Why having an NRE account is beneficial for NRIs
13 December, 2022
According to various reports, the number of Indians who have left for foreign shores for employment has increased considerably. One of the primary motivations for migrating from one nation to another is a higher income, and handling money efficiently is certainly a top priority for those earning an income overseas. Many, if not most, of these employees aim to remit a portion of their income to India, where they usually have a family. Having an NRE (Non-Resident External) account makes it easier to carry out these remittances easily.
What is an NRE Account?
An NRE account is a Savings Account opened in a bank in India in an NRI or PIO's (Person of Indian Origin) name. The account holder can deposit, hold and withdraw their foreign income in this account in Indian rupees.
Like NRE, the NRO (Non-Resident Ordinary) account is another common type of NRI account. HDFC Bank NRI Account categories include NRE and NRO, which include several features and benefits.
Why open an NRE account?
Remitting money to India may be a regular exercise for many NRIs due to family commitments, liabilities, business interests, etc. Doing so from an overseas account may be time-consuming, and while using a third-party remittance agency can be faster, it is often expensive. Additionally, many countries have paperwork and compliance norms regarding money transfers to another country. An NRE Savings Account eases some of these concerns by keeping the money where you plan to spend it, i.e., in India. Besides, you can easily explore business and investment opportunities in India through an NRE account while earning a decent interest on the money deposited therein.
Benefits of opening an NRE Savings Account
To further elaborate, this is why an NRE account can be beneficial for NRIs:
Hold Indian National Rupee (INR) – For an NRI, holding some foreign income in INR could make perfect sense. You can be anywhere in the world and transfer money to your NRE account in India. The Foreign Exchange Management Act prescribes no limit on the maximum amount you can transfer to your NRE account. There is no income, gift, or wealth tax liability on your NRE account. Even the interest earned on it is exempt from income tax.
Spend on your priorities – Even while you live overseas, an NRE Savings Account ensures you never miss out on any Indian investment opportunities. For instance, you can link your NRE account to a repatriable Demat account to invest in stocks. It is also known as an NRI Demat Account. You can transfer all sale proceeds and investment profits to the country of residence. You can even invest in mutual funds, properties, business interests, etc., to grow your family's wealth.
Operational ease – It is not just the convenient remittance and withdrawals that NRE Savings Accounts offer. They are also easy to maintain and operate regularly. With a simple procedure, you can appoint a resident Indian relative as the mandate to operate the account on your behalf. For your use, you get an international Debit cum ATM Card to withdraw as and when required. Using your bank's NetBanking platform, you can easily operate the account from another country. You can deposit money in your NRE account by making wire transfers, depositing foreign currency cheques, or demand drafts.
To sum it up
An HDFC Bank NRE Savings Account offers all these advantages, including attractive and tax-free interest income on the account. With just a few documents, like a passport, PAN, visa/work permit, and overseas or Indian address proof, you can open an HDFC Bank NRE Savings Account online and enjoy world-class banking service from anywhere in the world. Click here to get started!
*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.
