Top Features of Banks for NRO/NRE Accounts in 2020
The Indian government provides for outstanding accounts for Non-Resident Indians. An NRI is defined as any person who is an Indian citizen; however, lives outside India for 183 days in the previous financial year. This can be a continuous period or in fragments. These citizens may have gone abroad for employment, business, or are always living abroad.
In India, foreign exchange is managed under the Foreign Exchange Management Act – FEMA. Hence, the central bank of the country – the Reserve Bank of India lays out specific rules and regulations to manage such earnings.
NRIs can open three major types of accounts –
- NRE – Non-Resident (External) Rupee Account
- NRO – Non-Resident Ordinary Rupee Account
- FCNRB Account – Foreign Currency (Non-Resident) Account (Banks)
Considering the above, you must decide on a bank after analyzing the below factors
- Interest Rates
Research the market to find a bank that offers the best interest rates. An NRI’s accounts are known to earn high and attractive interest rates, and that’s the reason most of the NRIs prefer holding these accounts. Almost all private and government sector banks offer this product. Hence, visit their websites, speak to the customer care, and understand what the rate of interest is, how frequently would it be calculated and what would be the method – simple interest or compound interest
Check the eligibility and kind of documentation required by the bank. Although this is a relatively simple process, some banks may have a more stringent protocol to establish that you have indeed been outside India for the eligible amount of time. It’s essential to understand the kind of papers that you would be required to submit. The easier the documentation, the more attractive the bank would be
- Overhead Charges
Funds from both the NRE or NRO account are easily repatriated. Repatriation means that you can remit the funds from India back to your country of residence. Funds from NRE accounts are fully repatriate meaning all funds can be transferred to your overseas account anytime. Funds from the NRO account can be transferred to a tune of 1 Mio USD in one financial year
Hence, please discuss with the bank you choose their charges and applicable fees for such transfers. A bank may give high interest but might charge you heavily for their services. A balance of both these factors should be considered before you decide
These accounts are governed by the rules and regulations of the Reserve Bank of India’s master directions, and these regulations are revisited every year. Thus, you would require a bank that has the expertise to keep abreast of any changes in these rules. You would need expertise in this niche field such that the relationship manager of your account in the bank can advise you in your best interest.
- Customer Service and Digital Access
As you being an NRI would have zero to minimal access to the branch, you need to choose a bank that has effective and efficient customer service. Please find out how operative they are over emails and calls and how promptly they deal with their clients. You should also consider the bank’s digital platform before deciding. The better their digital platform, the easier it is for you to access your account.
In conclusion, India truly values its NRI citizens, and the competition among banks offers you a comprehensive option and many attractive features to choose from. Before choosing your banker, consider that this would be a long term relationship and evaluate them basis the factors mentioned above. This would ensure that you have a genuinely beneficial banking relationship.