According to the Foreign exchange management act or the FEMA it is illegal for NRI’s to have any resident savings bank account in India. As an NRI you will require changing your resident savings bank account into an NRI account and you have two choices in that, it can either bean NRO or an NRE account. If in case you carry on using your resident account, you will be penalised heavily. You can either convergent your existing account or close your existing account and open a new NRO or NRE account.
NRE or NRO is a savings bank account for the Non-resident Indians These two accounts can be opened by any NRI. MRE stands for Non-resident Indians there are many differences between them and depending on their features you can choose to open whichever account that suits you.
The NRE account lets you keep money in Indian rupees. This account then further lets you open one of the best-fixed deposits investment option known as the NRE fixed deposit which currently provides a fixed and interest rates and very good returns on NRE fixed deposits.
Since many NRI’s are not aware of these feature NRI account benefits and advantages, here are few of the benefits shared below:
1.Tax benefits: One of the major NRI account benefits is that the interest earned on the NRE savings account and the NRE fixed deposit is tax-free in India. They aren’t counted in the taxable income bracket and this is even when you have many sources of income in India. Due to this feature the NRE fixed deposits are the most secure and high yield investment options that are available for the NRI’s
2.Low balance required – Due to the increased competition amongst the private and the public sector banks, the minimum balance required in order to keep the NRE account functional has dropped hugely. Nowadays many banks require just Rs 10,000 as a minimum balance to keep the accounts functional.
3.High-interest rate – Another significant benefit of an NRI bank account is the NRE fixed deposits offers high-interest rates even though the rates differ from one bank to another. The good part is that these interest rates are calculated on the daily closing balance and the interest is paid half-yearly in June and December and this too varies from one bank to another.
4.Joint Holding – Another key NRI account benefit is that you can jointly open it with another NRI. This might also turn out to be the way to manage funds because your partner can operate along with you.
These are some of the NRI account benefits.