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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 Funds can be withdrawn in the specific foreign currency when you are abroad, for instance GBP if you are in England an INR when you are India.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.
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October 2020
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