Everyone always requires money, especially in unfavourable conditions. You should have enough funds to meet your requirements. It is safer to remain prepared for most financial conditions and start saving today. Living in India or elsewhere, you cannot survive without savings and earnings.
Funds generated overseas in other currencies get transferred to India in Indian Rupees in the Non-Resident External or NRE Account. You receive multiple benefits by opening this account. Let us discuss them in detail:
Indian Rupee account
The NRE Account is an Indian Rupee account. The initial funding generally happens through fund transfer from any other NRE or Non-Resident Ordinary or NRO Account you hold or by depositing foreign currency or traveller’s cheques if available.
Joint account
You can open and transfer money from the account, considering the NRE Account interest rates. Only NRIs can hold a joint account. Holding it jointly with resident family members is not permissible. The account holder can issue a mandate authorising a family member to operate the account in their absence.
Nomination facility
The NRE Savings Account also allows a nomination facility where you can repatriate both the principal and interest components. It enables you to access Savings Accounts, Current Accounts, Fixed Deposits, etc.
Deposit and withdrawal currencies
Deposit foreign funds and withdraw them in Indian currency when you open this account. Note that the rupee account balances are subject to currency exchange risks.
Free from taxes
Taxation rules do not apply to the NRE Account. You are exempt from wealth tax, gift tax, and income tax.
How to choose?
To choose the NRI account, select a bank that offers service in the country of your residence. It can help when you need urgent customer support. It should also provide minimum account balance requirements and attractive interest rates on deposits in the account. You get an international Debit Card for withdrawals. Learn about the charges and costs attached.
Opt for a bank offering ease of operations, such as simple documentation, a robust ATM network in your country of residence, customer-friendly mobile and net banking facilities, and an affordable money transfer solution.
Documents required
When you open an NRE Account, submit a valid passport, PAN Card or Form 60, proof of NRI status like a work permit, visa, and valid Overseas Resident Card. Besides, give some of your recent passport-size photographs, initial payment cheque, and address proof. Attest them by the judge, the Indian embassy where you reside, or any similar authorised personnel.
Points to note
NRE Accounts are prone to exchange risk fluctuations. Suppose you deposit your money in US Dollars on June 1 and withdraw the money in INR on June 30. In that case, there are chances you might be withdrawing either more or less than the actual value of the initial deposit because NRE Accounts do not offer any protection against currency fluctuations.
