Whats is a NRE and NRO Acount ?
To make that clear, NRIs (Non-Resident Indians) who receive or keep cash in foreign countries and wish to do transactions in India tend to use NRE and NRO accounts. These are Indian NRISpecial bank accounts.
NRE Account
An NRE account is a special bank account in India that is meant to house the foreign earnings that non-resident Indians (NRIs) have in Indian banks. The savings account is operated using Indian Rupees and the deposits are done in foreign currency and converted to INR. Among the greatest advantages of an NRE account is the fact that interest earned on the account is completely tax free in India and the principal and the interest can be repatriated at will to the country of residents of the NRI. The NREs may also be held in common with another NRI, which is convenient in that the families can control the savings. This kind of an account is best suited to NRIs who are willing to save their foreign earnings in India and also make tax free interests and at the same time enjoy the option of sending money abroad at their own convenience
NRO Account
NRO is a bank account in India that is aimed at Non-Resident Indians (NRIs) to transfer the income they earned in India, i.e. rent, dividends, pensions or business earnings. The account is kept in Indian Rupees and the interest charged on the account is subject to tax in India. Repatriation of money in NRO account is also curtailed as compared to NRE, to a maximum of USD 1 million annually and must be duly documented. NROs can also be shared with another NRI or an Indian resident and this is useful in managing family income in India. This kind of account is very suitable to the NRIs with Indian revenue streams and wish to use their funds effectively whilst remaining within the confines of the Indian tax and banking laws.
Documents Required for NRE/NRO Accounts
1. Evidence of Identity (POI)- Passport, OCI/PIO card and
Other government-issued ID
2. Evidence of NRI Status- NRI status placed on a valid visa, Work permit or residence permit and Overseas citizenship proof (OCI/PIO).
3. Proof of Address (POA) – NRE accounts Current foreign address proof(utility bills, bank statement, rental agreement), NRO accounts Can be foreign address proof or Indian address proof (property/income sources in India)
4. Passport-Size Photographs –Â Recent color photographs to bank specifications.
5. Additional Documents – PAN card (required in case of Indian income-related accounts such as NRO) Overseas bank account details (to transfer funds in and out of the country), For joint account identity and address proofs of all account holders.
1. State Bank of India (SBI)
- Provides a wide range of NRI banking products such as NRE and NRO and so on.
- It has a good network in India and internationally
- SBI NRE Accounts
2. HDFC Bank
- Famous with its customer-focused approach and novel banking solutions.
- Offers various services to NRIs such as NRE and NRO accounts.
- HDFC NRI Accounts
3. ICICI Bank
- Offers different types of NRI accounts according to your requirements in foreign countries.
- Proffers NRIs smooth banking services.
- ICICI NRI Accounts
4. Axis Bank
- Provides NRE and NRO accounts at good interest rates and minimum balances.
- Offers various NRI banking service.
- Axis Bank NRI Accounts
5. Kotak Mahindra Bank
- Provides NRE and NRO at favourable rates of interest.
- Offers various NRI bank services.
- Kotak Mahindra NRI Accounts
Major Factors When selecting a bank in NRE/NRO
In deciding the bank to open an NRE or NRO account in India, NRIs need to be very keen on a number of critical issues so as to have convenience, safety as well as the maximum benefits. First, you must compare interest rates that they provide on deposits as it differs according to the bank and may significantly affect your earnings. Second, verify the minimum balance requirement so that you do not incur penalties or charges particularly when you intend to keep the account overseas. Third, assess digital banking services of the bank, such as the online and mobile banking, which is essential to the NRIs that must be able to operate their accounts remotely. Fourth, make sure that the bank will offer easy repatriation services to make sure funds, both principal and interests, can be transferred outside the country without incurring unnecessary delays and paperwork. Lastly, we have the quality of customer service where timely service is an essential factor to NRIs with banking problems when they are beyond the same time zone. These factors will ensure that NRIs are able to select a bank that best suits them in terms of financial requirements, convenience and security as they manage their income and investments in India
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