If you are a Non-Residential Indian (NRI) or a Person of Indian Origin (PIO), you will have different banking and investment needs. Since you are residing abroad, most of your income and savings will be in foreign denominations, e.g. US dollar, Euro, etc. As such, you might need an account that would suit your requirements.
Many major banks and financial institutions in India offer the facility of opening an NRI Account. These accounts provide numerous facilities with respect to the currency denomination, transferability of the amount, tax, etc. But do you know everything about NRI Accounts? Let’s learn in detail what is an NRI Account and the different types of NRI Accounts.
NRI Account Meaning:
AnNRI Accountrefers to the accounts opened by a Non-Resident Indian (NRI) or a Person of Indian Origin (PIO) with a bank or financial institution which is authorised by the Reserve Bank of India (RBI), to provide various services.
Here are the types of NRI Accounts that you can opt for, to meet your financial requirements.
- Non-Resident External (NRE) Accounts
- Non- Resident Ordinary (NRO) Accounts
- Foreign Currency Non-Resident (FCNR) Accounts
- Non-Resident External (NRE) Accounts
The Non-Resident External (NRE) Account allows you to transfer your foreign earnings easily to India. However, this type of account is rupee dominated and can be opened in the form of Current, Savings, Fixed or Recurring Deposits.
It is vital to know that there is no tax levied on the interest earned from these accounts, i.e. they are tax exempt, and they are also easily repatriable, i.e. transferable. These accounts can be jointly opened with close relative Resident Indian on Former or Survivor basis.
- Non- Resident Ordinary (NRO) Accounts
The Non-Resident Ordinary (NRO) Account are primarily opened for depositing rupees earned in India. Foreign earnings can also be deposited in this account. When an Indian citizen goes abroad for a job with an intention to stay there, his resident accounts should be converted into an NRO Account by the bank. Therefore, it is essential to inform the bank about the individual's departure abroad.
Also, it is vital to know that NRO Accounts are rupee dominated and can be opened in the form of Savings, Current, Recurring Deposits or Fixed Deposits. These accounts can be jointly opened with any Resident Indian on Former or Survivor basis.
- Foreign Currency Non-Resident (FCNR) Accounts
The Foreign Currency Non-Resident (FCNR) Account can be opened in different currencies such as US Dollars, Canadian Dollars, Australian Dollars, Sterling Pounds, Euro, Japanese Yen, etc. TheseFCNR Accountscan be opened in the form of term deposits for the following maturity periods:
- 1 year and above but less than 2 years
- 2 years and above but less than 3 years
- 3 years and above but less than 4 years
- 4 years and above but less than 5 years
- 5 years.
It is essential to know that the entire deposit, i.e., principal and interest is tax-free until you hold the NRI status and is easily repatriable.
Looking to open anNRI Account? Click here to get started!
Want to know about how NRIs can take advantage ofcurrency fluctuations? Read more!
* The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circ*mstances.
FAQs
An NRI Account refers to the accounts opened by a Non-Resident Indian (NRI) or a Person of Indian Origin (PIO) with a bank or financial institution which is authorised by the Reserve Bank of India (RBI), to provide various services.
What is NRI account and its types? ›
Types of NRI Accounts
As mentioned earlier, there are three types of accounts available to NRIs in India – NRE stands for Non-Resident External Account, NRO stands for Non-Resident Ordinary Account, and FCNR (Foreign Currency Non-Resident) bank Account.
What is the meaning of NRI bank? ›
NRI's full form is Non-Residential Indian. NRI Banking is a pivotal financial service catering to the unique rеquirеmеnts of Indian citizens residing overseas.
What is the difference between NRI and regular bank account? ›
As per RBI Regulations, a Non-Resident Indian (NRI) cannot open and operate a regular resident Savings Account and further, any account should be converted into NRI Account by the bank before one gets NRI status.
What is required for NRI account? ›
Checklist of documents required for opening an NRI account in India. While applying for an NRI account, you need to produce some specific documents like identity proof, overseas address proof, NRI status proof and other tax-related details under a mandatory KYC process.
Can an NRI have a normal account? ›
As per the Foreign Exchange Management Act (FEMA) guidelines, an NRI cannot have a savings account in his or her name in India. You must convert all your savings (money earned abroad) to a Non-Resident External Account (NRE) or Non-Resident Ordinary (NRO) account.
Why do you need an NRI account? ›
NRI accounts allow you to hold and transact in foreign currencies, which can be beneficial for managing your foreign income or savings without the need for frequent currency conversion. NRI accounts are versatile as they allow you to hold multiple foreign currencies.
Is NRI an Indian citizen? ›
Resident status when you leave for employment outside India
Thus, if you are an Indian citizen and you live outside India for 182 days or above, you will be an NRI.
Can I open my NRI account online? ›
NRE / NRO savings bank account can be opened as per any of the following mode: Through online mode: Please click here to fill application online and send it to Global NRI Centre in India as per the steps mentioned therein.
Do I need to convert my bank account to NRI account? ›
Once your resident status changes to an NRI, you will need to either close or convert your resident account to an NRO account. Under the prevailing FEMA regulations, you will be considered an NRI if: You are residing overseas (except Nepal or Bhutan) for more than 182 days in one Financial Year (April-March); or.
Enjoy a range of NRI savings accounts based on your requirements and choose an account that suits your needs. Park your income from your country of residence or in India and transfer funds seamlessly anywhere, anytime.
Can an NRI buy property in India? ›
NRIs can buy both residential and commercial property in India but not agricultural land, farm houses, or plantation properties. However, if an NRI is willing to purchase agricultural land in India, it requires permission from the Reserve Bank of India for doing so.
What is the benefit of NRI account? ›
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. Easier operations within India – An NRI Account allows you to perform banking operations easily within India, even while you may be staying abroad.
What is the difference between OCI and NRI account? ›
The most basic difference between OCI and NRI is that an NRI is an Indian citizen who does not reside in India for more than 182 days in a year. On the other hand, an OCI cardholder is a person who was eligible to be an Indian citizen after the establishment of the Constitution.
How to identify a NRI account? ›
An NRI Account refers to the accounts opened by a Non-Resident Indian (NRI) or a Person of Indian Origin (PIO) with a bank or financial institution which is authorised by the Reserve Bank of India (RBI), to provide various services.
Does NRI have to pay tax in India? ›
Yes, an NRI has to file an income tax return in India on income earned in India. NRIs have to pay tax on income that accrues or arises in India. NRIs also need to pay tax on income that is deemed to accrue or arise in India. Money received or deemed to be received in India is taxable.
