How to turn your NRI accounts into a financial partner

As an NRI, you might be using your NRI account for deposits and withdrawals. Your family back home may be using the funds to meet their needs, and you may be sending money from abroad regularly. But do you know that an NRI account can do more?

NRI accounts are multifaceted financial tools that not only cater to your banking needs but also facilitate holistic financial planning. With different types to cater to different needs, NRI accounts can help you manage your finances in India and abroad. Let’s understand how.

The benefits of NRI accounts
 

Besides being a gateway for banking transactions, here’s how NRI accounts can aid in effective financial management -

1. Income management
 

NRI accounts are offered in two primary variants - 

a. Non-resident ordinary (NRO) accounts, which are meant to deposit the income earned in India

b. Non-resident external account (NRE) accounts, which are meant to deposit incomes earned abroad

Depending on your income, you can choose a suitable NRI account and manage your earnings effectively. You can use the income to fund your obligations in India or repatriate the earnings abroad to meet your expenses.

2. Repatriation
 

Both NRE and NRO accounts allow easy transfer of funds abroad through repatriation. While NRO accounts have a restriction on the repatriation limit (up to $1 million), the NRE account doesn’t. This allows you to repatriate your account balance to any country and use the funds at your discretion.

3. Investments
 

NRI accounts give you the perfect solution to explore investments in India. With the funds held in your NRO or NRE account, you can explore investment opportunities in India. This can help with portfolio diversification and wealth creation opportunities.

As an NRI, you can use the NRI account balance to invest in -

a. Mutual funds

b. Real estate

c. Gold

d. Shares or stocks

e. National Pension System (NPS)

f. Portfolio Investment Scheme (PIS), etc.

Moreover, the foreign currency non-resident (FCNR) account allows you to invest in fixed deposits (FDs) denominated in international currency. You can choose your resident country’s currency and open an FCNR account for stable and assured returns. Since the account is denominated in foreign currency, you can also cut down on exchange rate risks for efficient savings.

4. Tax planning
 

NRI accounts offer interest income on your savings. While this is a plus, what sweetens the deal is the tax benefit available. Interest income earned from NRE and FCNR accounts is tax-free in your hands. This helps you create tax-efficient savings for your financial goals.

Moreover, you can invest in tax-saving avenues like Equity Linked Savings Schemes (ELSS), NPS, 5-year FDs, etc. and enjoy tax deductions under Section 80C. These deductions help lower your tax liability in India and are good for tax planning. 

5. Bill payments
 

Do you have bill payment obligations in India?

If you do, your NRI account can make the task easier!

You can set up auto debit mandates on your NRI accounts and automate bill payments. It also works for automated investments in India, like Systematic Investment Plans (SIPs) or recurring deposits (RDs).

Automating bill payments can help avoid missed deadlines and late fees, making expense management easier.

6. Remittances

Foreign remittances also become easier with NRI accounts. With an NRE account, you can send money to India, and with an NRO account, you can send money from India abroad.

NRI accounts facilitate online remittances worldwide, making fund management easier. You can send and receive money anywhere in the world with the right account. Additionally, if you select the right bank, such as IDFC FIRST Bank, you can enjoy competitive interest rates that minimise remittance costs.

Difference between NRO, NRE and FCNR accounts
 

Now that you know the different types of NRI accounts, let’s analyse them to understand which account serves what purpose -

Make the most of NRI accounts with IDFC FIRST Bank

IDFC FIRST Bank NRI Banking Services provides comprehensive solutions for all your financial management needs. Whether it is rewarding NRI accounts or a choice of investments, you can choose what you need.

IDFC FIRST Bank NRI accounts offer the following benefits -

1. Seamless account management
2. Hassle-free remittance solutions
3. Ease of one-touch PIS accounts
4. Higher interest rates of up to 7.25% p.a. with monthly credits
5. Zero charges on all savings account services
6. Seamless mobile application for easy financial management from anywhere in the world
7. Dedicated relationship manager
8. Fast and efficient fund transfers without any processing fees

Explore IDFC FIRST Bank NRI Banking Services for smarter account management, tax-efficient investments, and seamless remittances.