As an NRI, you can find plenty of options to invest your funds in. One of the options is the NRI account, which offers you good returns based on the amount and currency you have invested.
However, this also depends solely on the type of account you have invested in. Out of all the options that are available, the saving accounts is the most favourable. Let us take a look at the different features of this account to know how you can benefit from it:
NRE Savings account:
If you are earning foreign income outside the home country, the Non – resident external savings account, also known as the NRE savings account is the ideal choice. It can be opened by any individual NRI with an account joint holder. The said joint account holder can be either another NRI or by a resident of India. However, the resident of India can operate the account only as mandate or power of attorney holder. He has the power to withdraw funds, through certain restricted means only. When investing your foreign funds in this account, the currency is converted into the local currency and can be withdrawn in this currency alone. One would also have to maintain a minimum balance of Rs. 10,000 to avoid any penalty charges. One of the major benefits of this type of savings NRI account is the fact that it is not taxable. In other words, the interest and income that is earned is exempted from tax, especially in India.
NRO Savings account:
The Non-Resident Ordinary Savings Account also known as the NRO savings account can be used to store income earned from India such as rent, dividends, pensions and more. This account can be opened by an individual NRI and can be jointly held by a NRI or a local Indian resident. Like the NRE account, the joint Indian account holder can have access to the funds in the account, and withdraw them with the necessary permission. The currency that is held in this account is of the local Indian currency only. When it comes to repatriating the fund from this account, there is a limit of 1 million USD in a financial year, which is extended to bonafide purposes after the payment of applicable taxes. A monthly balance of INR 10,000 Rs has to be maintained to avoid any penalties. One major drawback of this account is the taxable interest. Under the Indian Income tax Act, the income that is earned in this account from the sources in India are taxable.
RFC Savings account
A Resident Foreign Currency Savings Account also known as the RFC savings account can be opened by NRIs who have returned back from abroad permanently to India. However, their foreign residency must be more than a year. When transferring funds to this account, only certain currencies, namely, the USD, GBP and the Euro can be transferred in this account.
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