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What is the purpose of opening an NRI bank account?

Date: 19 Jun 2016   Posted By: Syed Rizwan T     Group: Finance and Investments    Category: Banking   

I would like to know the purpose of opening an NRI bank account. I have heard people who live in abroad open this type of account but I am not sure what difference it makes from the regular bank account in home country. Why most people who live in abroad open this account? What special benefits they are getting for NRI bank account?
Experts: do respond.

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Author: Mahesh    20 Jun 2016      Member Level: Gold     Points : 2  (Rs 2)    Voting Score: 0

Normal bank accounts under which we save our money for personal savings or current accounts. These accounts are single currency accounts. Requires remittance permission every time you initiate any money from offshore or to the offshore place.

In case of NRI accounts, they are designed to keep such needs in mind. Here with such accounts you can handle multiple currencies. Remittance can be processed lot quickly. Also such accounts can send money to and from offshore very quickly. There are many other payment options and services available for NRI accounts. These accounts are responsible for bringing foreign currency into the country. So they are monitored by FEMA and also given preference over regular accounts in terms of remittance issues.

Those who live abroad benefit from having such accounts. The money can be easily transferred and converted into the local currency. Each bank offers remittance and overdraft related facilities to NRI users. So the features and benefits to the service vary depending on that.

Author: Kailash Kumar    20 Jun 2016      Member Level: Platinum     Points : 2  (Rs 2)    Voting Score: 0

NRI means non-resident Indians. The accounts opened by NRI's in India are called NRI accounts. There are more than one type of NRI accounts. The main types are NRE (Non-Resident External) and NRO (Non–Resident Ordinary) savings account. In addition there are fixed accounts designed for NRI's.
In NRE accounts, foreign currency is deposited by the account holder, but the amount is converted into Indian currency by the bank at the prevailing conversion rates and the account is maintained in Indian currency. Mandate card and cheque book facility may be given to a family member in India who can operate the account. In such cases the interest earned is not taxable in India.
In NRO accounts are opened by NRI's for depositing their income earned in India through rent, dividends, pension etc. An Indian resident can be added as a joint holder to operate the account.

Author: Venkiteswaran.    21 Jun 2016      Member Level: Diamond     Points : 4  (Rs 4)    Voting Score: 0

India citizen who reside outside India for more than six months for purpose of job or profession are termed Non-Resident Indians (NRI s). They earn money in the foreign nation in a currency different from that of India.
Once a person becomes an NRI, whatever assets has had in India and whatever assets he has acquired abroad and brought or sent to India are treated differently. The money an NRI earns in India is taxed as per the tax laws of this country. To remit it outside needs permissions or sanctions as per the rules and guidelines in force under money remittance outside this country. Hence it requires that the local accounts of an NRI is to be designated as Non-Resident Ordinary accounts.
However the money he earns outside can be remitted to India as per the laws in that country. In India that money receive tax exemptions subject to the rules and guidelines in force at that time. The money thus remitted by an NRI are eligible to be taken back by him or remitted outside this country easily. Hence that needs separate account and monitoring for easy transaction. Even after the NRI returns to India there are certain benefits to him for some period for the money balances thus brought. That is why a separate account called NRI account has to be opened and maintained by the Non-Resident Indian. As the country's foreign exchange reserves are an important thing to be monitored, it needs correct information of foreign exchange coming to India and going out of India. Separate NRI accounts help in this. NRI s can keep accounts in foreign currency in India. This can be done by converting the money in N R I accounts. Thus a separate account is essential for NRIs for their foreign money sent to India-i.e NRI accounts.

Author: Partha Kansabanik    21 Jun 2016      Member Level: Diamond     Points : 1  (Rs 1)    Voting Score: 0

NRI Accounts are meant for Non Resident Indians (NRIs). NRI Accounts are of two types, viz., NRO Accounts and NRE Accounts.

NRO Accounts are opened by NRIs for depositing their income earned in India through rent, dividends, etc. On the other hand, in NRE Accounts, foreign currency is deposited by the Account-holder, but the amount is converted to Indian currency by the Bank at the prevailing conversion rate.

Author: Tara    05 Jul 2016      Member Level: Silver     Points : 3  (Rs 3)    Voting Score: 0

Non resident Indians that is persons who are staying abroad or have gone on a job for a specific period or permanent citizens of that particular country in case want to open account in India they have to open NRI account which is similar to local account but differs from specific features.
For an NRI savings bank account, the remittance to the account should be in foreign currency transferred from that particular country and converted into local currency at the rate prevailed for that particular currency. The balance in the account will not carry any interest. Specific pass book pre-printed cheque books will be issued to that account. The balance in the account can be repatriated at any point of time.
For local transactions Non resident Ordinary accounts will be opened which is similar to local savings bank accounts and carry interest half yearly and which is taxable. This account can be used for any tax payments transfers, payment of premiums etc.
Non resident term deposits can be opened with amount transferred from NRE accounts but they will carry different rate of interests.

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