NRI banking facts that you need to know before settling abroad

In the course of the years there are a number of Indians who have settled overseas. They have either established their own businesses or built a successful career for them there and are sending money to their near and dear one in India.

With more and more transfer of money from abroad to India and vice versa, the NRI banking rules and regulations have evolved continuously. Today, there are a number of banks as well as non-financial institutions that have been authorized by the Reserve Bank of India (RBI) to deal in NRI banking. This means the maintenance of NRI bank accounts, aiding in money transfer, insurance as well as loans.

When it comes to NRI banking, Indian living abroad can opt to open the following type of accounts-

• Foreign Currency Non-Resident Account (FCNR) - Such accounts are meant for term deposits, with a time duration that can either be up to one year or even 3 years.
• Non-Resident External Account (NRE) - This account holds Indian rupees. Thus foreign money that is transferred to the account is converted to Indian money before it is deposited.
• Non-Resident Ordinary Account (NRO) – It is a normal savings bank account that is held by an NRI in the country.

Here are some facts that one should know about NRI banking in India-

1. An NRI bank account and all activity that is related to it can be handled by an individual who is living in the country, on the behalf of the account holder. The account holder only has to give this trusted person the power of attorney. But, the person who holds the power of attorney does have certain limitations. He cannot make gifts of the money that is there in the bank account and is also not allows to transfer money outside the country.

2. Another important fact that an NRI should know is that he can invest in shares as well as securities of companies and organizations that are Indian. In fact, an NRI can also invest in government securities. One can make such investments through their NRO/NRE account.

3. NRI’s should be aware that any interest that they earn on deposits made in their FCNR bank account is exempted from tax deduction under the Indian NRI banking tax law. Thus, they can make effective use of their FCNR bank account to build-up some savings.

4. NRI’s should be aware that any interest that they earn on deposits made in their NRO bank account is not exempted from tax deduction under the Indian NRI banking tax law.

NRI banking in India has a number of features that one should be aware of in order to take full advantage.

Why to create a FCNR account for your child when they move abroad

In the past years taking trips or settling down in foreign countries was a luxury that only the rich could afford, today a number of parents can think of sending their children to America, Britain or other countries to pursue higher studies or make a career for themselves. They generally take this life changing decision with the help of some savings or an education loan. Thus, the world today has literally become a global village, and many Indians do opt to pursue further education in other countries and settle down there for good. 

They do have parents or families back in India, which is why they continue to remain in touch with their traditional roots. Moreover, India has great investment options, including attractive property as well as stock prices. Thus, NRI’s find it financially beneficial to invest in property in the country, and play the field in the Indian stock market. Moreover, they also benefit from the attractive interest rates they can take advantage of by investing in fixed deposits.

In order to make good investments in the country or even when it comes to sending money to one’s parents or family, it is best for an NRI to hold and account in the country. It may be an NRE, NRO or FCNR account. One can also open all three accounts as each has a different purpose.

A parent opening any type of account for their child abroad, be it an NRE or an FCNR account, should first ensure that they are aware of all the rules and regulations that are set up for NRI banking by the reserve Bank of India (RBI). The RBI keeps making alterations and amendments to the laws, which is why one should keep themselves up-to-date in order to make the most of them.

What is an FCNR account?

An FCNR account is basically a term deposit, which means that it is a type of fixed deposit account which earns interest on savings.

Parents with children abroad, can open FCNR account for their offspring, so that their kids can start saving in foreign currency. It is highly likely that kids studying abroad take up side jobs and internships where then get paid. They can save this money in a term deposit and also earn interest on it.

Moreover, the Indian government allows deposit in the FCNR account in 6 different currencies, namely, the US dollar, Australian dollar, Euro, Japanese Yen, Pound Sterling and Canadian dollar.

One can definitely make the most out of an FCNR account with attractive interest rates.

Did you know the online money transfer is the quickest way to send money?

In the past years, transferring money from one bank account to another meant that one had to pay a visit to the bank, stand in a long queue and submit a cheque. In case of any mistakes on the cheque the money would fail to transfer and one would have to pay another visit to their bank office. The fact that it is time consuming is a drawback. But with the advent of computer technology, banks have upgraded and making transactions have now become faster and simpler.

With the introduction of computers and the internet, banks came up with a new way of making transfers and money transactions- Internet banking.

Internet banking involved online money transfer, which made banking extremely easy for those who had laptops and computer systems at their office and homes. But individuals who did not have access to computer systems had to still transfer money the traditional way.

Today, technology has become more advanced and internet banking cannot only be done through computer systems and laptops, but also through smart phones/tabs etc. As a result online money transfer and other online facilities have become the smart way of banking.

In fact, online money transfer is not only hassle free but also one of the quickest ways to send money to another person’s bank account. While, the traditional method of money transfer is a very slow process, online money transfer can be done in a matter of a few minutes, and the money is transacted into the recipient’s account in an extremely short period of time, generally within 24 hours or even lesser.
  
With online money transfer one can not only send money to recipients within the country, but can also transfer money to their family and friends living in other countries. While one does have to incur a small transfer fee, online money transfer proves to be much faster and efficient as compared to wire transfer.

In fact, a number of different online money transfer and payment services have come up in the past few years. These services are generally available in mobile apps, which one can register and use. Some these online money transfer services include PayPal, Paytm, Google wallet etc.

Therefore, in this time and day one should learn how to work with internet banking and various other phone apps that allow one to make transactions online. The world has become more and more competitive and everyone is living a fast paced life. Online money transfer makes life simpler and hassle free, especially when it comes to banking.

What is the fastest way to send money to India?

A lot of people living abroad have friends and relatives in India. Sometimes individuals living abroad may need to wire money to India for personal or business purposes. With the banking sector having a global presence in the current times, it has become quite easy to send and receive money to and from any part of the world. With more and more people working abroad the amount of money being sent to India from other countries has increased over the years.

There are several ways of sending money to India, but the fastest and the most popular ways have been mentioned below:

1. Online Transfer:
If one wants to send money to India, they can do so through online transfer. You only need some basic information about the recipient to do this. This includes the name, address and bank account details of the recipient in India. If you have internet connection and online banking facilities transfer of money to India can be done from the comfort of your own house.

2. Paypal:
Paypal is a money transfer service which allows one to transfer money easily and quickly. Paypal service is mobile friendly and the sender does not have to incur any transfer fee though the recipient is required to pay a minor cover fee at times.

3. Xoom:
Xoom is a money transfer service which has recently gained popularity among those NRIs who send money to India from the United States of America. This transfer service assures that the money is transferred to the recipient in India in just a few minutes. Once the amount has been transferred to the given bank account in India, a message is sent to the registered mobile number.

4. NRI/NRE accounts:
This is one of the safest ways to transfer money to India. To transfer money in this manner one must first open an NRE account.  Through this method one can basically deposit a given amount in say US$ and the authorized recipient in India will receive it in the bank account in Indian rupees. This kind of transfer may not be instant. It usually takes a few working days for a successful transfer but then this kind of transfer is not only safe but non-taxable as well.

The four most popular, quick and safe methods of transferring money to India have been explained above. Now the choice of the best method, depends on the urgency of the transfer and the purpose of the transfer as well. If the transfer is not urgent and one does not want to incur any transfer charges, they can opt to use NRI/NRE account transfer.

How to avoid getting a rejection on your home loan application

Everyone dreams of owning a home which they can call their own. But the reality is that with real estate prices rocketing sky high, this dream may take some time and lots of effort to come true. But a home loan can help one in fulfilling this dream.

A home loan is basically a loan which is given by a bank to the borrower to buy a house or a property. The loan amount sanctioned depends on several key factors including the credibility of the borrower, the collateral which will be deposited by the borrower and his/her credit history.

There are several simple techniques which a borrower may use to assure that his/her loan application is not rejected. They are-

1. Ensuring no faults in the paperwork: In order to apply for a home loan, one needs to submit some essential paperwork which involves identity proof, income proof, current financial statements and other statements as the bank may require. The simplest way in which one may assure that the loan is not rejected is by checking and re-checking their paperwork so that it is complete and is in accordance with the requirements of the bank.

2. Assuring that one has a decent credit score: Every bank considers the borrower’s financial history before even considering the home loan application. This is done by calculating one’s credit score.  One should maintain a credit score that is above 600, in order to ensure that their home loan is approved.
There are several activities which can negatively affect one’s credit score, including delayed credit card payments and outstanding debts. Even if your guarantor has a bad credit history or a backlog of payments the credit score suffers. So, one must keep in mind to that they have a respectable credit score for a quick home loan apporval.

3. Stability of income: To assure that the loan is sanctioned one must be able to prove to the bank that they have a reliable and a steady source of income.  A new job or an unreliable one may lead to rejection of the application.

4. A proper location and a clear land title: A bank will always assure that the property that one is planning to purchase with the loan amount has a clear and a well- marked title. This is to ensure that there is no dispute regarding its ownership in the future. This is a basic criterion which must be fulfilled.

If one fills in their loan application by keeping the above points in mind, their loan application will surely not get rejected.

Reasons why health insurance is a necessity today

Good health is the key to a happy and successful life. But with a hectic and stressful schedule and unhealthy lifestyle most individuals are not very fit. One often avoids dealing with they own health issues. Considering all these factors, it becomes essential that one has health insurance as it is as basic as having a bank account or being educated.

Hospital bills for very minor to major ailments can put a strain on one’s finance. Sometimes medical bills hamper the savings of an individual. Getting quality and timely treatment for cure can also become a major problem due to lack of finances. All these problems can be easily solved by having a health insurance.

Having a health insurance will assure that an individual and his loved ones have access to quality healthcare in case anyone suffers from an ailment at any given point of time.  A health insurance covers medical bills and in lieu of this one is required to pay an annual premium. The sum depends on the health condition of the insured while the policy is made, the total amount of coverage provided and the scheme that the individual opts for. The following expenses are usually covered under a regular health insurance scheme:

• Pathological tests and other investigations prior to hospitalization
• Ambulance costs
• All hospital costs including room charges, consultation fees, charges for various procedures performed, cost of medicines, charges for medical tests and investigations including blood tests, scans and any other form of diagnostic tests.
• Charges incurred post-hospitalization for recovery of the insured individual, which includes cost incurred for investigations, medicines, procedures including physiotherapy and other such treatment usually for up to two months post-hospitalization.

With healthcare becoming more and more expensive each day, hospitalization may cost a person a few lakhs and this may severely affect their savings and may even lead to debt. This will negatively affect one’s financial condition. Here the role of health insurance becomes important. By paying a given sum to the insurance company every year one can ensure that when they fall sick and require hospitalization their medical bills are taken care of by the health insurance company.

In fact, there are many health insurance schemes that provide cashless benefits to their insured customers. These companies have direct tie-ups with several hospitals and so the company pays the bills without one requiring to spend even a rupee to clear the hospital dues.

Based on the benefits mentioned above one must consider getting a health insurance if they do not already have one.

Here is how to use your ATM card smartly

Almost everyone have ATM cards these days. It is commonly used for making payments and paying bills. The main benefit of using ATM cards is that one does not require to keep cash with them. This means they one saves time by not waiting in long ques to withdraw cash from the bank as well. ATM cards can be used to make online payments and withdraw cash from ATM machines which are found almost everywhere today.  Most people have one or more ATM cards, but do not use it efficiently.

There are a few ways through which one can use his ATM card efficiently.

1. Increase the credit limit of the credit card:
As a customer of the bank you may ask the bank to increase the maximum credit limit on the credit card. This will help make more withdrawals and purchases in a month without immediately paying the amount spent.

2. Always claim rewards:
As a customer one does get several advantages or reward points when some specific expenses are made, depending on the terms specified by the financial institution. The benefits may involve availing higher discounts on purchasing by using collected reward points, access to airport lounges or even en-cashing reward points. As a smart customer one must try to use their credit card in a manner which helps them accumulate these reward points and avail greater benefits.

3. Pay dues on time:
Making complete payments on one’s ATM card and clearing existing dues assures that you do not have to pay any late charges. If you think you may not remember to clear the credit card bill on time, one may also opt for direct deduction of the bill amount from their account to avoid late payment charges.

4. Check your credit card bill:
An intelligent and a smart customer will always check his ATM card bill before making any payment. One should carefully review and scrutinize their credit card bill each month to assure that they are only paying for what they have spent.

5. Secure ATM card information:
The internet is filled with hackers and scammers who may misuse debit or credit card information. To avoid such a mishap always assure that when you are making an online payment it is authenticated and secured. In case of any anomaly one should immediately contact their bank.

By keeping these little tips in mind and following them, one can smartly and efficiently use their ATM card and avail maximum benefits and perks as a valued customer of the bank.