In India, residents, as well as NRIs, can open bank accounts to manage their finances. But before you learn about the bank account options available for NRIs, you need to know what is NRI. An NRI account is available for individuals who have spent less than 365 days within the country in the last four years or have been outside the country for a minimum of 120 days in a year. Scroll through this article to learn about the top types of bank accounts available for NRIs.
An NRE account is ideal for NRIs to keep their earnings in foreign currency. After depositing your funds in foreign currencies, the funds will get transferred into the Indian rupee. Therefore, the prevalent exchange rate will be applicable during currency conversion.
You will be able to make withdrawals from an NRE account in Indian rupee. If you look into the NRE account meaning, you will realize that it comes with free transferability. You will be able to easily transfer the principal as well as the interest amount without any limitations.
Moreover, the interest earned on the balance of your NRE account is free from taxes. An NRE account can be jointly owned by two NRIs.
If you understand who is NRI, you will know that an NRO account is also suitable for them. These accounts are suitable for NRIs to deposit their Indian as well as foreign income. The income sources for an NRO account can include rent, pension, dividend income, and more.
NRO account holders can keep foreign as well as Indian currency in their accounts. They can easily withdraw the funds from an NRO account in Indian currency. However, some restrictions are associated with the repatriation of funds from an NRO account.
You can freely transfer the interest earned in an NRO account. But for the principal amount, you can only repatriate up to $1 million throughout a single financial year. Moreover, the interest earned in an NRO account attracts TDS.
An NRO account can be jointly opened with another NRI or an Indian resident.
FCNR is a type of NRI account where your funds in a foreign currency won’t be exchanged into an Indian rupee. Therefore, an FCNR account eliminates the risk of foreign currency exchange. However, an FCNR account can be opened for a fixed period, like a fixed deposit.
The principal, as well as the interest amount in an FCNR account, can be easily transferred to foreign countries. NRIs don’t need to pay any tax on the interest generated through an FCNR account.
NRIs cannot use regular savings accounts in India to park their income. If you are an NRI, you will be able to choose from an NRE, NRO, and FCNR account to keep your savings in India. At IDFC FIRST Bank, you can enjoy the best NRI banking services. So, explore the different NRI account options and open the most suitable account as per your needs.