Finance

Guidelines to investing in NRI accounts

The full form of NRI is Non-Resident Indian, that is, a person who has Indian citizenship but lives overseas. All banks have certain benefits and features that aid NRIs in maintaining various types of accounts in the country, so that they can control their funds effectively. But there are certain rules and conditions when opening NRI accounts in the country.

Essentially an NRI can hold 3 types of accounts with Indian banks. They are-

1. Non-Resident (External) Rupee (NRE) Account
2. Foreign Currency (Non-resident) Bank Scheme (FCNR (B) Account)
3. Non-Resident Ordinary Rupee (NRO) Account

Here are a few facts that you should know when opting for the above mentioned NRI accounts-

• Eligibility to open NRI accounts
In case of NRE and FCNR (B) accounts, a NRI or PIO (person of Indian origin) is allowed to open such accounts. Pakistani and Bangladeshi residents have to first get approval from the Reserve bank of India (RBI) before they are allowed to open such accounts.
In case of NRO accounts, Pakistani and Bangladeshi residents have to first get approval from the Reserve bank of India (RBI) before they are allowed to open such accounts. While NRIs dealing in bonafide Rupee transactions can open this type of an account.

• Eligibility to hold joint NRI accounts
All the three accounts can be held jointly by 2 or more PIOs or NRIs. An NRI can also hold a joint account with a relative who is a resident in India.

• Currency that can be deposited
In case of NRE and NRO accounts, deposits can be made in Indian Rupees only. In case of a FCNR (B) account, any type of foreign currency that can be easily converted is allowed.

• Various types of accounts that one can hold
In case of NRE and NRO accounts, you are allowed to open a savings account, current account, fixed deposit account and even a recurring deposit account. In case of a FCNR (B) account, you can only hold a term deposit account.

• Term for Fixed deposits
When it comes to a NRE account, one can maintain a fixed deposit account for a period of 1-3 years. The bank may allow a fixed deposit for more than 3 years depending on the asset-liability of the customer.
In case of a FCNR (B) account the period of a fixed deposit is always more than a year but should not exceed above 5 years.

A NRO fixed deposit account can hold any term depending on the resident account.

These are the few basic guidelines when it comes to holding NRI accounts, for more details one should consult the bank he wants to open an account in.

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