Important Reasons to Open an NRO Savings Account |
Posted: April 1, 2022 |
Thousands of Indians move out of the country every, seeking a better lifestyle or pursuing higher education. Most of them still have some way of income back in India that they need to manage. As an NRI, you might assume that your Indian savings account will suffice for this purpose. However, as per the Foreign Exchange Management Act (FEMA) guidelines, an NRI cannot have a resident savings account in their name in India. Instead, the RBI mandates that you convert your resident account into an NRO (Non-Resident Ordinary) bank account. With this account, you can effortlessly hold and manage your earnings back in India and even earn attractive returns on your idle funds. Not only that, but these accounts also allow you to invest in Indian securities. In a nutshell, whatever your financial needs are back home, opening an NRO account is the first step in the right direction. Let us explore some other reasons why having an NRO savings account is a must.
As an NRI, you might have income sources in India, such as rental income, pension, and dividends. You can deposit these funds into your NRO account and use them to manage your expenses in INR. Moreover, you can also appoint a close family member as a mandate holder to operate your account in India on your behalf.
NRO savings accounts are interest-bearing accounts, which means you can earn regular returns on your deposited funds. However, TDS is applicable as per your tax bracket.
You can open an NRO account jointly with a resident family member or another NRI.
An NRO savings account allows the smooth transfer of funds within India or your international bank account. MoreoverHowever, you can only repatriate funds up to $1 million per financial year from your NRO account.
You can declare any NRI, PIO, or resident as your nominee. You can also add a minor as your nominee, but they will have to be represented by their guardian.
When it comes to NRO vs. savings accounts, there are certain restrictions on NRO accounts. However, they offer you the same add-on services. For instance, you can use online banking facilities from anywhere in the world and withdraw funds via debit cards. The Debit Card is for use in India only. How to Open Your NRO Savings Account Online You can open NRO savings account online in a few simple steps. Visit your bank's website or net banking portal for details. Most banks require you to submit the following documents:
How to Convert Your Resident Account to NRO A resident savings account and an NRO account both allow deposits in INR. Therefore, you can easily convert your resident account into an NRO account. Here are the steps:
After your resident account is converted:
In Conclusion Not only does your NRO account help you safeguard your earnings in India, but it also gives you a host of benefits. If you are an NRI or soon-to-be one, apply for an NRO account. You can open it with your current bank or a new one. So, research and compare NRO accounts and their features among various banks before you proceed.
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