With an increase in the number of Indians settling abroad, banks today offer various new-age, value-added features in addition to the basic banking services for Indians overseas through their NRI accounts. However, before opening an NRI account, you should know what NRI banking is and the three categories of NRI bank accounts. Read the article till the end to understand everything about the basics and the value-adds in NRI banking including the importance of mobile banking to access your NRI Accounts through the example of IDFC FIRST Bank – undoubtedly one of the best modern retail banks in India.
Who is an NRI?
The term NRI is an abbreviation for “Non-Resident Indian.” Any Indian citizen who has lived in a foreign country for more than a hundred and eighty-three days in a financial year due to employment or business-related purposes qualifies as an NRI. NRIs living abroad cannot use the savings account used by Indian citizens. Therefore, a distinct branch of banking called NRI Banking caters to the banking needs of NRIs.
What is NRI banking and what are its types?
Any scheduled bank’s NRI Banking division offers three categories of bank accounts – NRE Accounts, NRO Accounts, and FCNR accounts. Let us briefly understand these three categories in this section.
NRIs use Non-Resident Ordinary (NRO) Accounts to manage their income streams originating in India. Banks facilitate fund transfers between two NRO Accounts, and the Government of India taxes the interest earned via an NRO Account. Banks facilitate fund transfers between two NRO Accounts, and the Government of India taxes the interest earned via an NRO Account. Here are some important features of these accounts:
- Only NRIs can open NRO Accounts.
- NRIs can convert their regular savings accounts into NRO Accounts.
- NRO Accounts can only contain funds received from within India.
- Customers can maintain savings in INR (Indian Rupees) in an NRO account.
Non-Resident External (NRE) Accounts are meant for income streams originating from outside India. NRIs who wish to store their foreign currency savings in the Indian denomination (INR) must open an NRE Account. Two NRIs can come together to open a joint NRE Account. Here are the important features of NRE Accounts:
- NRE Accounts can only be opened by NRIs.
- You can transfer funds from an NRE Account to an NRO Account.
- Customers can store funds originating in a foreign currency in INR using an NRE Account.
- NRIs can repatriate their funds using an NRE Account.
FCNR Accounts help NRIs deposit their salaries in a foreign currency in an Indian account. These accounts are not taxable in India, but they require customers to follow rules while depositing money in their accounts. Customers can deposit income in any of the following denominations in an FCNR Account:
- USD
- GBP
- AUD
- SGD
- CAD
- CHF
- HKD
- EUR
- JPY
You should choose an NRI Account depending on the currency in which you intend to deposit money and the currency in which you wish to withdraw it. If you are an NRI and wish to open a joint account with another NRI, you can do so with a few NRI accounts. However, while opening an account, you must also research the bank in question and assess its mobile banking services. IDFC FIRST Bank offers uninterrupted and seamless access to NRI Accounts through its mobile banking app including features like AutoPay and One-Swipe Pay that help customers securely transfer funds online.
