If you’re an NRI with savings and investments in a different currency, then an NRI account comes to your rescue. As per HDFC, an NRI Account is opened with a bank or financial institution which is authorised by the RBI, to provide various services. It involves facilities relating to currency denomination, money transfer etc to simplify the conversion of your savings’ currency. NRI accounts are of 3 types, NRE, NRO and FCNR. Although setting up this account is compulsory for NRIs, it comes with various advantages that you may not be aware of. So let’s check out some NRI account benefits.
NRI Accounts Benefits
1. Reduces Tax Liability
One of the most important NRI account benefits is the tax saving incentive. The Indian Income Tax Act 1961 says that an NRI may avail tax-free interest earnings on NRE (Non Resident External) and FCNR (Foreign Currency Non-Resident) accounts, except when the NRI does not have a tax liability in another country. Although NRO accounts are subject to taxes in India, there is an option to transfer funds from NRO account to NRE account after payment of applicable taxes.
Read More: NRI tax budget 2021: Benefits for NRIs in the Union Budget 2021
2. Repatriation – NRI Accounts Benefits
NRO (Non- Resident Ordinary) and NRE Saving Accounts offer smooth movement of funds. This is because NRIs can repatriate the principal and interest abroad. This means easy currency conversion of principal and interest. Funds in NRE Accounts are easily repatriable. But funds in your NRO Account are repatriable only after payment of applicable taxes.
3. Easy Account Set-up
The submission of documents for opening up the NRI account can be done from overseas, making the process a lot smoother and hassle-free for NRIs. The procedure is now completely online and mainly requires sending an application to open the NRI account.
4. Low Minimum Balance Needed
NRE and NRO accounts rarely need high balances. Nowadays, most banks require only ₹10,000 as the minimum balance to maintain the NRI accounts. Currently, the minimum balance for SBI’s NRI accounts is ₹3000 only.
Read More: Best Investment Plans for NRIs in India
5. FCNR Account Advantages
An FCNR account allows NRIs to save their earnings in foreign currency. This lets them to maintain a fixed deposit account and earn interest in foreign currency. Interest earned on FCNR deposits is also tax-free in India.
Pryank Agrawal is the Founder and CEO of Housewise, a leading property management startup serving customers across 34 countries with operations in 13 Indian cities, including Pune, Bengaluru, Hyderabad, Chennai, Delhi NCR, and Mumbai. An engineering graduate from IIT Roorkee, Pryank brings extensive experience from the software industry. His passion for leveraging technology to solve real estate challenges led him to establish Housewise, simplifying property management for homeowners worldwide. After persistent requests from existing customers to address other challenges faced by Non-Resident Indians, he founded MostlyNRI, a dedicated portal assisting NRIs with services such as taxation in India, degree attestation, certificate procurement, RTO and banking-related requests, will and inheritance matters, and much more.
