Simple Steps to Open an NRE Account to Send Money to India

If you are transferring money to India, you can do so in your NRE account. Under the FEMA (Foreign Exchange Management Act) of 1999, NRIs and POIs can maintain three type of accounts in India- NRO (Non-Resident Ordinary), NRE (Non-Resident External) and FCNR (Foreign Currency Non Resident (Bank) Account).

NRIs can deposit money in foreign currency in their NRE account held with any of the reputed banks in India. The best way of depositing money in the account is to send money to India using remittance services. There are no restrictions on which service you can use for remitting money to India.

You can transfer money to NRE account through wire transfer if your foreign bank allows remittance to the NRE account. Money can also be deposited in this account on your behalf by an NRI who is travelling to India. This will require the NRI to visit the bank and deposit the foreign currency. Money can be deposited in NRE or NRO account by a foreign currency cheque as well. The money can be drawn on the foreign currency account. However, this process is slow and takes time for the money to get credited in the NRE account.

On your visit to India, you can tender traveler’s cheque for depositing money in the account. Funds can also be transferred from one NRE or FCNR account to another NRE account in India. No matter which mode you choose, you need to remember that money can only be deposited in foreign currency. It is not possible to deposit Indian currency in NRE account. Also, transferring Indian currency from the NRO account to any other resident savings account in India is also not possible.

What is an NRE Account?

NRE is basically a savings account that NRIs can hold in India. It allows them to repatriate funds coming from outside earnings and transferrin the earnings to India in a secure manner. Once the foreign currency is deposited in the NRE account, it gets converted to INR (Indian Currency). With the help of this account, it becomes easy for NRIs to hold and maintain foreign currency in INR. If you are an NRI opening this account, you will be able to repatriate the funds along with the interest earned on the amount at any point of time. You won’t have to pay taxes on the interest you earn.

Features of NRE Account

As mentioned above, you can repatriate money freely which means, you can send money out of the country anytime without facing any upper limit on it. Compared to the NRO account, NRE accounts are different. The interest you earn on the money in NRE account is free from taxation.

If you have to remit money back home for a medical emergency or any other purpose, you need to make sure that you are getting the best exchange rates to India. Also, choose a reliable mode of remittance if you want to send money safely and quickly.