All NRIs who wish to remit money to India or manage their income in India must have an NRI bank account to manage their funds. Read on to know how you can open an NRI account.
As per the Reserve Bank of India mandate, Non-resident Indians or NRIs can open and operate Non-Resident External or Non-Resident Ordinary accounts with any Indian banks to manage their earnings in India and overseas. However, most NRIs find it difficult to personally visit the bank brand to complete the account opening formalities and opt for opening an account online from the convenience of their home.
But, before you proceed to know the account opening process, let us first understand more about the type of NRI account you can operate.
NRO Account
If you live overseas but have business operations or have an income source in India, you can opt for opening an NRO account. It allows you to deposit the earnings in India and maintain the funds in INR. The earnings can be from property rent, returns on investments, profits earned from the business, etc.
You can open an NRO account as a savings account, current account, or term deposits (recurring deposit and fixed deposit) to suit your specific needs. One of the important factors that distinguish it from the NRE account is that the interest earned is taxable in India.
NRE Account
If you are employed overseas and wish to remit the earnings to India so that your family can use the funds, an NRE account is an ideal choice. It allows you to depot the foreign earnings in INR. Therefore, it is exposed to exchange rate fluctuation risk. So, when you deposit funds in the account, be aware of the exchange rate so that you get the best value.
You can open this account as a savings account, current account, recurring deposit, or fixed deposit. One of the significant features of the NRE savings account is that the interest earned on your deposits is completely tax-free in India.
How to open an NRI account?
The first step in opening an NRI account is to do your research well about the different banks. You must review the account opening process, the minimum balance requirement, the interest rate offered, the nature of the services provided, etc. Ensure that you choose the right bank that offers you the best services to suit your specific needs.
Next, visit the bank’s website and click on the ‘open an NRI account’ section and download the application form. Fill the form with the necessary details to start the account opening process.
Once you fill the form and sign it, the next step is to provide the necessary documents. Most bankers require the NRI account applicants to submit documents like identity proof, proof of NRI or PIO status, copies of passport with a valid visa, residence proof in India and overseas, etc. Besides, you must also deposit the initial account opening fee.
Many banks require the supporting documents to be attested by the Indian consulate or the overseas bank or notarised in the country of your current residence. Alternatively, some banks allow you to validate the authenticity of the documents through self-attestation.
Some banks may require you to fill up an additional KYC form and furnish details related to tax residency status and other information, as per the CRS and FATCA rules.
Once you have the full documents read and filled the application form, you can dispatch the same to the bank branch or submit the same at the PO box services (available in certain countries). You can also submit the scanned copies of the documents online to the registered bank’s e-mail ID or through their website.
Make sure that you review your application form carefully before submitting it. Also, generally, banks have a helpline number or customer care service. You can reach out to them at any time if you have any doubts regarding the application process. It is better to seek help and do the right things rather than committing a mistake and risk delay in the account opening process.
