5 min read
Updated on Sep 08, 2023
A Non-Resident Indian or NRI is an individual who has been residing in a foreign country for more than 120 days in a year. Also, an individual who lives in a different country for employment purposes is an NRI. However, there are some NRIs who want to have their bank accounts in India. How do they do it? Well, they can open an NRI account. Let us read on to know it!
The bank accounts that are opened by an NRI or a Person of Indian Origin (PIO) are called NRI accounts. An NRI account in India has to be opened with a bank that is authorized by the Reserved Bank of India. Other than banks, these accounts can also be opened with other financial institutions. The money deposited by the NRIs in these accounts can either be originated from India or any other country.
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To open an NRI account, one has to follow some eligibility criteria, which include the below-mentioned:
If an NRI wants to open an account in a bank or any financial institution in India, he/she has to submit certain documents. The NRI account opening documents include:
The documents may vary as per the financial institution.
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As the advantages of opening an NRI account in India are concerned, here are some of them mentioned below:
1. A good investment plan for NRI
NRIs who are staying away from India but want to make their investment portfolio more diverse can invest in an NRI account. An NRI account helps buy or sell stocks, mutual funds, and other assets.
2. The minimum balance is low
In an NRI account, the minimum balance that has to be maintained is quite low, which is INR 10,000. Therefore, one does not have to be bothered about maintaining a high balance in the account.
3. More than one currency is deposited
One of the benefits of an NRI account is that the NRIs can deposit funds in this type of account and the currency can be of the country in which they are residing. This can be done through FCNR deposits.
4. Tax benefits
NRIs who open an NRE or FCNR account get to earn extra income in the form of interest. And this additional income is totally tax-free. However, the interest earned from NRO accounts is taxable.
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There are several types of NRI accounts. Some of them include:
|Basis of Difference||NRE||NRO||FCNR|
|Purpose||NRE account is for depositing income in India which has been earned in any other country||NRO Account is for depositing income that an individual earns in India||FCNR account is for depositing earnings in foreign currency in an Indian account|
|Deposit Currency||Foreign Currency||Indian Rupee||USD, GBP, AUD, SGD, CAD, CHF, HKD, EUR, JPY|
|Withdrawal Currency||Indian Rupee||Indian Rupee||Foreign Currency|
|Taxation in India||Not taxable in India||30% tax rate applicable||Not taxable in India|
|Exchange Rate Risk||NRE account has foreign exchange risk due to currency fluctuations||No foreign exchange risk||No foreign exchange risk|
|Repairability||The deposits and the interest earned on them are completely repatriable||Deposits made in this account are repatriable to the NRI’s country of residence with some limits||The deposits and the interest earned on them are completely repatriable|
|Joint Account with NRI||Permitted||Allowed||Permitted|
|Joint Account with Indian Resident||Not Permitted||Permitted||Not Permitted|
|Types of Accounts||Current Account, Savings Account, Recurring and Fixed Deposits||Current Account, Savings Account, Recurring and Fixed Deposits||Term deposits only|
|Loan against deposit||The loan is given in Indian Rupees.||Available, in Indian rupees||Available, in foreign currency, however with certain restrictions|
There are quite many banks in India that offer NRI accounts. Here are some of them mentioned below:
Now, all that you need to do is to choose the right financial institution in which you can open an NRI account. And while you try to open an NRI account, you must ensure of checking the terms and conditions first.
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