Non-Resident Indians, or NRIs, are people who have emigrated from India to another country. They often require financial services that are only available in their home country. This is especially true for people who want to send money back to their parents or other relatives who are financially dependent on them in the form of remittances. Along with this, emergency situations related to medical concerns or financial crises with friends or family members can require monetary assistance from people who live outside their homeland.
Also, it is worth noting that people living abroad are not permitted to create a standard bank account in India. The FEMA guidelines by the Reserve Bank of India (RBI) have made it mandatory for NRIs to open an NRI account to manage their earnings, depending on their source of income. For instance, to manage income generated in India, NRIs need to open an NRO account while for managing overseas earnings, they need to open an NRI account. At IndusInd Bank, NRIs can easily open an NRE or NRO account, based on their banking needs. In this write-up, let us learn about an NRE account and its benefits for NRIs.
What is an NRE Account?
People residing abroad can use a Non-Residential External (NRE) account to park their foreign earnings and manage them in Indian Rupees. NRIs can open this account in the form of savings, current, recurring deposit, and fixed deposit accounts as per their banking needs. An NRE account can be opened jointly with another NRI or a close Indian relative on a ‘Former or Survivor’ basis. Funds in NRE accounts are maintained in Indian rupees and this type of bank account enables NRIs to transfer their earnings to the members of their families for use. Besides, the interest earned on deposits in an NRE savings account is exempt from tax in India and NRIs can anytime fully and freely repatriate the funds including both the principal and interest earned on it.
How to Open an NRE Account?
The procedure for opening an NRE account with IndusInd Bank is very simple. As per their convenience, NRIs can choose between the offline and online modes.
Individuals who are comfortable with visiting a branch of IndusInd Bank can open an NRE savings account by simply following these steps:
- Download the account opening form (Note that you would require to have Adobe Acrobat Reader installed on your system to access the document)
- Fill the application form with the required details
- Affix a passport size photograph
- Attach the photocopies of your passport showing your details
- Attach a photocopy for your PAN Card / Form 60
- Attach a photocopy of your visa/resident permit/work permit
- Attach a photocopy as proof of your mailing address that you have mentioned on the account opening form
- Self-attest all the documents and take them to your nearest IndusInd Bank in India for verification.
While filling out the account opening form, you can also take the help of IndusInd Bank representatives in case of any assistance required.
Those who don’t have much time to visit the nearest branch can simply choose to open an NRE account online. The best part about this method is that you can have a face-to-face experience without stepping out of your home. The difference between offline and online methods is that you will be required to self-attest your documents before submitting them.
- Latest passport-sized photographs
- Photocopy of your passport with passport details and personal details
- Copy of your PAN Card/ Form 60
- Copy of valid proof of your NRI status
- Proof of address (foreign/Indian)
- Copy of CDC and Employment contract (if you are a seafarer)
5 Benefits of Opening an NRE Account:
- Quick Money Withdrawal
An NRE account holder is provided with an international debit card right after her/his formalities are approved by the bank. Withdrawing from an ATM anywhere in the world can be done easily with the help of this international debit card.
- Tax-free Banking
A lot of people worry about paying a large sum of money in the form of tax on their deposits. When it comes to an NRE account, you will not be required to pay tax. Along with this, the interest in your NRE savings account is tax-free as per the rules made by the Income Tax Department of India.
- Attractive Interest Rates
IndusInd Bank offers pretty decent interest rates on its NRI accounts including the NRE savings account. So, it is best to open this type of bank account for NRIs who wish to park their foreign earnings in India for a long period of time.
- Efficient Repatriation Service
Since you can repatriate both the principal and interest from your NRE savings account, the movement of money takes place in a smooth manner. An additional benefit is that NRE savings accounts are freely and completely repatriable, so you do not have to pay any taxes before sending money.
- Joint Account Holding
If you wish to open a savings account with an Indian resident or Person of Indian Origin (PIO), then NRE is the most suitable option for you. However, it is essential for the joint account holder to be a relative on a former or survivor basis.
An NRE savings account is the go-to banking solution for NRIs who wish to manage their finances in Indian rupees.