All you need to know about NRO accounts

These are the key highlights for an NRO account or the Non-resident ordinary accounts in India.

You can land your money from your foreign earnings in India.

With an NRO bank account you can avail of free money transfers at competitive exchange rates. You can also add an Indian resident as a joint holder of your bank account.  As an NRO account holder you are also entitled to get a free mandate card and cheque book for your family in India and due to this you can also provide them access to your bank accounts anytime and anywhere.

Now let us get into the details of what exactly is an NRO account

An NRO account or a Non-resident ordinary account is a savings account that enables you to maintain your income earned in India such as rent dividends, pension so on and so forth.

Why should one go for an NRO account?

Non-resident Indians should go for an NRO account because of the assurance it gives to manage the local rupee earnings in India efficiently even as you are living your life abroad. You can also easily predesignate your account when you change the status from resident to a no resident Indian.

Now lets us dive right into the characteristics and the benefits of having NRO accounts

There is a much higher yield post tax, one can avail of this benefit by the DTAA benefit facility.

Anyone who holds an NRO account can avail of low cost and hassle free money transfers which are readily available through myriad offline and online modes at competitive exchange rates.
Another benefit is that not much balance is required to maintain the NRO account, just Rs 10,000 is required to do the needful.

With the help of a domestic ATM cum debit card  you can have anytime and anywhere access to your NRO account at over 11000 ATMs and over 3000 branches  all over India plus one has the facility of the phone banking and 24x7 net banking as well.

The interest rates calculated on daily closing balances are at 4% per annum and the interest is paid on a half yearly basis and in the months of June and Decembver. The interest that is earned in the current financial year is completely repatriable but this is only after the tax has been deducted.

Another benefit is the safe and simple online money transfer tracking service with online transfer to over 100 banks in India.

An NRO account can also have a joint holding with an Indian resident or an NRI; what’s more you can also predesignate your NRO account when you become an NRI however your account number doesn’t change.

Here’s all you need to know to know about NRE accounts

The key highlights of a Non-Resident External (NRE accounts) are as follows: This is a safe way to land your foreign income earned outside India.

The money transfers are free and at competitive exchange rates

You can enjoy full repatriable of your money and earn tax-free interest in India.

You can also get a free mandate card and cheque book for your family in India and this can help you provide them anytime anywhere access to your account.

Now lets us know what exactly is an NRE account - an NRE or a non-resident external account is a saving account maintained in where you invest your foreign income earned outside India.

Why should one opt for an NRE account?

An NRE account lets the account holder enjoy tax-free interest and full repatriable of funds and also because of the fact that this is the most convenient way to use your foreign earnings in India.

Let's dive right into the other benefits and characteristics if an NRE account

No interest amount that you have earned in India on of your foreign money is taxable.

All the funds in an NRE account are fully repatriable and they are not charged for repatriation.

The minimum monthly account balance needed to maintain an NRE account is just Rs 10,000.

With an international Debit card you can access your bank account at over 11000 ATMS and over 3000 branches all over India and phone and the 24x7 net banking as well.

The interest rates that are calculated are done on daily closing balances at 4% per annum; the interest is paid to you half yearly in the month of June and December.

The money transfer service of your foreign money to the banks or financial institutions in India is safe secure and easy. You can transfer your money to over 100 banks in India and you can also track your transfers.

You can hold a joint account with another NRI as well.
There are a lot of other benefits as well, there are free cheque books and ATM cards for the mandate holder and what’s more there are also handpicked exclusive offers that are designed especially for the NRE account holders that cater to all your need when you are in India and abroad. Not to forget the free PO Box facility that is available to send documents.

The monthly average balance that is required to maintain an NRE account is just Rs 10,000 at an account level and you have to keep a minimum balance of Rs 25000 at a customer id level, if in case for some reason you are not able to maintain this balance at a savings bank account level services charges will be levied on your account.

Do you know how to open an NRI account from overseas?

All non-resident Indians are allowed to open non-resident accounts external accounts and non-residential ordinary accounts so that they are able to open savings bank account or fixed deposits with different banks in India.  However, it is quite evident that many NRI’s find it very difficult to visit banks in India in order to complete their banking formalities which are why their bank account information is impeded. In order to combat this issue, they can now open their bank accounts from the comfort of their homes overseas by just following these simple steps.

Download the form – The form for no n fact to face account opening is now made available on websites of almost all the banks. Whichever NRI wishes to open a bank account has to first download the form and fill it up so that the account can be opened. Some banks also provide the user with the facility to fill up the form online so that one doesn’t have to download it.

Attestation – some of the documents have to be attested by the Indian consulate as is the prerequisite for most banks for the opening of an NRI account. An NRI can get the documents attested from the consulate or an overseas bank or make it notarized from a foreign notary. If you wish to submit additional approved proof with self-attestation that is allowed as well.

Additional Know your customer – Some banks might want the applicant for the NRI account to fill up the document that pertains to the KYC or the “Know your customer”  in order to disclose the tax residency status  and related details under the  Foreign Accounts Tax Compliance Act (FATCA) and Common Reporting Standard(CRS) requirements. For this some additional proof needs to be submitted to the bank which would have to be submitted along with the documents that are mandatory for the opening of the bank account and the account opening form.

Dispatch – now once all the aforementioned steps have been done, all the documents duly stamped and signed 9one has to cross check several times so that nothing that is required is missing. Because if anything is missing, the banks will reject the documents and they will be asked to send them once again after rectifying their mistakes which might end up in being an unwieldy and lengthy procedure) once the cross checking has been done and all the documents are in place, they have to be sent or dispatched to the bank branch. Alternatively some of the banks provide PO box services in certain countries where the NRI can drop the application in a PO Box with a PO Box number.

Do you want an education loan? Here’s how you can avail it.

Whether you are buying a house or about to be going in for higher education, loans are common today. The college fees are increasing every year a lot of the people don’t really have any option, they have to apply for an educational loan. For instance the engineering courses, the fees could be Rs 5 to 10 lakhs and if one wants to pursue a medical degree in a  private medical college, the cost will go up to Rs 50 lakhs. For postgraduate courses on management and other courses as well, the fees can shoot up to more than Rs 10 lakhs.

It is not unknown that fees in private colleges are more than the fees in government colleges.
When going in for educational loans it is advisable to do a proper research so that you know pretty well what you are exactly looking for. Banks offer educational loans up to Rs 10 lakhs for courses in colleges in India, and a sum of up to 20 lakhs for studying abroad and these payout of loans are in absolute accordance with the banks’ association norms, however in case of post graduate courses in premier management colleges in India for instance IIM or   institute of Management, banks offer loans up to Rs 20 lakhs. These loans cover the tuition fees, examination fees, library fees, laboratory fees and hostel fees and they cover the costs for purchasing books, equipment, instruments and uniform, travel expenses for studies abroad, caution deposit or refundable deposit so on and so forth. There are at times limits on them and the education loan also covers expenses for the project tours and study tours.

What are the conditions for sanctioning the loan?
The lender checks on safe things before the loan is sanctioned. The first and foremost check that is carried out by the lender is to be sure whether the student who applied for the loan has actually enrolled or secured admission for a course or not, after that the quality of the course and the college will also be taken into consideration whether it si certified by UGC or any other university of technical education. The lender also checks whether after doing a course the student will be able to get himself a secured job so that the repayment of the loan is a breeze. The lender also checks the credit history of the co-applicant or the guarantor. At times some education loans are backed by property mortgage, in such cases the lender will also thoroughly check the value of the property.

When an education loan is availed from a bank, loans for tuition fees, examinations, library and every other charge are directly paid to the educational institutions.

Everything you need to know about Portfolio investment Schemes

The portfolio investment scheme allows NRIs to invest in shares of Indian companies, in secondary market, on repatriation and non-repatriation basis through a registered stock broker on recognised stock exchange NRIs can invest in repatriation basis under the PIS 5% of the paid up value and capital of each series of debentures of Indian companies that are listed within the limits that are overall permissible and these are subject to compliance with Reserve Bank of India guidelines. The Non-Resident Indian customer has to take delivery of the shares purchased and give delivery of the shares sold.

If one wants to make an investment on the basis of repatriation, he would have to make it from the funds available through the inward remittance of foreign exchange banking channels that are the usual or out of the money that are held in the NRE or FCNR banks accounts that are maintained in India.

Below are enlisted some of the main characteristics of NRE Portfolio Investment Scheme

One cannot transfer the shares by way of sale under private arrangement that have been purchased by the NRIs on the stock exchange under PIS  or by way of gift  to a residential Indian or outside India without the prior approval of RBI

The NRIs have to open a Non-Resident Rupee (NRE), Passenger Information System (PIS) account  so that they can invest in the secondary market on repatriation basis NRO savings bank account will have to be made use of if any investments are to be made.  The NRI’s can maintain the NRE PIS account which is independent of NRE savings bank (SB) account for their other needs. To deduce the proceeds of the share sale. The PIS account will be used, and all these transactions will have to be reported to the Reserve Bank of India.

The NRIs cannot maintain multiple Portfolio Investment Schemes accounts  with various banks  Both the purchase and the sale contract notes  should be submitted by the NRI in original within one day or maximum 2 days  from the execution of the contract  to the designated branch  with whom the PIS account is maintained. The sole responsibility os on the NRI for the submission of the contract notes to the designated branch of the AD bank.

SBI offers the facility of opening NRE PIS account for its NRI customers who have a KYC compliant NRE Savings Bank (SB) account that the bank maintains . For new customers all these accounts can  be opened simultaneously. The PIS account is mapped to the NRE savings bank account that is being maintained with any of the SBI branches so that the customer is able to execute trades. The PIS account is used to be settling funds that have arisen out of sale and purchase transactions.

What are the most common 4 methods of international money transfer?

There are various alternatives available to transfer money to India. However, it is mandatory to research about it ever more and make sure you choose the best while you send your money.

Online Transfer
This is the simplest method for an international money transfer. To do this all one requires is an internet connection and you also should be using the local banking services to send the money to an Indian account. Some other important things that you will be requiring to do this successfully are the account holder’s address and obviously his/her name, the name of the bank of the recipient, the IFSC code and the branch address to which the money will be sent. You will also need the IBAN or SWIFT code of the bank the money is being sent to. This method is mostly suggested if you regularly transfer funds. You can get rid of the steep banking charges and you can also carry out the transaction from the comfort of your home.

ACH transfer
Automated clearing house is another way of international money transfer and is used for transferring money from an Indian account to an account in the US.  A huge advantage of such a method to transfer money is, you can get rid of long bank queues, you will not have to worry about hidden costs, you will also not be required to send checks for the money transfer to materialise. When the money is transferred in this manner, the bank gets the sum that has been sent in the next four working days. This amount can be delivered to the payee on the next day.

Paypal transfers
Another method of electronic money transfer from one account to another throughout the world. Paypal money transfers can also be cloaked as an online money transfer method. While sending the money through paypal be sure that you won’t be charged a penny, however, the one who receives the sum will be asked to pay a nominal charge of 3.9% on every international money transaction along with the exchange rate of the transfer.

Wire Transfer
One of the most commonplace methods of transferring money internationally is the Wire Transfer method. This method requires the sender to visit a financial institution or a bank or bureaus that cater to international money transfer, for instance Global Exchange, book my Forex,  Western Union, Remit2India, and transfer the money. This wire transfer international money transfer service first takes all the required details about the person or persons the money is being sent to from the person sending the money, the sender is also supposed to divulge the bank details of the money recipient. One those facts are collated, the bureau then starts the transfer procedure which takes the next few days to complete.

What are the different Types of NRI bank accounts and NRI services?

Have you just become a Non Resident Indian? This is for sure one of the most important and crucial problem that you might be facing now is with regards to a bank account in India. Are you aware of the various NRI services available to an NRI and the kind of bank accounts you can maintain in India? There are mainly three kinds of NRI bank accounts one can maintain they are 1. NRO 2. NRE 3. FCNR

Let us know about these NRI banking accounts a little more deeply.

i. Ordinary non-resident rupee account– These are primarily rupee governed NRI bank accounts that are non repatriable and these can either be in the form of savings, recurring, fixed deposits or current accounts. All of these accounts can be jointly opened with Indian residents.  When a resident of India takes up a job abroad, his bank account automatically gets labelled as an NRO account. Now all the deposits made into this accounts can be used for all authentic payments in the Indian currency.This is one NRI service that should be availed of.

ii. Non resident external rupee accounts – Non resident Indians (NRI’s), Persons of Indian Origin (PIO’s), overseas corporate bodies (OCB’s) all are worthy of opening NRE accounts. These NRI bank accounts again are primarily rupee governed accounts and these can either be in the form of savings, recurring, fixed deposits or current accounts. These accounts can be opened by money paid in support of funds in free foreign exchange. So any foreign exchange that is accounted legally for or any repatriable income of the account holder can be deposited in the account. What’s more, you can jointly operate these NRI bank accounts with other NRIs and PIOs and a power of attorney too can be given to other Indians so that they can conveniently operate the accounts. When talking about NRI banking this is one such bank account which is more than useful.


iii. Foreign currency accounts – This is another NRI services in
India available to non-resident Indians (NRI’s), Persons of Indian Origin (PIO’s) and overseas corporate bodies (OCB’s). They are allowed to open such bank accounts in US, Australian and Canadian Dollars, Pounds, Yen and Euros. However something worth noting with regards to this is that such NRI bank accounts are to be opened only for term deposits that would amount to the following time periods –
1. one year or more however less than two years,
2. two years or more however less than three years,
3. three years or more however less than four years and
4. 4 years or more however less than five years or
5. just complete five years.

iv. Non resident rupee deposit accounts (NRNR accounts)  - Non-resident Indians (NRI’s), Persons of Indian Origin (PIO’s), overseas corporate bodies (OCB’s) are allowed to open such bank accounts by transfer of freely convertible origin currency funds from abroad or NRE or FCNR accounts. Non resident accounts can open such accounts in conjunction with other non residents except Pakistani and Bangladeshi people. What’s more the deposits to such accounts can be held jointly with a resident. The time frame for such deposits range from6 months to 3 years and then it can be renewed again.