The NRIs have special banking needs, and as per the RBI rules, they can open and maintain only specific types of bank accounts in India. Read on to know more about the benefits of an NRI savings account.
Every year several Indians move overseas in search of a better job or business opportunity. Moving to a new country can be both exciting and overwhelming at the same time. Apart from finding a new home, settling in the new locality, adjusting to the new culture can be challenging. Besides, you must open a new bank account to remit funds to your family in India.
But, you cannot open an ordinary savings bank account. Once you attain the NRI (Non-resident Indian) status, as per the RBI (Reserve Bank of India) guidelines, if you wish to open a bank account in India, you must open an NRI account. If you have an existing savings account, you can convert the same to an NRI savings account. If you continue to hold a regular savings account, you will have to pay a hefty fine.
Today, almost all the major banks in India offer NRI bank account services. You can open a savings account with any bank of your choice, provided you meet their specific eligibility requirements. Typically, most NRIs open two types of NRI account, namely NRE (Non-Resident External) Account and NRO (Non-Resident Ordinary) Account. Both these accounts have distinct features and serve different purposes.
Let us look at the benefits of opening an NRI savings account
- Joint account holding
One of the key advantages of an NRI bank account is that the banks allow you to operate a joint account with either a fellow Indian or another non-resident Indian, depending on the type of savings account you hold. You can open a joint account with your children, spouse, or parents. This is a significant benefit, especially for the person in India who can operate the account and withdraw or deposit cash as and when needed.
- Specialised NRI services
If you operate an NRO account or an NRE savings account, the banks offer various specialised services, including international debit cards to all NRIs. This gives you the flexibility to shop globally, book air tickets, buy insurance online, and even withdraw cash overseas. However, you must prudently use the international debit card for cash withdrawal overseas as it may attract a fee.
- Easy to open and operate
With almost all the banks in India, offering online services, opening an account has become easier than ever before. The process of opening an NRI savings account is pretty similar to opening a regular account for Indian citizens. You must fill an online form, attach self-attested copies of the necessary documents, including resident proof, identity proof, proof of NRI status, employment details, etc. and send it to the bank in India. Once the bank reviews the documents, you can start operating the account immediately.
- Low minimum balance
One of the most common misconceptions among the NRIs about opening a savings bank account in India is that the NRI savings account requires you to maintain a huge minimum balance in the account. The truth is that with augmenting competition amongst the banks, the minimum balance required has reduced significantly. Today, you can open and operate NRI savings with a minimum balance as low as 10,000 INR.
- Tax benefits
The tax benefits you get from an NRI savings account deserve a special mention. If you hold an NRE account, the interest earned from your deposits is exempted from tax in India. If you have an NRO account, the interest earned is considered an income, and TDS is levied on the interest earned.
Final Word
Thus, there is more than one advantage of opening an NRI bank account. Ensure that you do your research well about the different types and open the right type to suit your specific needs.
