The NRI accounts have been designed to the specifications of the financial needs of an NRI. Each of the different types offers different advantages, especially when it comes to the NRO account. In order to maximize the outcome of your investment, you must first understand the features of the account.
Here are the top features of the NRO account you can use to your advantage:
* An NRO account can be considered as same as an ordinary bank account. It can be opened by an Indian who is about to travel abroad with the intention to become an NRI. Thus in this way, the individual can open this type of account just by sending remittances from his/ her own resident country.
* The NRO account is a rupee denominated account. In other words, funds that are invested in this account are maintained in Indian Rupees. It can be a savings, current or a term deposit account. As you will be investing foreign currency in this account, the conversion rate is normally high, in terms of Indian currency. You will need to consider the market rates before you make any withdrawals or investments. When making any termed deposits, the current market rates will be taken into account.
* When it comes to remitting funds from this account, one can easily remit the interest that is earned in this account. Therefore through this process, you invested funds still remain well protected, while allowing you the flexibility to use the return on interest. Additionally, one can only remit an amount of 1 million USD. It can be done only with the permission of the government of India. This ensures that your remittance is well protected as compared to the NRE account.
* The facility for nomination is allowed for the NRO account. In other words, this account can be held jointly with another NRI or with local resident. These joint account holders, have the mandate power, also known as the power of attorney. With this position, he can make local, rupee payments on behalf of the NRI.
* An NRO account can be held jointly with another NRI or with a resident Indian. A resident power of attorney holder cannot open an NRO account on behalf of an NRI. But the resident power of attorney holder can make local, rupee payments on behalf of the NRI.
* Another benefit of this account is the status. If the account holder holding the NRO account returns back home, his status changes from NRI to resident. When this occurs, the NRO account is converted into a regular resident account. In this way, one needs not open a new account to transfer the funds to the local account.
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