What are the benefits of an NRI savings bank account?

Author: Ompal Rao

When a Non-Resident Indian (NRI), Overseas Citizen of India (OCI), or a Person of Indian Origin (PIO) opens a bank account with a bank or a financial institution authorised by the Reserve Bank of India (RBI), the bank account is referred to as an NRI account. An NRI account differs from a regular savings account in many ways, and it caters only to people who fall under a certain category.

What are the types of NRI accounts, and what are their benefits?

Banks primarily offer three major types of NRI accounts – NRO, NRE, and FCNR(B) accounts. Two factors play a crucial role in helping you decide the type of NRI account you might want to pick – the origin of your earnings and the denomination in which you want to save your money. Keep reading to learn more about India's three types of NRI accounts.

1. NRO accounts

An NRO or Non-Resident Ordinary account can hold money earned in India in an Indian denomination. If you wish to open an NRI bank account to save money that has its source in India, you can opt for an NRO account. NRO accounts help you efficiently manage your Indian income from abroad. Here is a list of benefits of opting for an NRO account with IDFC FIRST Bank:

  • 100% liquidity with high returns and remote processing for all banking transactions.
  • The IDFC FIRST Bank
NRO Savings Account can be opened completely online.

  • The interest is calculated on daily balances and paid at the end of every month.
  • Mandate facility for your loved ones in India.

2. NRE accounts

NRIs can use NRE accounts to save their earnings from their country of residence. However, these earnings must be saved in the NRE accounts in an Indian denomination. Here are the advantages of opting for an IDFC FIRST Bank NRE account:

  • Earn a tax exemption on your foreign income with the IDFC FIRST Bank NRE Savings Account.
  • The IDFC FIRST Bank NRE Savings Account can be opened completely online.
  • Funds are fully and freely repatriable.
  • A free, feature-rich Visa Signature Debit Card is available.

3. FCNR(B) accounts

By opting for an FCNR(B) or Foreign Currency Non-Residential Account, NRIs or Persons of Indian Origin can deposit their income in the currency of their country of residence in any foreign currency prescribed by the RBI. You can deposit your income in any one of the following currencies in an FCNR(B) account:

  • US Dollar (USD)
  • Canadian Dollar (CAD)
  • Australian Dollar (AUD)
  • Euro (EUR)
  • Great Britain Pound Sterling (GBP)
  • Singapore Dollar (SGD)
  • Hong Kong Dollar (HKD)
  • Japanese Yen (JPY)
  • Swiss Franc (CHF)

Open an FCNR (B) account with IDFC FIRST Bank today to avail of the following benefits:

  1. Invest your overseas earnings in an FCNR(B) account and benefit from tax-exempt interest rates.
  2. Benefit from better interest rates than your overseas bank.
  3. Be assured of the returns you make in a foreign currency to meet all your obligations.
  4. The tenure range available is from 1 year to 5 years.

Who is eligible to open an NRI Savings account?

The following individuals/set of individuals are eligible to open an NRI Savings account:

  • Individuals on official deputation abroad by the Government of India or any Public Sector Undertaking
  • Indian citizens residing abroad for business, studies, or employment
  • Individuals who hold an Indian passport
  • Individuals whose grandparents or parents were citizens of India as per the Indian Citizen Act of 1955
  • NRIs, PIOs, OCIs, and their spouses

What are the benefits of an NRI Savings Account?

  • Any NRI can benefit from higher interest rates offered by an NRI Savings Account.
  • An NRI Savings Account offers various tax benefits. The interest income on NRE and FCNR(B) accounts does not have any tax liability under the Income Tax Act of 1961.
  • The authorized bank can sanction loans to the NRI Savings Account holder against the security of the money held in an NRI account.
  • NRIs can also mitigate the risk of foreign currency rates fluctuating by opting for an NRI Savings Account.
  • An NRI Savings Account enables NRIs to invest in Indian investment securities.
  • As an NRI, you can continue to earn from your assets in India through an NRI Savings Account.
  • NRIs can send money to their families in India via Inward Remittance through an NRI Savings Account.