NRI Banking

Types of NRI Banking

3 min read

There are many types of NRI banking companies in India offering different kinds of bank accounts to suit the needs of customers. NRI account types vary from bank to bank and the most commonly available bank accounts are FCNR (Foreign Currency Non Resident), NRE (Non Resident External Accounts), and NRO (Non Resident Ordinary Account) Accounts.

FCNR

Foreign Currency account is a good option for NRIs who want to invest in India without incurring too much risk. This account is basically a term deposit type account which can be maintained in one of the approved currencies. It allows the account holder to earn interest on the funds that are maintained in the bank accounts. There are many types of NRI banking in India which have come up offering a wide range of options to the customers, such as:

  • All the funds including the interest are tax exempt
  • Avail the option of opening the FCNR account jointly with any other NRI
  • Banks provides the facility of overdraft on both the FCNR savings and current accounts
  • By taking the foreign currency account, account holders get to use the nomination facility
  • If one is planning to open a FCNR account along with an Indian Resident, then one has to check with the bank. Many banks have restriction on opening joint accounts with an Indian citizen or resident
  • Currencies such as US Dollar, Canadian dollar, Euros, Pound Sterling, Yen and the Australian dollar are approved for the FCNR account
  • Account holders don’t have the option to deposit the Indian currency using FCNR account
  • The minimum time to have the FCNR account is one year, where the maximum time is allowed to be 5 years.

NRE and NRO Account

  • Individuals residing overseas can open NRE bank accounts which is a tax-free account.
  • Having an NRE account with NRI banking providers makes it easy for account holder to transfer money in foreign currencies to India
  • Applicant can open NRE and NRO account as savings or fixed deposit account according to their needs. NRO accounts are Rupee funds which are generated in India which will be a taxable account.
  • Account holders earn the best deposit interest rates for investing funds with the banks and moreover there the interest earned for NRE account is tax exempt. Check to see what conditions on deposited money and 30% of interest earned is taxable.
  • Allows one to maintain the funds only in Indian currency in NRE and NRO account
  • If one is planning to open joint bank accounts, it can be done only with an NRI and not the residents of India for NRE bank accounts
  • Get the transfers done instantly to India
  • You can avail the option of nomination by taking the NRE and NRO account
  • One cannot deposit Indian currency in the NRE account but it is possible to deposit it in NRO account
  • Use NRO account to pay bills with these types of NRI banking in India
  • Money can be easily transferred from NRE to NRO account, but there is no option of transferring the funds from NRO to NRE bank accounts
  • Can also invest the money in mutual funds, forex trading etc according to individual choice

State Bank of India NRI services offers applicants the facility of opening an NRE and NRO account to earn interest on the funds that are transferred from foreign countries. HDFC Banking in India is the leading bank which offers the widest range of benefits to individuals with great returns. Standard Chartered Bank offers many types of NRI banking in India facility to all those individuals who wish to use NRI banking facility to invest foreign currency in India.

Get instant updates on currency exchange rate in various countries through BankandFinance.com and sign up for all types of NRI banking in India. Check out different banks to see which NRI account suits one’s needs and invest accordingly.