What are the benefits of having NRI Account

Top 5 Benefits of NRI Account

A Non-Resident Indian (NRI)/Person of Indian Origin (PIO) can open NRI Account as Non-Resident External (NRE) and Non-Resident Ordinary (NRO) Accounts, which will enable an easier and convenient fund transfer for him/her from abroad to India. Both of these accounts allow the amount in foreign currency to be credited in the account. However, NRE Account does not allow any rupee credits into the account and is, therefore, suitable only if one needs to transfer overseas income and funds in an Indian bank account. It also provides you with additional benefits like repatriability, preferential tax treatment, etc.

NRI Account Benefits:

1. Convenient money transfers to India – Whether one has opened an NRE or NRO Account, one can deposit the income earned in overseas country in such accounts. Thereafter, the funds can be accessed through any bank branch in India as well. Accordingly, having an NRI Account in India is an easier mode of remitting money to India from overseas. Given the existing banking relationship, you can also expect competitive exchange rates for such funds transfer.
2. Flexibility of repatriation of funds – The current regulations in India allow flexibility in the repatriation of the balance available in NRE Accounts, for both the principal as well as interest income. In simple words, the balance in NRE Account can be transferred back to the foreign country without any restrictions. However, in case you open an NRO Account, you can transfer the interest income earned in such account without any limit, but certain limits are applicable on transfer of the principal amount as per extant forex regulations in force.
3. Better interest rates – The focus of the Central Banks across the globe has been to adopt the decreasing interest rate scenario, and in line with such philosophy, other banks provide very low-interest rates on the Savings Accounts. On the other hand, NRE Accounts in India tend to offer better interest rates. As such, an NRI Account can help you garner better returns for your surplus funds.
4. Easier operations within India – An NRI Account allows you to perform banking operations easily within India, even while you may be staying abroad. The bank will generally allow you to register the operational mandate to allow the operations of the bank account on your behalf. Such a mandate can be registered for your parents, relatives, spouse, siblings, etc. A cheque book and ATM Card can also be provided to the mandate holder, to enable easy withdrawal of the funds. Further, an NRO Account can also allow you to open a joint account with a resident Indian, allowing joint operations.
5. Tax exemption for NRE interest income – As per the prevailing tax laws in India, the interest income earned on NRE Accounts is not subject to Income Tax and thus remains tax-free for the account holder. Due to this exemption, the bank will not deduct any tax in respect of such interest income on NRE Savings Account or NRE Fixed Deposit. However, the exemption is applicable only for NRE Accounts and not for NRO Accounts. Accordingly, the bank will deduct tax at source for such interest income on NRO Accounts.

As such, NRIs can manage their money in a better manner through NRI Accounts and conveniently manage the fund transfer from abroad to India effortlessly.

DISCLAIMER

The contents of this document are meant merely for information purposes. The information contained herein is subject to update, completion, revision, verification and amendment and the same may change materially. The information provided herein is not intended for distribution to, or use by, any person in any jurisdiction where such distribution or use would (by reason of that person‘s nationality, residence or otherwise) be contrary to law or regulation or would subject lClCl Bank or its affiliates to any licensing or registration requirements. This document is not an offer, invitation or solicitation of any kind to buy or sell any security and is not intended to create any rights or obligations. Nothing in this document is intended to constitute legal, tax, securities or investment advice, or opinion regarding the appropriateness of any investment, or a solicitation for any product or service. Please obtain professional legal, tax and other investment advice before making any investment or availing any product and services Any investment decisions that may be made by you or any decision to avail any product and services shall be at your sole discretion, independent analysis and at your own evaluation of the risks involved. The use of any information set out in this document is entirely at the recipient’s own risk. The information set out in this document has been prepared by ICICI Bank third party based upon projections which have been determined in good faith by lClCl Bank third party and from sources deemed reliable. There can be no assurance that such projections will prove to be accurate. lClCl Bank does not accept any responsibility for any errors whether caused by negligence or otherwise or for any loss or damage incurred by anyone in reliance on anything set out in this document. In preparing this document we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to us or which was otherwise reviewed by us. Past performance cannot be a guide to future performance. ‘lClCl’ and the ‘I-man’ logo are the trademarks and property of lCICl Bank. Misuse of any intellectual property, or any other content displayed herein is strictly prohibited.”