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Click here Non Resident Indians have different banking needs as compared to Indian residents. They may be based abroad but may have dependants and sources of income in India which is why they need to continue maintaining their savings accounts in India. However, they need to convert their Indian accounts into NRI accounts to be eligible for NRI banking services. If you’re assuming NRI status, this article on FAQs about NRI accounts could be beneficial for you.
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Click here According to FEMA guidelines, NRIs or Non Resident Indians are those individuals who live in a foreign country for more than 183 days in a calendar year. They earn their living in foreign currencies, which are deposited in their overseas savings accounts. However, those NRIs, who have sources of Income in India, need a Non Resident Ordinary account as well. This way, even if you are based abroad, you can keep a tab on your finances in India. Here’s why you need an NRO account on moving abroad.
Final word: You need to understand NRO account meaning and its benefits before you open your account. Visit your bank or research on the internet before opening your account to gain maximum benefits. to edit. Many novice and seasoned investors rely on mutual fund to generate an additional source of income and create a corpus in the long term. This is one of those rare market investment instruments that suit both, conservative investors with low risk appetites and investors who are not afraid of taking risks. One of the most popular types of mutual fund investments is an equity mutual fund. Here is a detailed guide on this type of mutual fund.
Equity based fund – meaning and definition Equity fund is a type of mutual fund which aims to generate high returns on investment. The fund manager of an equity-based fund typically invests in shares of different companies of varied market capitalisation. These funds have the potential to produce higher returns than traditional investment instruments; fixed deposits for instance. They can even provide better returns when compared to debt funds, which is another type of mutual fund, ideal for conservative investors. The returns earned from debt-based fund investments largely depend upon the performance of the company offering the fund. The working of equity-based funds Equity linked mutual funds essentially invest a minimum of 60% of assets in equity shares of various companies, in different proportions. This should be as per the investment mandate. The fund manager may invest in purely small-cap, mid-cap or large cap funds or even chose a mixture of different funds to maximise market capitalisation. Also, the investment style of the fund manager could be either growth-oriented or value-oriented. Allocation of funds Once the fund manager allocates a significant portion of the equity oriented funds, the remaining amount is used to invest in debt funds and other money market instruments as a portfolio diversification technique. This is done in order to be able to both, honour sudden redemption requests from investors and to mitigate the risks associated with equity investments to a certain extent. Purchase and sales decisions are made by the fund manager in order to make the most of changing market movements as well as to reap maximum, high returns. Types of equity funds Equity funds are broadly classified in two categories Funds based on themes and sectors: These are equity-based funds focusing investments on specific themes and sectors. While thematic funds typically follow a specific theme or subject (for example international stocks or emerging companies), sector funds basically invest in specific industries like Pharma, Technology, FMCG etc. These equity-based funds are comparatively risky because the fund manager has to account for both, market risks as well as sectoral performance. That said, you can easily diversify your investment and maximise market capitalisation by investing in these funds. Funds based on market capitalisation: Equity savings schemes that invest in funds based on market capitalisation are divided into five categories i.e. large cap, mid-cap, mid and small cap, small cap and multi cap funds. Companies that are well-established and have the ability to provide stable returns on investments are regarded as large cap funds. Mid-sized and mid and small sized funds invest in medium and small sized companies. Small cap funds typically deliver fluctuating returns since small-sized companies are more prone to volatility. A fund that invests across various markets i.e. large, mid and small-cap stocks is referred to a multi-cap fund. Final word: Investing in equity mutual fund may not be ideal for every investor, but it is not without its benefits. These funds are manged by experts, come with low investment costs and are highly liquid. You can invest in these funds conveniently and even diversify your investment portfolio. Moving abroad can be both exciting and challenging. It can change your life for the better but there are a lot of hiccups you have to face in the early transitioning phase. One of the most important things you need to consider is financial management. If you have family or income sources in India or if you wish to return to India in future, you need to consider opening the right NRI banking account. When you open the account, you are required to submit several documents with it. Here are the basic documents you need to submit with your NRI bank account.
Documents required for opening an NRI account As an NRI, you can choose between two types of accounts i.e. the Non-Resident External Rupee (NRE) account for foreign currency deposits (converted at applicable rates into INR) and the Non-Resident Ordinary Rupee (NRO) account for INR deposits to manage investments and income sources in India. Irrespective of which account you open, you need to attach the below mentioned documents to avail NRI banking services.
Things to remember While these are the basic documents required for opening an account for availing NRI banking services, they may not be the only documents required by banks. Here are some important things to remember.
When you move abroad, you need to convert you Indian savings account into an NRI bank account. Typically, you can open two types of accounts – Non Resident Rupee External (NRE) account and/or Non-Resident Rupee Ordinary (NRO) account, based on your needs and requirements. The latter type of account is ideal for people who wish to park their foreign currency savings in an Indian bank account. Here are some of the main features of an NRE account.
Complete repatriability: The most prominent feature of an NRE account is that they are freely and fully repatariable. Foreign currencies are converted into INR, and you can easily withdraw sums in INR from this account when you visit India. Both, the actual savings parked and the interest earned on the savings is completely repatriable. Conversion in INR: Whether you open NRE account online or offline, you need to remember that an NRE bank account is essentially a Rupee account. As such, it does not matter what foreign currency you are parking in this account, it will automatically be converted to INR. The bank applies the current market rate of the foreign currency when you deposit any sums in this account. Deposit and withdrawal: The foreign currency you park in your NRE savings account should be in accordance with those authorised by the RBI. Some banks allow you to deposit only a few, specific and major foreign currencies such as USD, GBP, EUR, JPY, AUD, CAD and NZD. Also, you can easily withdraw funds from this account while you are in India and abroad. Funds can be withdrawn in the specific foreign currency when you are abroad, for instance GBP if you are in England an INR when you are India. Loan applications: Another important feature of NRE bank accounts is that you can apply for different kinds of loans through this account. Loans can be availed for investments or personal use in the country you are living in. You can conveniently avail high value loans such as home loans or car loans for purchasing homes or cars in the country you are residing in, which is one of the greatest NRE account benefits. However, you need to fulfil some basic requirements like eligibility, income and employment to avail these loans. Taxation laws: Since NRE bank accounts are foreign currency accounts; you can receive tax exemptions on funds parked and interest earned on those savings. You do not have to pay any taxes on fund parked in this type of NRI savings account. As such, you can avoid double taxation, since you would already be paying taxes on the income earned and savings made in the foreign country you are residing in. Internet banking facilities: You also get internet banking facilities with your NRE account. You can utilise this facility to transfer funds to India or between different accounts in the country you are living in. You can also download your bank’s mobile banking application to transfer funds. Moreover, you can make online purchases, pay your bills, and apply for loans and overdraft facilities through your internet banking account. Final word: Most banks today allow you to open NRE account online, directly through the website of your preferred bank, even after you’ve moved abroad. Alternatively, you can also visit your nearest bank branch in India and open this account. However you need to provide all the necessary documents as mentioned in the online account opening form. Your chosen bank will review your documents and open the account, after which you will receive your cheque book and ATM-cum-debit card via post. Any individual who lives out of India for a period exceeding 6 months, 183 days to be precise, within a calendar year, is regarded as an NRI. Such individuals need to reach out to their banks and inform them about their change in status from resident Indian to Non-Resident. You should seek NRI status either if you are moving abroad for this period exceeding 6 months or if you intend to migrate to a foreign country for the long term. You must then convert your regular savings account into an NRE savings account. Here is a detailed guide on NRE accounts.
Final word: Managing your NRE saving account is rather easy. You can easily deposit sums into this account through online transfers and also repatriate sums freely while living abroad. Such accounts have the potential to promote a lot of savings and can help you build a huge corpus in the long run. With the rise in usage of internet and mobile applications for financial transactions, digital banking frauds have gone up. As our country moves towards the digital and paperless economy, a lot of us are seeking online services each day. But with the ease and accessibility of doing online transactions comes a lot of unwanted threats that can pose a significant risk to your confidential financial information.
The most efficient way to ensure that you do not fall victim to any digital scams is to educate yourself. So, without further delay, let’s have a look at the three most popular digital frauds doing the rounds in India – Fake mobile banking apps Mobile apps offer us convenience, but that can cause significant threat to your money. Today, many fake mobile apps of leading banks like HDFC, ICICI, Axis etc. are available in the app market with the same logo of the respective banks that can make it tricky for you to distinguish between the original and fake apps. Once these fake apps are downloaded, the virus can steal your account and card details and take your money. Therefore, make sure your confidential details do not get misused. It is prudent to install antivirus software that can protect your phone from any virus and internet threats. Also, only use secure apps downloaded from verified sources, like Digibank by DBS India. SIM swapping One of the scams done in digital banking is of SIM swapping. The fraudsters use this method to get your confidential details, banking information through malware, phishing etc. Once they can access your details, they block your original SIM and make a duplicate one using a fake ID proof. Thereafter, they receive a one-time password (OTP) on the duplicate SIM to carry out financial transactions. If you want to avoid falling in this trap, ensure to register for both email and SMS alerts that can help you monitor various activities of your bank account. It ensures that even if you do not get an SMS notification, the bank will send you an emailer for all your financial transactions. Also, carefully check your bank statements and transaction history to recognise any irregularities quickly. Stealing OTP From paying bills online to shopping to ordering food, OTPs are a popular way to carry out financial transactions. However, it is not safe from any threats. On the pretext of updating bank details, fraudsters pretend to be bank staff and con people into revealing their CVVs and card numbers. OTP theft usually occurs if a virus contaminates your phone or you are tricked into disclosing your OTP by a fraudster. People who are new to digital banking are more vulnerable to such scams. How to protect yourself? First, never disclose the personal and important details of your bank to anyone including bank officials. Remember, as a rule, a bank does not ask you to give out your card details for verification on the phone. Second, never click any questionable links received from numbers unknown to you. On clicking such links, you are giving access to frauds to your confidential details, making it easy for them to get your OTPs. For availing the digital banking services on the go, make sure to download the latest version of the mobile banking apps. While net banking can be a boon to many, it might be a little overwhelming for users who are not tech-savvy. Other downsides make users apprehensive about online banking. Some of these are listed below:
Security One of the major fears that customers face is security, and this is one of the primary reasons that they avoid using internet banking. The cases of cyber-crimes and hacking are increasing every day. The most evident risk to online banking is breach of security. With the banking sector continually evolving, hacking has not stopped. Most banks in India have initiated anti-phishing procedures to protect their customers and systems from getting hacked. However, loss of data and identity theft instances keep many users away from the same. Operation Issues Most customers are concerned about online fraud and cybercrimes. However, at times due to technical hiccups, money does not get transferred in an online transaction. On the other hand, even if the transaction gets processed, customers are not updated about the transaction status. These occurrences make customers uneasy. Customer Service Support Since customers are not physically present in banks in net banking, there is a shortfall in the relationship between them and the bank. It could have adverse effects. Many customers, especially senior citizens, still prefer having human customer support than having virtual assistants. They do not prefer explaining a problem to a chatbot. Limited Services. Net banking apps are suitable for services like making fund transfers, payment of bills and to check balances. However, there is a limitation to the kinds of services that are accessible in case of net banking. A customer can initiate an application to open a new account or apply for a loan, but they must visit the bank branch to submit identity documents and sign forms. Also, to withdraw cash, the customer must visit the bank or a nearby ATM. Complex Transactions Net banking works well when transactions are simple and do not require any face to face discussions. However, there are few complex transactions which would need the bank manager to be involved. Sorting out the concerns require customers to visit the bank. Online communication may not sort it out. Services such as notarisation or obtaining bank signature guarantees require a visit to the bank. Both traditional and online banking have their pros and cons. While both have their own threats, the banking sector is always trying to bring them down. It is great to maintain both traditional and net banking practices as per the convenience. The best thing is to take adequate precaution by avoiding falling for unethical activities on the internet. Most of the investors today prefer mutual funds investment owing to the high returns and diversified portfolio it offers. However, you must remember no single scheme or set of schemes are suitable for everyone. An appropriate mutual fund is one that syncs with your investment objective and risk appetite.
Selecting a mutual fund scheme is a two-step process – choosing the category and opting for a scheme from that category. But before that, it is necessary to clear some queries concerning the investments. Let us bust those:
You can be a successful investor if you unfollow these myths. So, go ahead and invest either in online mutual funds or offline too. You could also invest in mutual funds through net banking apps. Banks offer different kinds of savings accounts for different customers. One type of savings account that they offer is called a pension savings account. This account is unique for pensioners to receive credits for their pensions.
This account can be opened by:
The pensioner needs to submit the pension order and the bank will automatically collect the due pension. The pensioner will need to submit the bank account details to the employer so that it can be added to the pension payment order. This PPO once filled will have to be submitted to the bank following which the pension will be collected. However, this account can’t be opened at any time. It has to be opened in the individual’s name after retirement or 6 months before retirement. How to open a pension savings account? The whole procedure to open a pension account has gone online which means it is possible to go on the bank’s website and fill up an account opening form. The online bank account opening with zero balance procedure is streamlined and once you fill up a form, the bank’s customer care executive will contact you to get your documents collected. It is very easy to open zero balance account offline as well. You will need to go to the bank branch and fill up an account opening form and provide the required documentation. Once this application is processed, the bank account will be opened. Documents required for a pension saving account
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October 2020
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