The NRI banking system is one of the biggest features of the Indian banking system. Through this system, any NRI, whether residing or travelling, can access his funds through these special NRI Accounts. However, these accounts have different features and benefits, which will provide you with investments. With the right strategy, you can earn high returns. So how do make the full potential of these accounts? We tell you how.
Choose the Currency.
Different accounts have different features and benefits. This also includes the different currencies when investing. With the NRI accounts you have the choice of investing in a foreign or local currency. NRO and NRE accounts offer an excellent opportunity to invest with the local currency only. RFC and FCNR accounts are the best choice for foreign currency. This also includes the FCNR fixed deposit account, which is best for investing in a termed deposit, especially with foreign currency. You can either choose each account depending on the type of currency you want investing in, or you can open both account too.. For example, You can invest your local income in rupees in India through a NRO account. However, you can also remit your international income through another NRE account.
Saving Versus Repatriation
Surely at times you would want to repatriate from account in India to your international account. But it will involve spending a certain percentage of your funds. However, you can save more before your repatriate. Take for example; the NRE account is freely repatriable. The NRO account on the other hand has several restrictions. With his account, you can only repatriate an amount of only 1 million USD in a financial year. However, this account makes an excellent saving, especially since you can invest your home earnings with this account. In addition to this, even the joint account holders can have the power to utilize the funds from this account. With the NRO account, a NRI or individuals from back home can be joint account holders. However, with the NRE account, only an NRI can be account holder.
Taxation
Certain NRI accounts are taxable while others are not. The NRE account is not taxable. Even the FCNR term deposit is not taxable. However, the interest earned on the NRO account is taxable. So if you wish to avoid any possible income tax in India, the NRE account makes an excellent choice. You can transfer funds from the NRO account to the NRE account and save on taxation in such a manner.
You can harness the power of these accounts by using them to invest in other money market instruments too.
Choose the Currency.
Different accounts have different features and benefits. This also includes the different currencies when investing. With the NRI accounts you have the choice of investing in a foreign or local currency. NRO and NRE accounts offer an excellent opportunity to invest with the local currency only. RFC and FCNR accounts are the best choice for foreign currency. This also includes the FCNR fixed deposit account, which is best for investing in a termed deposit, especially with foreign currency. You can either choose each account depending on the type of currency you want investing in, or you can open both account too.. For example, You can invest your local income in rupees in India through a NRO account. However, you can also remit your international income through another NRE account.
Saving Versus Repatriation
Surely at times you would want to repatriate from account in India to your international account. But it will involve spending a certain percentage of your funds. However, you can save more before your repatriate. Take for example; the NRE account is freely repatriable. The NRO account on the other hand has several restrictions. With his account, you can only repatriate an amount of only 1 million USD in a financial year. However, this account makes an excellent saving, especially since you can invest your home earnings with this account. In addition to this, even the joint account holders can have the power to utilize the funds from this account. With the NRO account, a NRI or individuals from back home can be joint account holders. However, with the NRE account, only an NRI can be account holder.
Taxation
Certain NRI accounts are taxable while others are not. The NRE account is not taxable. Even the FCNR term deposit is not taxable. However, the interest earned on the NRO account is taxable. So if you wish to avoid any possible income tax in India, the NRE account makes an excellent choice. You can transfer funds from the NRO account to the NRE account and save on taxation in such a manner.
You can harness the power of these accounts by using them to invest in other money market instruments too.