As an NRI, you will have a benefit of applying for any of the NRI accounts, namely the NRO or NRE account. But while the NRO account has been a popular choice for investments with the income originating from India, the NRE accounts offers plenty of other benefits, which has been mentioned below:
Tax benefits: This is one of the most important and beneficial factors that you need to consider before investing in this account. The interest that you will earn with this saving account, as well as the fixed deposit, will be tax-free in India. Even if you do have any income originating from India, it is not counted. By this alone, the account is one of the most secure and high yielding investment options available to NRI’s.
Repatriation benefits: Apart from the tax benefits, the account also has repatriation benefits. With the savings account, funds can be easily moved from account to another, since the interest and the principal amount can be repatriated easily, and freely.
The requirement of low balance: Due to the rising competition, plenty of banks and financial institutes are dropping the requirement for the minimum account balance. A minimum balance of Rs 10,000 is normally used as a minimum balance in the recent months. This is a relatively low amount for most earning NRI’s.
High-interest rate: Both the saving account and the fixed deposit NRE accounts offer a high-interest rate. Although it may differ from bank to financial institute, you can expect an interest between the ranges of 4 to 6%. The interest I calculated on the daily closing balance. Furthermore, the interest is paid half – yearly, which is normally June and December.
Convenience benefits: Apart from its other benefits, it the NRE account also offers convenience. You can easily open this account at your local bank or even online. All you need to do is fill up a form online, make a copy and attach the required self-attested document copies. You can even take advantage of the Free PO Box Service to send your documents depending on the country you are residing in.
Joint holding: Joint account holders offer plenty of benefits, which is no different for the NRE accounts. Having a joint will offer one of the best ways to manage your investments and earn more along with another account holder.
Mandatory holder benefits: As per the features offered by the NRE account, you can appoint another individual to operate your account on your behalf. Through this mandate, you give an individual of your choice the authority to operate your bank account on your behalf.
Global Advantage: Plenty of Indian banks are now offering NRI’s a variety of global offerings. By opening an NRE account, you can get to handpick exclusive offering catering to your needs both in your residential country as well as in India.