{"id":30332,"date":"2020-04-04T17:28:33","date_gmt":"2020-04-04T11:58:33","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=30332"},"modified":"2020-11-24T15:23:30","modified_gmt":"2020-11-24T09:53:30","slug":"types-of-nri-bank-accounts-in-india","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/types-of-nri-bank-accounts-in-india\/","title":{"rendered":"Guide to the Types of NRI Bank Accounts in India"},"content":{"rendered":"<p class=\"has-drop-cap\">The banking and investment requirements of a Non-Resident Indian (NRI) or a Person of Indian Origin (PIO) are different as compared to that of a resident Indian as they reside outside India and most of their income and savings are in foreign denominations. Thus, this is important to have the right bank account that suits their requirements. Keeping in mind their banking and investment needs, they are allowed to open bank accounts out of the fund remitted in India or from the income earned in India. This guide talks about the different kinds of <strong>NRI banks accounts in India<\/strong> that can be opened easily by NRIs or PIOs.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What is an NRI Bank Account in\nIndia?<\/h2>\n\n\n\n<p>An NRI Account refers to the accounts opened by Non-Resident Indian (NRI) or a Person of Indian Origin (PIO) with banks and financial institutions, authorised by <strong><em><a href=\"https:\/\/www.rbi.org.in\/\">Reserve Bank of India<\/a><\/em><\/strong> (RBI).<\/p>\n\n\n\n<p>Many of the major banks and financial institutions in India offer facilities of opening NRI Accounts, which give numerous benefits with respect to transferability, currency denomination and <strong><a href=\"https:\/\/enterslice.com\/learning\/income-tax-for-non-resident-indians\/\">tax benefits to NRIs<\/a><\/strong> and PIOs to manage their wealth in India.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Types of NRI Bank Account<\/h2>\n\n\n\n<p>The following are the different kinds of NRI bank accounts that the\nNon-Resident Indian (NRI) \/ Persons of Indian Origin (PIO) can open:<\/p>\n\n\n\n<ul><li>Non-Resident Ordinary Account (NRO)<\/li><li>Non-Resident External (Savings) Account (NRE)<\/li><li>Foreign Currency Non-Resident (FCNR) Fixed Deposit Account<\/li><li>Resident Foreign Currency Account (RFC)<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Non-Resident\nOrdinary Account (NRO)<\/h3>\n\n\n\n<p>NRO account allows a person to manage their income\nearned from their employment in India. It is rupees denominated account that can\nbe opened in the form of saving, current, recurring deposit or fixed deposit.<\/p>\n\n\n\n<p>When an Indian citizen goes aboard for employment with\nthe intention to stay there, it is legally essential that the person gives\nintimation to the bank for the conversion of his saving account into an NRO\naccount. <\/p>\n\n\n\n<p>This type of account is subject to tax deducted at\nsource (TDS), which means that the principal and interest earned can be\nrepatriated only after deduction of applicable taxes.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Non-Resident\nExternal (Savings) Account (NRE)<\/h3>\n\n\n\n<p>NRE account is an account opened in India in name of\nan NRI to park his foreign earnings. This means that the account allows the\nindividual to transfer foreign currency earned outside to their bank account in\nIndia. <\/p>\n\n\n\n<p>One should keep in mind that the NRE Accounts are\nprone to exchange rate fluctuations. There might be a situation where the money\nthat is withdrawn is less or more than the actual deposit. <\/p>\n\n\n\n<p>There is tax exemption for this type of account and\ninterest is also exempted for the purposes of tax. This means both the\nprincipal and interest earned are tax-free and can be repatriated to India\nwithout any restrictions.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Difference between NRE and NRO\nAccount<\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>\n  <strong><a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Basis&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;In finance, the &amp;quot;basis&amp;quot; is a term with several applications, including representing the difference between the spot price and the future contract price of an asset, which is vital in investment(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/basis\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>Basis<\/a><\/strong>\n  <\/td><td>\n  <strong>NRO Account<\/strong>\n  <\/td><td>\n  <strong>NRE Account<\/strong>\n  <\/td><\/tr><tr><td>\n  Meaning\n  <\/td><td>\n  Account to manage income earned in India\n  <\/td><td>\n  It is an account to transfer foreign\n  income to India\n  <\/td><\/tr><tr><td>\n  Taxability\n  <\/td><td>\n  Interest earned in Taxable\n  <\/td><td>\n  Interest earned is tax free\n  <\/td><\/tr><tr><td>\n  Repatriability\n  <\/td><td>\n  Funds in NRO account are repatriated\n  after payment of applicable taxes.\n  <\/td><td>\n  Money from NRE account is freely\n  repatriable i.e., both principal and interest if freely transferable.\n  <\/td><\/tr><tr><td>\n  Joint Account\n  <\/td><td>\n  Can be open by NRI jointly with an\n  Indian citizen\n  <\/td><td>\n  It can be opened by NRI only\n  <\/td><\/tr><tr><td>\n  Exchange Rate Risk\n  <\/td><td>\n  Not prone to Risk of currency rate\n  fluctuations.\n  <\/td><td>\n  Prone to Risk of currency rate\n  fluctuations.\n  <\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\">Foreign\nCurrency Non-Resident (FCNR) Fixed Deposit Account<\/h3>\n\n\n\n<p>In this account, an individual can keep foreign\ncurrency in the same denomination in order to not get affected by the exchange\nrates in the country. This type of account is kept as a fixed deposit\naccount.&nbsp; The currency in this account is\nin the denomination of Pound Sterling, US Dollar, Japanese Yen, Euro, Canadian\nDollar and Australian Dollar. It is to be noted that the entire deposit i.e.\nthe principal and interest are tax free until NRI status is held.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Resident\nForeign Currency Account (RFC)<\/h3>\n\n\n\n<p>It is an account maintained by the NRIs when they\nreturn back to India, in foreign currency. This account allows parking of any foreign\ncurrency. One of the main features of RFC account is that the account can be\nconverted into NRE\/FCNR account if the status of account holder changes from\nresident to non-resident again.<\/p>\n\n\n\n<p>An RFC account can be opened by a person who is\nresident in India receiving foreign exchange from his employer abroad or by liquidating\nassets which were acquired when he was an NRI and repatriated to India.<\/p>\n\n\n\n<div class=\"read\"><p><b>Also, Read:<\/b> <mark><a href=\"https:\/\/enterslice.com\/learning\/money-transfer-from-overseas-nris-to-india\/\" target=\"_blank\" rel=\"noopener noreferrer\">Money Transfer from Overseas \/ NRIs to India<\/a><\/mark>.<\/p><\/div>\n\n\n\n<h2 class=\"wp-block-heading\">Benefit of NRI Bank Accounts<\/h2>\n\n\n\n<p>As an NRI, it is important to know the available <strong>benefits of NRI Bank Accounts in India<\/strong> in order to manage income and investment effectively and efficiently.<\/p>\n\n\n\n<ul><li><strong>Repatriation Advantages<\/strong>: NRI accounts have Repatriation benefit. Both NRE and NRO account allows smooth flow of fund. Funds in NRE accounts are freely repatriable whereas repatriation in NRO is subject to tax deduction.<\/li><li><strong>Balance requirement:<\/strong> There is no need to maintain high minimum balance requirement. Most of the bank has significantly dropped its minimum balance requirement to as much as Rs 10,000.<\/li><li><strong>Easy opening: <\/strong>Another advantage of NRI accounts are that it can open easily with only minimum mandatory documents. Most of the banks provide facilities to open NRI account without visiting branch in India.<\/li><li><strong>Investment benefit:<\/strong> NRI bank accounts allow the account holder to invest in Mutual Fund by linking their account with Investment saving account.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Documents Required to Open NRI\nBank Accounts<\/h2>\n\n\n\n<p>The following are the <strong>documents required for opening an NRE\/NRO account in India:<\/strong><\/p>\n\n\n\n<ul><li>Photocopy of\npassport.<\/li><li>Photocopy of\nVisa.<\/li><li>Address Proof\nof Foreign Residence &ndash; Utility bills, passport copy with foreign residence\naddress, driving license photocopy or any other relevant document as a proof of\naddress to foreign residence.<\/li><li>All the copies\nshall be attested by Embassy of India or any other overseas banker.<\/li><li>Self-attested Passport\nsize photograph &ndash; by signing across the photograph.<\/li><li>Work Permit\n\/Authorisation Letter for work in the foreign country<\/li><li>Birth\nCertificate<\/li><li>Marriage\nCertificate<\/li><li>OCI Card<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Conclusion<\/h3>\n\n\n\n<p>NRIs need to know their requirement, and the kind of financial transactions and income they are going to have in future before opening these accounts. One can opt for an NRO account, if total income includes income earned in India and want to manage it from India. An NRE account can be opened if individual want to transfer foreign income in India and avoid taxation liabilities. FCNR account is a Fixed Deposit Account andan NRI can choose to open any of these Bank accounts according to their banking requirements. Thus, opening of NRI Bank account helps Non-Resident Indians (NRI) or a <strong>Persons of Indian Origin<\/strong> (PIO) to send their earned income to India and at the same time, to retain their income from India in their home country.<\/p>\n\n\n\n<div class=\"read\"><p><b>See your Recommendation:<\/b> <mark><a href=\"https:\/\/enterslice.com\/learning\/income-tax-for-non-resident-indians\/\" target=\"_blank\" rel=\"noopener noreferrer\">Are you an NRI? Know the Tax Rules<\/a><\/mark>.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>The banking and investment requirements of a Non-Resident Indian (NRI) or a Person of Indian Origin (PIO) are different as compared to that of a resident Indian as they reside outside India and most of their income and savings are in foreign denominations. Thus, this is important to have the right bank account that suits [&hellip;]<\/p>\n","protected":false},"author":42,"featured_media":30372,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[2880],"acf":{"service_id":"215"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v14.6.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Guide to the Types of NRI Bank Accounts in India - Enterslice<\/title>\n<meta name=\"description\" content=\"As an NRI, it is important to know the available benefits of NRI Bank Account in India in order to manage income and investment effectively and efficiently.\" \/>\n<meta name=\"robots\" content=\"index, follow\" \/>\n<meta name=\"googlebot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta name=\"bingbot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterslice.com\/learning\/types-of-nri-bank-accounts-in-india\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Guide to the Types of NRI Bank Accounts in India - Enterslice\" \/>\n<meta property=\"og:description\" content=\"As an NRI, it is important to know the available benefits of NRI Bank Account in India in order to manage income and investment effectively and efficiently.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterslice.com\/learning\/types-of-nri-bank-accounts-in-india\/\" \/>\n<meta property=\"og:site_name\" content=\"Enterslice\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/enterslice\" \/>\n<meta property=\"article:published_time\" content=\"2020-04-04T11:58:33+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-11-24T09:53:30+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/04\/The-Types-of-NRI-Bank-Accounts-in-India.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"670\" \/>\n\t<meta property=\"og:image:height\" content=\"352\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:creator\" content=\"@enterslice\" \/>\n<meta name=\"twitter:site\" content=\"@enterslice\" \/>\n<!-- \/ Yoast SEO plugin. -->","authorName":"Ankur Goyal","authorImageUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/04\/Ankur-Goyal.png","authorDescription":"Ankur Goyal is competent and skilled Company Secretary having extensive in-depth knowledge and experience of handling various matters related Reserve Bank of India, SEBI and Corporate compliances.","postViews":652,"readingTime":4,"nextPost":{"id":30357,"slug":"the-indian-stamp-collection-of-stamp-duty-rules-2019-brought-by-the-finance-ministry"},"prevPost":{"id":30321,"slug":"why-cfo-should-move-away-from-numbers"},"featuredMediaUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/04\/The-Types-of-NRI-Bank-Accounts-in-India.jpg","postTerms":"Startup","_links":{"self":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/30332"}],"collection":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/users\/42"}],"replies":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/comments?post=30332"}],"version-history":[{"count":0,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/30332\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media\/30372"}],"wp:attachment":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media?parent=30332"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/categories?post=30332"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/tags?post=30332"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}