Fri, Nov 15, 2024 | Jumada al-Awwal 13, 1446 | DXB ktweather icon0°C

NRI account benefits: How to boost your banking experience abroad

If you are an NRI, you can enjoy many benefits by opening an NRI account in India. Learn how to get high interest rates, easy transfers, tax exemptions and more

Published: Thu 31 Aug 2023, 6:56 PM

Top Stories

Moving or settling abroad can be a big task, but with an NRI account, banking from overseas can be hassle-free. Plus, you receive attractive interest rates and investment options. This article discusses NRI accounts, their benefits, limitations and more.

Financial habits and banking practices change when you move abroad, requiring more customised services. NRI accounts do just that. They are specially curated bank accounts for Non-Resident Indians (NRI) and offer facilities related to transferring funds between countries, exchange rates, tax implications and more.

Different NRI accounts have different features to cater to different purposes. These NRI accounts facilitate more than just the transfer of funds and provide several benefits to their users.

Before learning more about NRI account benefits and features, let's quickly discuss the different types of NRI accounts available.

Types of NRI accounts available

To reap better NRI account benefits, you can choose from the listed savings and deposit accounts to make your banking experience better:

NRE (Non-Resident External) savings account

This is a rupee-denominated account which facilitates the deposit of foreign earnings to India. For example, you are staying in a foreign country and want to transfer your earnings from the foreign country to your parents. You can do so with an NRE account.

NRO (Non-Resident Ordinary) savings account

This account is also a rupee-denominated account that allows an NRI to manage income earned in India. For example, you have settled abroad, but you receive house rent here in India from a home you lease out. You can manage the income (rent) earned in India with an NRO account.

FCNR (Foreign Currency Non-Resident Account) account

This is a fixed deposit where an NRI can park their foreign income in the same currency. NRIs can deposit their funds in the following currencies — US Dollars (USD), UK Pounds(GBP), Singapore Dollar(SGD), Australian Dollar(AUD) and Euro(EUR).

A beneficial feature of this NRI account is that FCNR deposits are unaffected by exchange rate fluctuations, making them a good investment option for NRIs.

Now that you know the different types of NRI accounts, let’s discuss the NRI account benefits, features, and limitations.

Features of an NRI account

Transfer of funds – NRE and NRO accounts allow smooth transfer of funds. You can deposit funds from overseas into your NRI account, and it can be accessed by your parents, siblings or whomever you want. Some financial institutions like IDFC FIRST Bank also offer cheque facilities for family members of the account holder to access the NRO savings account easily.

Repatriation of funds – A salient feature of NRI accounts is the convenient repatriation of funds. But the limit for an NRI account varies according to its nature. NRE accounts allow full repatriation of funds, including the principal amount deposited and the interest earned. NRO accounts permit limited repatriation after necessary tax deductions on the income. The Reserve Bank of India (RBI) allows NRIs to remit up to $1 million per financial year. However, the income earnings from an NRO account can be fully repatriated.

Money management and operations – An NRO account helps you park your income earned from Indian sources. So, if you live abroad but continue to get rent from Indian properties or returns from investments in India, this becomes a huge NRI account benefit to manage the funds conveniently from overseas.

Joint account facility – Joint account facilities are also provided to NRI account holders. NRO accounts allow you to share your account with either resident Indians or NRIs on a former or survivor basis only. However, you can open a joint NRE account with another NRI or a resident relative on a former or survivor basis.

Net banking – Another helpful feature of NRI accounts is net banking. They provide net banking services for 24X7 access and monitoring of your account and funds in India.

NRI account benefits

Taking care of things back home – This NRI account benefit impacts your family and commitments. Inward remittance and transfer funds to India become easy, and so does taking care of your family, property, business, and other commitments from abroad.

Tax exemptions – Tax exemption is one of the biggest benefits of NRE accounts. The entire balance (interest + principal amount) of an NRE account is exempted from tax in India.

High interest rates – Another one of the NRI account benefits is receiving higher interest. NRE accounts in India offer competitive interest rates to its users that can be beneficial in the long run. For example, you get an interest rate ranging from 3.5% to 7% p.a. with an IDFC FIRST Bank NRE Savings Account.

Investment opportunities – This NRI account benefit allows you to invest the funds you park in your NRI account and grow. You can invest in start-ups, mutual funds, businesses and more through your NRI accounts.

Digital access – Accessing your account digitally allows you to keep track of transactions, currency fluctuations and leads to responsible financial practices.

An NRI account benefits both the user and resident Indians dependent on the user. Hence, if you are about to move abroad for a while or settle there, if you have family back in India that you want to transfer funds to, or a business you still need to look after, it is a good idea to open an NRI Account.

IDFC FIRST Bank offers multiple NRI Savings Accounts to suit you and your family’s needs. According to your necessities, you can choose between NRE, NRO, NRI Fixed Deposits and FCNR accounts, and that could be the first step towards a happy and hassle-free life abroad.



Next Story