NRIs and foreign nationals (non Indian citizens) are leveraged with various types of banks accounts available in India, leaving them with many options to choose according to their customized needs. However we will discuss the three major types which are widely in demand and are offered by almost all the banks in India. Three types of bank accounts for NRIs include:
- NRE Savings/Fixed Deposit Account
- NRO Savings Fixed Deposit Account
- FCNR Fixed Deposit Account
NRE Savings/Fixed Deposit Account
The Non Resident External (NRE) Savings Account allows you to transfer foreign earnings easily to India. Important points about the NRE account are as follows:
- The account operates both as Savings and Fixed deposit accounts.
- No tax is levied on the interest earned from these accounts.
- No wealth tax is levied on this account.
- The currency in the account should be in Indian Rupee.
- With this account you can open joint account with any NRI but not with any Indian resident.
- Money transfer to India becomes easy with NRE account
- Approvals for opening NRE account is not required, if the funds for this account are transferred in freely convertible foreign currency.
- Nomination is possible in NRE Accounts.
- The NRE account is exempted from taxes but only in case an individual holds the account and is not maintained by any Overseas Company Bodies.
NRO Savings Fixed Deposit Account
This type of bank account is in the form of current, savings, recurring or fixed deposit account. Every NRI can open a NRO account. Here are some of the features:
- NRO account can be opened as both Savings and Fixed Deposit account.
- Currency maintained in this account is in Indian Rupee.
- Joint account can be opened with any Indian resident.
- Approvals for opening NRE account are not required.
- The account is not completely exempted from taxes. Interest earned in this account is 30% taxable and surcharge and education cess will be included.
- Nomination is possible in NRO Accounts.
- Can deposit Indian Currency in to this account.
FCNR Fixed Deposit Account
This type of bank account is only maintained in term deposits. The account can be maintained only in Pound Sterling, US dollar, Deutsche Mark and Japanese Yen. The following are the key points for Foreign Currency Non-Resident (FCNR) Fixed Deposit bank account:
- The entire deposit (principal and interest) is exempted from tax
- Joint account can be opened with any other NRI.
- Get an overdraft on your Savings / Current account against your FCNR Fixed Deposit
- Nomination Facility is allowed
- Joint accounts cannot be opened with Indian Residents.
- Following currencies are allowed in this account:
- US Dollars
- Pounds Sterling
- Japanese Yen
- Australian Dollars
- Canadian Dollars
- One cannot deposit Indian Currency in this account.
- Minimum 1 year and maximum 5 years is allowed.