overseas address, birth date and photo ID proof, an NRI will need to complete KYC properly. Then, NRI will need to repatriate the funds into Indian rupees and use them to invest in any form of local investments such as stocks, real estate, mutual funds, commodities, etc. So, whether you have NRE savings account or NRO savings account, it will make no difference as they both facilitate the repatriation however, NRO accounts have upper limit.


Taxation for NRO and NRE savings accounts

The NRE savings account is not charged for Income tax, wealth tax and gift tax in India. But the interest earned in the NRO savings account and the credit balances are subjected to the income tax and therefore funds will be deducted. Therefore, if you are opening a NRI savings account, it is better to open a NRE account, especially if you want to ensure that your income which you are earning internationally is remitted to India in Indian rupees. This will allow you to earn through your remittance and NRI investment options without paying any income tax concerns. You can also have a joint account with another NRI apart from the local resident. These NRI savings accounts are therefore ideal for repatriation.

So, as you send money to India for investments or just as savings, it will be smarter choice to use the NRI accounts as they can be converted into local accounts, if you return back to Indian for temporarily or permanently.

Author Bio :-Neha Sharma is a finance student who loves to write about NRI savings account and more. She is delighted to share information she knows about NRE savings account and NRO Savings Account to those who are interested in it.

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