Seamless banking for non-resident Indians: NRI account essentials

Did you know that an NRI account becomes mandatory once you become a Non-Resident Indian?

The Foreign Exchange Management Act (FEMA) states that once you become an NRI, your resident savings account will become invalid. You must open an NRI bank account to conduct financial transactions in India. Whether you want to make payments, collect income, or invest in India, an NRI bank account becomes necessary.

Let's explore NRI banking in detail for a hassle-free experience.

NRI account – the concept
 

An NRI bank account is an account designed specifically for NRIs. The account allows you to do the following -

• Send money from abroad
• Repatriate funds from India
• Make investments
• Avail of loans and insurance
• Conduct financial transactions in India, etc.

Moreover, you also earn interest on the balance maintained in the account, helping you grow your savings.

Also read - Discover IDFC FIRST Bank NRI Banking Service under 3 minutes!

Types of NRI accounts
 

There are two main types of NRI accounts – the Non-Resident Ordinary (NRO) Account and the Non-Resident External (NRE) Account. Let’s understand what these accounts are and how they differ from one another.

• NRO Account

The NRO account is a rupee-denominated bank account which is usually meant for depositing income earned in India like rent, interest, dividend, etc. The account also accepts foreign deposits which are converted to Indian Rupee (INR) and added to the balance.

The interest earned in the NRO account is taxable at 30% plus surcharge and cess. You can repatriate the interest income freely. However, repatriation of the principal is only allowed up to USD 1 million per financial year.

• NRE Account

The NRE account is meant for depositing foreign income, though the account is rupee-denominated. The interest earned from the account is completely tax-exempt, and it also allows limit-free repatriations.

A comparative analysis of NRO and NRE accounts
 

Let’s study the similarities and differences between NRO and NRE accounts.

Similarities
  

• Both the NRO and NRE accounts are rupee-denominated
• You can open a joint NRO or NRE account with an NRI (on either or survivor/former or survivor basis) or a resident Indian (on former or survivor basis only)

Differences 

Benefits of NRI bank accounts in India 
 

NRI accounts are not only mandatory, but they have their benefits, too. Let’s have a look at some of the primary ones 

• Seamless banking

NRI accounts allow hassle-free banking transactions. Whether in India or abroad, you can log into your net banking account and conduct your transactions online without any fuss.

• Attractive returns

If you choose the right NRI account, you can earn attractive interest income, which helps grow your savings. For instance, IDFC FIRST Bank NRI Bank Accounts allow up to 7% p.a. interest, which is credited monthly. Monthly interest credits allow compounding to work its magic and you can accumulate attractive returns.

• Repatriation facility

NRI accounts allow you to transfer your balance to your foreign bank account easily. This is called repatriation. Both NRO and NRE accounts allow the repatriation facility, though the former has some restrictions of repatriating up to USD 1 million per financial year, whereas NRE account allows full and free repatriation.

• Tax benefits

Lastly, let’s not forget the NRE account's tax benefits. You can earn tax-exempted interest income from the account, which adds to your savings.

How do you open an NRI bank account in India?
 

You can open an NRI bank account online (from anywhere in the world) or offline (when visiting India). The eligibility parameters and the documentation required are as follows –

Eligibility
 

The following individuals can open an NRI account –

• NRIs
• Persons of Indian Origin (PIOs)
• Overseas Citizens of India (OCIs)
• Indian citizens living abroad for studies or employment
• Seafarers who are working on international vessels
• Rig employees who are working on international offshore projects

Documentation
 

The documents required for the account opening process are as follows –

• Passport, which serves as your identity proof
• Proof of being an NRI like visa, PIO card, resident card or permit, etc.
• Proof of overseas address like driver's license, passport, latest utility bills, bank account statement, registered rent agreement, credit card statement, etc.
• PAN card or Form 60
• Recent photographs
• Signature (only for online application)

IDFC FIRST Bank NRI Accounts – the right solution for your banking needs
 

IDFC FIRST Bank offers a range of NRI bank accounts for your banking and financial needs along with a range of NRI banking solutions and additional benefits. Have a look –

• A digital bank account which is accessible 24X7
• Zero charges on 28 common banking services
• An easy mobile application for managing and tracking all your investments in one place
• Instant one-click investment in Portfolio Investment Scheme (PIS)
• A dedicated relationship manager for all your banking concerns
• Attractive currency exchange rates

Not to forget the attractive interest rate going up to 7% p.a. with monthly credits!

Also read - What NRIs visiting India must know about the gift tax rules and the right banking services

Open an NRI account and bank effortlessly
 

Compare the NRO and NRE accounts and choose one that aligns with your needs. Check the eligibility and open an NRI bank account for easy transactions back home.

Choose IDFC FIRST Bank’s NRI solutions and get more from the account. Enjoy seamless banking anytime, anywhere, with attractive returns on your savings. What else can you ask for?
 

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.