NRI Account: NRI Accounts for Indians Living Abroad

A non-resident Indian resides abroad beyond a specified time for reasons like employment, higher education, business, vacation, or other purposes.

Are you an Indian living abroad? Maybe you work in the United States or run a business in Dubai. If so, you might be considering an NRI account.

NRI stands for Non-Resident Indian, and an NRI account is a special type of bank account in India that’s designed for people like you.

Nowadays it has become very common to go abroad and settle down. However, NRIs prefer to open bank accounts to help their family members who wish to return home.

NRI bank accounts are a perfect solution for non-resident Indians to manage their finances and expenses.

Creating an NRI savings account in India allows you to meet your family’s financial needs in India by investing in Indian markets.

Why would you need an NRI account?

Manage your money back home: Even though you live abroad, you might still have income or expenses in India. An NRI account lets you quickly transfer money in and out, pay bills, or invest in India.

Save in rupees: NRIs can earn interest on their savings in rupees. This can be a good way to grow your money for future use in India.

Tax benefits: Depending on the type of NRI account you have and the tax treaty between India and your country of residence, you might get some tax benefits.

Typs of NRI Accounts

There are two main types of NRI accounts. Classified as Non-Resident Ordinary (NRO) and Non-Resident External (NRE) accounts.

NRE Account

NRE account is for deposits made from your earnings abroad. The money in this account can be freely transferred in and out of India.

An NRE account includes international income earned outside India. In this background, please provide more details about NRI accounts.

NRO Account

NRO account is for deposits made from funds already in India, like rental income or pension. There are some restrictions on transferring money out of an NRO account.

An NRO account holds tax-free domestic income from real estate sales, rent, residential rental investments, etc.

Required Documents to create an NRI account

Copy of current passport.
Copy of Permanent Account Number (PAN) or Form-60 should be submitted in case PAN is not available.
Copy of current work permit, visa or overseas resident card.
The address for the document must match the address provided in the application.
Along with the required documentation to create an NRI account you need to send a picture from your personal account, initial payment cheque/draft in addition.
Documents from authorized representatives of Scheduled Commercial Banks with Indian registration are required for branches abroad.
Indian Embassy/Consulate General in the country where the non-resident client resides.

NRI Account Benefits

NRI accounts are opened jointly with Resident Indians. But only on an ex or survivor basis.
Currency in NRE and NRO accounts is in Indian Rupees.
The principal amount and the interest earned in NRE accounts can be fully repatriated.
Money can be transferred from NRO account to NRE account after paying applicable taxes.
Interest earned on NRE accounts is not taxed in India.
To open an NRI account you need to complete the KYC procedure.
Certain documents like NRI account opening form must be kept ready.
These may vary from bank to bank. But you can get pdf regarding NRI account opening form on official bank websites.

Conclusion

Opening an NRI account can be a smart way to manage your finances in India while living abroad. If you’re interested in learning more, talk to your bank or do some research online.

FAQs

Can I open an account in my country even if I am abroad?

Yes, you can I open an account in your country even if you are abroad.

What are NRI bank accounts and who are they suitable for?

NRI bank accounts are designed for non-resident Indians to manage their finances and expenses, especially those who have family members or financial interests in India.

What are the types of savings accounts available for NRIs?

NRIs can opt for either Non-Resident Ordinary (NRO) or Non-Resident External (NRE) accounts, each serving different purposes.

What is the difference between NRO and NRE accounts?

An NRO account is for holding tax-free domestic income like rent, real estate sales, etc., while an NRE account is for holding international income earned outside India.

What documents are required to open an NRI account?

You’ll need copies of your passport, PAN card or Form-60, current work permit/visa, and proof of address matching the application. Additionally, a picture from your personal account and an initial payment cheque/draft are required.

Do I need documents from Indian authorities to open an NRI account?

Yes, you may require documents from authorized representatives of Scheduled Commercial Banks with Indian registration or from the Indian Embassy/Consulate General in your country of residence.

What are the benefits of having an NRI account?

NRI accounts can be opened jointly with Resident Indians, offer the flexibility of repatriating funds, and provide tax benefits such as tax-free interest on NRE accounts.

Can money be transferred between NRO and NRE accounts?

Yes, funds can be transferred from an NRO account to an NRE account after paying applicable taxes.

Is the interest earned on NRE accounts taxable in India?

No, the interest earned on NRE accounts is not taxed in India, providing a significant advantage to NRIs.

What is the KYC procedure for opening an NRI account?

To open an NRI account, you need to complete the KYC procedure, which involves submitting required documents such as the NRI account opening form. These requirements may vary from bank to bank.