What are the Top Benefits of NRI Savings Account?
If you are an NRI who wants to open a savings account in India, consider many advantages of the products designed especially for your requirements. There are 3 major types of savings account to best suit your needs.
- Non-Resident External Account (NRE) – Park your earnings from your foreign country of residence, in an Indian bank account; converted into INR.
- Non-Resident Ordinary Account (NRO) – Save your earnings originating in India like rent, dividends, and proceeds from the sale of property; in terms of INR.
- Foreign Currency Non-Resident Account (FCNR) – If you want to deposit your earnings from abroad, in a higher value foreign currency, this could be your resort. The currency should belong to the list approved by the Reserve Bank of India (RBI).
Before opening a new bank account in any of these categories, take a look at these distinct advantages.
1. Advantage of Funds Repatriation
Both NRE and NRO accounts allow seamless movement of funds back and forth between your country of residence and India. You can repatriate both the principal and interest accumulated up to US$1 million (or an equivalent amount) per financial year with specific documentation. With free and convenient fund transfer options 24×7, all your needs regarding business transactions and travel can be easily met.
2. Reduced Tax Liability
The interest earnings on NRE and FCNR account are tax-free, as per the IT Act 1961. However, as per a proposal in the Union Budget 2020, your interest earnings may be taxable if you don’t have a tax liability in any other country. Also, savings in the NRO account are subjected to TDS.
Compare and choose the best interest rates before opening a bank savings account to make the most out of this advantage.
3. Attractive Exchange Rates on Inward Remittances
Get access to competitive forex rates, for funds received into your bank accounts. This could be from any account abroad. You also have the option to receive credit from third-party remittance providers. This is advantageous for you if you regularly send money to India, for your parents or other family members. Fees for incoming wire transfers are free, further reducing your costs.
4. Make Utility and Credit Card Bill Payments from Anywhere
You can not only make all your bill payments on time but also get reminders to pay them on time. Along with bill payments, you can also pay premiums, subscriptions, mutual fund deposits, tax bills, and charity donations all from the comfort of your home. This can be highly useful for you if you regularly make payments on behalf of your aged parents back home.
5. Advantage of Fixed Deposits
Apart from NRE/NRO fixed deposits, you can also choose FCNR fixed deposits for higher return potential than your overseas accounts. These fixed deposits are exempted from income tax in India. Moreover, you can enjoy the full repatriation of your principal amount and earned interest.
Before you open an account, make sure to research and compare all the terms and conditions of various banks to choose the best savings account.