Many Indian residents travel to countries abroad for reasons like employment, residence or education. Once abroad, these individuals will need to have access to a savings account to store their salary or remit to India. In this article, we give you information on the process of what should be done with your savings account when you travel abroad.
Step 1: Contact the Bank
Before you travel to the country of your destination you should first inform your bank of the change in your status. Since the government deems that any NRI holding a local savings account is illegal, it is best to start the procedure to convert your normal savings account into a NRI savings account as soon as possible.
Step 2: Documents Submission
After you have informed your bank, you will need to submit certain documents to convert your savings account into a NRI savings account.You will have to submit a certain section of documents like:
* Proof of name and identity
* Proof of signature
* Recent photographs
* Proof of passport with expiry date
* Proof of mailing address
* Proof of a valid visa or work permit
You will have to submit additional documents depending on the purpose of your stay in the country abroad.
Step 3: Select the type of NRI Savings Account
You can choose from the two different types of savings account namely, NRO savings account or NRE savings account. Both these accounts have different features which are mentioned below:
* NRE savings account: The currency that can only be held in this account can be the local Indian rupee and local rupee funds cannot be deposited in this account. The funds from this account can be repatriable fully by the holder and the joint account holder or nominee of a NRI status but not a residing Indian. This account is completely exempted from any tax. Banking cards like the debit card and the prepaid card can be issued from this account
* NRO savings account: The funds in this account can be held in Indian rupees and the local rupee funds can also be deposited in this account. The interest on this account can only be repatriated only after 30% of the tax is deducted at the source. The account allows joint users of both NRI status as well as the resident of India. The local rupee funds are allowed to be deposited by the nominee account holder. However, this account cannot be issued any banking cards.
Step 4: Selecting the Nominee or Joint Account Holder
With each of the NRI saving accounts, the primary holder can select another nominee or joint account holder. Each account has different requirements for different nominees. These nominees are mostly family members but some banks allow even trusted members outside of the family to be nominated.
By geralt from Pixabay