When you settle abroad, the question that arises is what you will do with the existing accounts? Usually, any savings account that you held in India would be ineffective as your foreign earnings cannot be stored in these accounts. So, how will you protect the hard-earned cash that you have got in India and where will you save your upcoming income? The only option that you have is to opt for the non-resident Indian (NRI) accounts that the banks offer.
These accounts are of two kinds:
1) Non-resident External (NRE) Account
2) Non-Resident Ordinary (NRO) Account
What is an NRO account?
It is similar to a current or savings account. It is the best account to vouch for to save your incomes in India. You can either open an NRO savings account, NRO current account or an NRO recurring account. Some banks also offer debit cum ATM card for NRO accounts. The type of cash that you can keep in the NRO account are:
1) Rental costs
2) Investment interests
3) Pension
4) Dividends
The interest that you earn on an NRO account is subject to tax. Unlike an NRE account, you cannot repatriate until a chartered account provides a certificate for the same. You can, however, open a joint account with an Indian or an NRI. You can open the account with an Indian resident only after submitting a letter of authority.
Some of the unknown facts and NRO account features are as follows:
1) The account follows only Indian currency policy.
The sole credit allowed in an NRO account are:
- Rupees coming from a non-resident account
- Remittances in acceptable currency coming from outside India via regular banking
- Valid dues of the account holder like rent, pension, interest, etc.
2) An NRI can withdraw cash from the NRO account. The amount should not exceed USD 1 million per annum.
3) You cannot repatriate the balance in the NRO account without prior permission from Reserve Bank of India (RBI)
4) You can opt for the nomination policy under the NRO account
5) You or the third-party person are subject to loans by the banks against the fixed deposits. The terms and conditions may vary from bank to bank
6) Facilities such as net banking can be availed of for an NRO account
7) You have to maintain a minimum balance of INR 10,000 per annum in the account
8) You can get lower tax rate on this account by submitting the Tax Residency Certificate
You have to handle your finances well before leaving abroad for employment. It helps your family members to access the income during an emergency.
These accounts are of two kinds:
1) Non-resident External (NRE) Account
2) Non-Resident Ordinary (NRO) Account
What is an NRO account?
It is similar to a current or savings account. It is the best account to vouch for to save your incomes in India. You can either open an NRO savings account, NRO current account or an NRO recurring account. Some banks also offer debit cum ATM card for NRO accounts. The type of cash that you can keep in the NRO account are:
1) Rental costs
2) Investment interests
3) Pension
4) Dividends
The interest that you earn on an NRO account is subject to tax. Unlike an NRE account, you cannot repatriate until a chartered account provides a certificate for the same. You can, however, open a joint account with an Indian or an NRI. You can open the account with an Indian resident only after submitting a letter of authority.
Some of the unknown facts and NRO account features are as follows:
1) The account follows only Indian currency policy.
The sole credit allowed in an NRO account are:
- Rupees coming from a non-resident account
- Remittances in acceptable currency coming from outside India via regular banking
- Valid dues of the account holder like rent, pension, interest, etc.
2) An NRI can withdraw cash from the NRO account. The amount should not exceed USD 1 million per annum.
3) You cannot repatriate the balance in the NRO account without prior permission from Reserve Bank of India (RBI)
4) You can opt for the nomination policy under the NRO account
5) You or the third-party person are subject to loans by the banks against the fixed deposits. The terms and conditions may vary from bank to bank
6) Facilities such as net banking can be availed of for an NRO account
7) You have to maintain a minimum balance of INR 10,000 per annum in the account
8) You can get lower tax rate on this account by submitting the Tax Residency Certificate
You have to handle your finances well before leaving abroad for employment. It helps your family members to access the income during an emergency.
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