In banking terminology, an NRE account stands for Non-Resident External account. It is an account meant for Indians who are not residents of the country, that is, the NRI. In India, NRIs cannot hold resident savings account as it is deemed illegal according to the regulations set up by FEMA. You can suffer huge penalties if you are an NRI and continue to use resident savings account. That is why you either need to convert your existing account into an NRE account or open a new NRE account. There are several benefits an NRI can enjoy from having an NRE account, such as:
Ease of opening account- It is very easy to open an NRE account. Anyone residing abroad can easily open it. You just need to fill up an application form online, take a printout of it and then courier it along with a self attested copy of all the required documents to the bank in India.
Investment of overseas earning- Having an NRE account allows you to invest your overseas earning in India. You can save your earnings in it and you can then invest them in India at a later point of time.
Joint Account- A key feature of this type account is that you can open it with another NRI as a joint holding account.
Repatriable funds- The funds accrued in an NRE account are repatriable. Both the principle and interest are fully repatriable.
High rate of interest- It gives you high interest rates on savings account as well as on fixed deposit accounts.
Tax benefits- There are no tax levied on the interest earned in NRE accounts. The interest earned on both savings account and fixed deposit accounts are not taxable. This is one of the major benefits of NRE accounts, and hence one of the biggest reason why you should open one if you are an NRI.
Low minimum balance- Another key feature of this type of account is the low minimum balance required to open an account. You do not need to deposit huge amounts as some banks allow you to open an NRE account with a deposit as low as ten thousand rupees.
So, if you are an NRI it is a good idea to have an NRE account. It can act as a place where you can deposit your overseas earning and get good interest on it without having to worry about taxes. It also provides you investment options and you can easily convert all your foreign earnings into domestic currency when you visit the country.
Ease of opening account- It is very easy to open an NRE account. Anyone residing abroad can easily open it. You just need to fill up an application form online, take a printout of it and then courier it along with a self attested copy of all the required documents to the bank in India.
Investment of overseas earning- Having an NRE account allows you to invest your overseas earning in India. You can save your earnings in it and you can then invest them in India at a later point of time.
Joint Account- A key feature of this type account is that you can open it with another NRI as a joint holding account.
Repatriable funds- The funds accrued in an NRE account are repatriable. Both the principle and interest are fully repatriable.
High rate of interest- It gives you high interest rates on savings account as well as on fixed deposit accounts.
Tax benefits- There are no tax levied on the interest earned in NRE accounts. The interest earned on both savings account and fixed deposit accounts are not taxable. This is one of the major benefits of NRE accounts, and hence one of the biggest reason why you should open one if you are an NRI.
Low minimum balance- Another key feature of this type of account is the low minimum balance required to open an account. You do not need to deposit huge amounts as some banks allow you to open an NRE account with a deposit as low as ten thousand rupees.
So, if you are an NRI it is a good idea to have an NRE account. It can act as a place where you can deposit your overseas earning and get good interest on it without having to worry about taxes. It also provides you investment options and you can easily convert all your foreign earnings into domestic currency when you visit the country.
No comments:
Post a Comment