4 Types Of Nri Accounts You Can Open In India

By Author: Rishank Rautela
Total Articles: 4
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Businesses have gone global today and many Indians are using this opportunity to move to foreign countries. But when you have to make a huge move like this, there are several challenges, with financial management being the most crucial one. These challenges can further multiply if you have savings and investments in India. Thankfully, banks offer different types of NRI accounts in India that enable you to conduct your financial transactions seamlessly. They are as under.

NRE Accounts

Non-Resident External Rupee Account or NRE Account is the most popular type of NRI savings account. This account is specially designed to enable you to park your foreign currency earnings. Your foreign currency savings are converted into Indian Rupees at the prevailing international currency market rate. You can open this account as both, a savings or a recurring deposit account. The most prominent feature of this NRI account is that you can freely and fully repatriate both, the principal amount deposited and the interest earned on savings parked. You also do not have to pay any taxes on the interest earned on funds parked in this account. NRE accounts are ideal for you if you wish to send money to your family in India.

NRO account

Another type of NRI account you can open if you’re moving abroad, is the NRO or Non-Resident Ordinary Rupee Account. This account proves especially beneficial if you have any property or investments in India. For instance, you may park sums earned from renting out your property in India or money earned from your mutual fund or share market investments. You can also use sums from this account to make your local payments and remittances. Moreover, if you have any existing loans or insurance policies, you can pay your EMIs and insurance premiums through this account. NRO accounts help you manage the sums earned through investments while you are abroad. It is ideal for people who wish to maintain cash in INR. In a given financial year, you can deposit as much as $1 million USD in NRO accounts, although the deposits are subject to TDS.

FCNR accounts

As a personal banking service, banks allow you to make fixed deposits out of sums parked in NRE and NRO accounts. These FDs are known as Foreign Currency Non-Resident Bank Deposits or FCNR accounts. If you wish to avoid the fluctuating exchange rates of foreign currencies, you can benefit from opening an FCNR deposit. You can maintain your FCNR account in different, major foreign currencies which include US dollars, Great Britain Pound Sterling, Euros, Australian, Canadian and New Zealand Dollars, and Japanese Yen and so on. Also, as an NRI, you can open the FCNR deposit jointly with another resident Indian. The minimum term of this deposit is 1 year and the maximum term is 5 years.

RFC accounts

If you choose to return to India, you can park the savings you’ve earned in foreign currencies, while you were living abroad, in a Resident Foreign Currency or RFC account. RFC accounts are ideal for homecoming Indians and you do not have to worry about fluctuating rates of foreign currencies. Moreover, the account can be converted into an NRE or FCNR if you move abroad again. The interest earned from savings parked in RFC NRI accounts in India is completely repatriable.

So if you are moving abroad, you can utilise the personal banking services for NRIs and open your account. Remember to check the eligibility criteria and documents required before opening the account. Most banks today, allow you to open these accounts online as well.