Being an NRI has its plus points and drawbacks. While you do get to pursue your dreams and aspirations, you also have to ensure your family members are safe and sound not just physically but also financially. Indian banks have a plethora of investment options to offer the non-resident Indians (NRIs) such as different bank accounts, investments in the forms of securities and debts, and investments in immovable properties like real estate.
Bank accounts are generally the safest options as you can either open them individually or in joint form. The types of accounts that NRIs can operate are NRE account, NRO account and FCNR account.
Let us learn in detail about each account:
1) NRE accounts: You can save money in rupees on this account. You can also freely move your asset from a foreign country to your home country through NRE accounts. They can be in the form of savings, current, recurring or fixed deposits. Since it is a rupee dominated account, you have to change your foreign currency to rupees before depositing. Also, whenever you wish to transfer the funds to your overseas account, you have to convert them to the respective country currency.
Some of the critical features of an NRE account are:
- You can freely move your NRE balances
- The balance held, and interest earned through NRE accounts are tax-free
- You can withdraw deposits prematurely from NRE accounts
- NRE accounts can be operated through power of attorney, although for a limited period, for the purpose of withdrawal and remittance
2) NRO accounts: This is also a rupee dominated account. You can invest in such accounts if you receive income in India such as rent, dividend, commission, etc. Such revenue cannot be deposited in an NRE account. Unlike the NRE accounts, the interest earned through NRO account is taxable. Any NRI or Person of Indian Origin (POI) can open the NRO account barring people from countries like Nepal and Bhutan.
3) FCNR account: The Foreign Currency Non-Resident (FCNR) account allows only foreign currency. It is similar to a fixed deposit on which interest is paid. You can open a joint FCNR account with other NRIs as well as with Indian residents. One of the significant advantages of opening an FCNR account is that they do not have to bother about currency fluctuations. Moreover, the interest earned via FCNR account is exempted from tax. You can deposit the following currencies in the account:
- US dollar
- Australia dollar
- British pound
- Euro
- Japanese Yen
- Canadian dollar
Some other investments options for NRIs include shares and real estates. Make a wise decision and be rooted in your country in a hassle-free manner.
Bank accounts are generally the safest options as you can either open them individually or in joint form. The types of accounts that NRIs can operate are NRE account, NRO account and FCNR account.
Let us learn in detail about each account:
1) NRE accounts: You can save money in rupees on this account. You can also freely move your asset from a foreign country to your home country through NRE accounts. They can be in the form of savings, current, recurring or fixed deposits. Since it is a rupee dominated account, you have to change your foreign currency to rupees before depositing. Also, whenever you wish to transfer the funds to your overseas account, you have to convert them to the respective country currency.
Some of the critical features of an NRE account are:
- You can freely move your NRE balances
- The balance held, and interest earned through NRE accounts are tax-free
- You can withdraw deposits prematurely from NRE accounts
- NRE accounts can be operated through power of attorney, although for a limited period, for the purpose of withdrawal and remittance
2) NRO accounts: This is also a rupee dominated account. You can invest in such accounts if you receive income in India such as rent, dividend, commission, etc. Such revenue cannot be deposited in an NRE account. Unlike the NRE accounts, the interest earned through NRO account is taxable. Any NRI or Person of Indian Origin (POI) can open the NRO account barring people from countries like Nepal and Bhutan.
3) FCNR account: The Foreign Currency Non-Resident (FCNR) account allows only foreign currency. It is similar to a fixed deposit on which interest is paid. You can open a joint FCNR account with other NRIs as well as with Indian residents. One of the significant advantages of opening an FCNR account is that they do not have to bother about currency fluctuations. Moreover, the interest earned via FCNR account is exempted from tax. You can deposit the following currencies in the account:
- US dollar
- Australia dollar
- British pound
- Euro
- Japanese Yen
- Canadian dollar
Some other investments options for NRIs include shares and real estates. Make a wise decision and be rooted in your country in a hassle-free manner.
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