What is NRE Account and its Types
28 December, 2022
Non-Resident Indians (NRIs) living and earning abroad usually have two bank account options to hold their earnings. The first is a Savings Account in a bank where they live, and the second is a bank account in India where they can save their money in INR. The second type of account is known as the NRE account.
NRE Account: Meaning, Purpose, Types, and Fees
Also known as Non-Resident External Account, an NRE Savings Account is an ideal option for NRIs to park their foreign earnings. It offers a straightforward way to send money back home to loved ones, can be used for various purposes, and does not incur any tax on the principal amount or interest earned.
For example, let's say you live in Europe and want to financially support your family in India. You can open an NRE Savings Account with HDFC Bank and transfer your foreign income to it. Through NetBanking, you can easily manage this money, whether it is making EMI payments or investments.
An NRE account can be held jointly by two NRIs for added convenience. You can even appoint a mandate in India to manage the account.
Costs associated with an NRE account
There are no account opening fees for an NRE Savings Account. However, you must maintain a minimum account balance, like a regular Savings Account. If you cannot maintain this limit, the bank may charge you a penalty, which differs from one bank to another
Additionally, you get a chequebook, Tax Deducted at Source (TDS) certificate, and a balance certificate for the current year for free.
If you plan to open an HDFC NRE Savings Account, here are some charges which you should be aware of:
Maintain a minimum balance of ₹10,000 if you are opening an account in a metro or urban branch.
Maintain a minimum balance of ₹5,000 if you open an account in a semi-urban or rural branch.
Get a free chequebook with 25 leaves per half year (of the first financial year). After this, you can buy additional chequebooks with 25 leaves from the bank for ₹75.
The balance certificate is free for the current year. To get the balance certificate for the previous year, the charge is ₹50.
The TDS certificate and balance enquiry are both free of cost.
Apart from the low fees, the HDFC Bank NRE Account offers several advantages, such as:
Transfer funds to any place outside India for free
Enjoy 24x7 NetBanking for online transactions
Avail of safe deposit lockers
Get a personalised chequebook. The chequebook will get delivered to the registered mailing address – whichever country you are in. You can call for a new chequebook on NetBanking.
Pay utility and other bills quickly and seamlessly
Invest in mutual funds and stocks through the NRE Savings Account
Other types of NRI accounts
Apart from the NRE account, you can also open the following accounts as an NRI:
Non-Resident Ordinary Savings Account or NRO account: This account can be used to keep your funds earned in India in Indian rupees, such as a pension, rent, etc.
Foreign Currency Non-Resident Fixed Deposit Account or FCNR account: This type of fixed deposit account can be used to save money earned outside India in a foreign currency.
An NRE Savings Account is a beneficial financial tool for managing money and earning tax-free interest. It is easy to use, cost-effective, and safe. Moreover, the HDFC Bank NRE Account offers several great features at minimal costs and low minimum balance requirements.
So, open an HDFC Bank NRE Account online right away for better funds management and to safeguard yourself and your loved ones financially.
Interested to know more on how can you transfer money to NRE Account? click here.
*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.
