NRI Savings Accounts and Fixed Deposits
Q : What is NRI banking and what are different types of bank accounts which can be maintained by a NRI/PIO in India?
Q : How can I transfer or repatriate Indian Rupees in my NRO bank account (NRO savings account or NRO fixed deposit) in India to my overseas bank account?
Q : How can I transfer or repatriate Indian Rupees in my NRE bank account (NRE savings account or NRE fixed deposit) in India to my overseas bank account?
Money Transfer (Remittances) to India
Properties in India
Carrying currencies to India
A : A Non-Resident Indian (NRI) is an Indian citizen or Foreign National of Indian Origin resident outside India for purposes of employment, carrying on business or vocation in circumstances as would indicate an intention to stay outside India for an indefinite period. An individual will also be considered NRI if his stay in India is less than 182 days during the preceding financial year.
A : A person who is not a citizen of India is deemed to be of Indian origin if he is not a citizen of Pakistan or Bangladesh and if
·he at any time held an Indian passport; or
·he or either of his parents or any of his grandparents was a citizen of India by virtue of the Constitution of India or Citizenship Act, 1955.
A spouse (not being a citizen of Pakistan or Bangladesh) of an Indian citizen or of a Person of Indian Origin is also treated as a Person of Indian Origin for the purpose of NRI deposits if the accounts are held jointly with the NRI/PIO spouse. PIOs are extended the same facilities for bank account maintenance in India as NRIs and are also, for such purposes, called by the generic name as NRIs.
A : With a view to attract the savings and other remittances into India through banking channels from the person of Indian Nationality/Origin commonly known as Non Resident Indians (NRI), Person of Indian Origin (PIO) or Overseas Citizen of India (OCI), who are residing outside India and bolster the balance of payment position, the Government of India introduced Non-Resident(External) Account Rules in 1970 which are governed by the Exchange Control Regulations. NRIs, PIOs and OCIs residing overseas can open and maintain bank accounts known as NRI bank account in India with an authorised dealer or co-operative bank or any other bank or public financial institution which is specially authorised or exempted or permitted in this behalf by the Reserve Bank under the Act without seeking any permission from the Indian government authorities.
An NRI/PIO can maintain an NRO account (Non-Resident Ordinary Rupee Account), NRE account (Non-Resident External Rupee Account) or FCNR (B) account (Foreign Currency Non-Resident Bank Account) with any bank in India. NRO Savings accounts can also be maintained with the Post Offices in India.
A : The Non Resident External Account (NRE Account) is a Savings/Current/fixed deposit account held in India, in Indian Rupees. The foreign currency earnings can be deposited into the NRE account by transfers from your country of residence or transfers from other NRE accounts in India. To deposit money into a NRE account, you need to convert foreign currency into Indian Rupees (USD to INR, GBP to INR, CAD to INR, AUD to INR, etc) by transferring money to your NRE account in India. You can open either NRE Savings or NRE current or NRE fixed deposit in India. To open NRE fixed deposit, you need to first transfer money to your NRE savings account and then give a request to your bank in India to open a NRE fixed deposit. You can always convert the money lying in your NRE account (NRE savings account or NRE fixed deposit) back to foreign currency and repatriate the sum out of India, since both principal and interest earned in this NRE account (NRE savings account or NRE fixed deposit) are freely repatriable.
A : The Non-Resident Ordinary Account (NRO Account) is a Savings/Current/Fixed Deposit bank account held in India, in Indian Rupees. The NRO account is best suited for you if you have earnings in India (such as rent income, dividend, pension, etc). To deposit money into your NRO account, you can either convert foreign currency into Indian Rupees (USD to INR, GBP to INR, CAD to INR, AUD to INR, etc) by transferring money to your NRO account in India or deposit your earnings in India. I would recommend that you open both NRE account and NRO account in India – NRE account to manage your payments in India (EMI for your home loan in India, property purchase, family maintenance, insurance, etc) and NRO account to deposit your earnings in India (such as rent income, dividend, pension, etc). You can open either NRE Savings or NRE current or NRE fixed deposit in India. To open NRE fixed deposit, you need to first transfer money to your NRE savings account and then give a request to your bank in India to open an NRE fixed deposit. The Government of India allows you to repatriate funds from your NRO account (NRO savings account or NRO fixed deposit) up to USD 1 million per financial year abroad. The NRO accounts (NRO savings accounts or NRO fixed deposit) may be held jointly with residents and/or with non-resident Indian (NRI).
A : No.
A : Compare at nriDealExpert.com to find out the best NRO or NRE savings or fixed deposits accounts in India. Click on the link to visit the bank’s website. Complete an application form online or by downloading it. Then, send a printed, signed copy of the form with attested required documents to an address provided by the bank on their website. Alternatively you can visit the bank’s overseas branch or a branch in India on your next visit.
A : Below investment opportunities are open to NRIs:
– NRE savings account, NRE fixed deposit, NRO savings account, NRO fixed deposit and FCNR (B) bank accounts in India
– Investment in securities/shares and deposits of Indian firms/companies
– Investment in immovable property in India
– Investment in Mutual Funds in India
A : Yes you can transfer funds from any bank account including your existing NRE savings accounts, NRE fixed deposits, FCNR deposit or your other NRO savings accounts and NRO fixed deposits.
A : Interest earnings and remittance(s) up to USD 1 million per calendar year from balances in NRO accounts (NRO savings account or NRO fixed deposit) subject to payment of applicable taxes is allowed for any purpose up to an aggregate value of USD 1 million.
In order to do an outward remittance from your NRO bank account(NRO savings account or NRO fixed deposit), you have to walk into any of the branches of the bank in India where you are maintaining NRO account (NRO savings account or NRO fixed deposit) and initiate the outward remittance by completing a request letter specifying the necessary details and submitting below documents:
– Account holder’s Letter giving details of purpose of remittance and certifying the same
– Cheque or debit authority if the same is not contained in the letter in item (i)
– Application in Form A2
– A certificate from a Chartered Accountant in Form 15CA and 15CB
– FEMA Declaration
Form 15 CB needs to be certified by a Chartered Accountant. To download the form please visit the following link: (http://www.tin-nsdl.com/downloads/Form15CB.PDF). On the basis of this certificate, Form 15 CA has to be filled in online at the following link: (https://onlineservices.tin.nsdl.com/TIN/JSP/tds/Form15CAHome.jsp). The printout generated from this site has to then be signed by the remitter and submitted along with Form 15CB at the branch from where the remittance is being made. The detailed process of filling up the form is also available at the above mentioned site. The filled up form then needs to be produced along with the 15 CB to the branch.
A : NRE account (NRE savings account or NRE fixed deposit) balances are freely repatriable. There is no limit specified for outward remittances from such accounts.
In order to do an outward remittance from your NRE bank account (NRE savings account or NRE fixed deposit), you have to walk into any of the branches of the bank in India where you are maintaining NRE account (NRE savings account or NRE fixed deposit) and initiate the outward remittance by completing a simple request letter. Some of the banks offer this facility through their online banking also.
A : Remittances to India are money transfers from Indian workers employed outside the country to friends or relatives in India. India is the world’s leading receiver of remittances, claiming more than 12% of the world’s remittances in 2007. Remittances to India account for approximately 3% of the country’s GDP.
Since 1991, India has experienced sharp remittance growth. In 1991 Indian remittances totaled 2.1 billion USD; in 2006, they were estimated at between $22 billion and $25.7 billion.
Money is sent to India either electronically (for example, by SWIFT) or by demand draft. In recent years many banks are offering money transfers and this has grown into a huge business. Around 40% of the international remittances flow to the three states of Kerala, Punjab and Goa which are among the top international remittance-dependent economies of the world.
A : The overall cost of sending money from USA to India varies from provider to provider. There are two components of cost for sending money to India: “Foreign Exchange Margin” on interbank USD to INR exchange rates (difference between the interbank exchange rate and the exchange rate published by the money transfer provider) and “Charges” or “Fees”. You need to consider both components for each provider to determine the total cost of money transfers to India. Both components may vary from provider to provider based on multiple parameters. Some of the reasons are listed as follows:
1. Transfer amount: Providers may offer different exchange rates (based on different margins) and/or fees for different transfer amounts. Such providers offer better exchange rates on higher amounts. Fees may increase or reduce with increasing amounts.
2. First Transfer: Many money transfers providers offer their best deals on your first transfer after registrations with them.
3. Speed of the money transfer: Providers may offer worse off exchange rates and/or fees for quick money transfer (example next day service instead of two-day service remittance to India service). If you need to send money quickly, make sure you consider these extra fees or worse off exchange rate for an accurate comparison. You will also need to consider how quickly you need to make the transfer and how the transfer works before finalising the provider for money transfer to India.
4. Standing Instruction: Depending on whether it is a one-time transfer or regular transfer, there are providers which offer regular transfer (or Standing Instruction) features where the money is transferred to India automatically at your desired frequency.
5. Delivery method: The exchange rate and fees could vary based on the delivery method. Providers offering cash collection by your beneficiary in India may charge higher fees as compared to money transfer by account credit.
Always check, if you can find a better overall cost of sending money to India by comparing different providers across above-explained parameters. Using nriDealExpert’s Money Transfer to India comparison table, you can quickly and easily compare the overall cost of services and other features for different providers to find the cheapest and best deal for your money transfer to India.
A : There is no limit to how much money you can send to India, provided you can show a legal source of funds. However, different money transfer providers or agents may apply different limits to how much money you can send by a channel or in a given time frame. Moreover, in the USA, there is also a limit of US $14,000 per person per year for the tax-free money transfers. Any amount sent above the US $14,000 per person per year, the sender will be responsible for paying the gift taxes in the USA. Though, if you are married and transferring money to your parents, then you and your spouse can gift up to USD 56,000 to your parents (USD 14,000 to each one of your parents from each one of you).
A : The government of India has offered permission for the Non-Resident Indian (NRI) and Person of Indian origin (PIO) to purchase immovable property in India but only residential and commercial property. The purchase of agricultural land, plantation property or farmhouse in India is not permitted. The government has not restricted the number of residential or commercial properties that can be purchased by the NRIs or PIO.
If the NRI purchases a residential or commercial property, he/she does not have to file any documents or reports with the Reserve Bank of India. An NRI can take on lease an immovable property for a period not exceeding five years without taking permission from the RBI.
An NRI or a PIO can acquire immovable property in India by way of gift either from a person resident in India or an NRI. The property can, however, be only commercial or residential in nature. Agricultural land, plantation property, a farmhouse in India etc. cannot be acquired by way of gift.
The NRIs who have acquired property in India can rent it out without the approval of the Reserve Bank of India. The rent received can be credited to NRO or NRE account or remitted abroad. Authorized dealers could allow the income to be taken home by those who do not maintain an NRO account in India based on an appropriate certification by a Chartered Accountant, certifying that the amount proposed to be remitted is eligible for remittance and that applicable taxes have been paid.
A : No, you cannot, however you can inherit! Acquisition or transfer of immovable property by an NRI is governed and regulated under the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2000. As per the immovable property regulations, a person who is residing outside India but is a citizen of India or a person of Indian origin is allowed to acquire immovable property other than agricultural property, plantation or a farm house in India. However, acquisition of agricultural property by a person who is residing outside India but is a citizen of India or a person of Indian origin is permitted only through an inheritance from a person who had acquired such property in accordance with the provisions of the exchange control regulations in force at the time of acquisition.
A : As per Reserve Bank of India, A resident of India, who has gone out of India on a temporary visit may bring into India at the time of his return from any place outside India (other than Nepal and Bhutan), currency notes of Government of India and Reserve Bank of India notes up to an amount not exceeding Rs.25,000. A person may bring into India from Nepal or Bhutan, currency notes of Government of India and Reserve Bank of India notes, in denomination not exceeding Rs.100.
Any person resident outside India, not being a citizen of Pakistan and Bangladesh and also not a traveller coming from and going to Pakistan and Bangladesh, and visiting India may bring into India currency notes of Government of India and Reserve Bank of India notes up to an amount not exceeding Rs. 25,000 while entering only through an airport.
Any person resident in India who had gone to Pakistan and/or Bangladesh on a temporary visit, may bring into India at the time of his return, currency notes of Government of India and Reserve Bank of India notes up to an amount not exceeding Rs. 10,000 per person.
A : As per Reserve Bank of India, A person coming into India from abroad can bring with him foreign exchange without any limit. However, if the aggregate value of the foreign exchange in the form of currency notes, bank notes or travellers cheques brought in exceeds USD 10,000 or its equivalent and/or the value of foreign currency alone exceeds USD 5,000 or its equivalent, it should be declared to the Customs Authorities at the Airport in the Currency Declaration Form (CDF), on arrival in India.
A : Unlike other major currencies like USD, GBP, EUR; Indian Rupees (INR) is a restricted currency and hence not available to be bought outside India. You can carry foreign currency without any limit. However, if the aggregate value of the foreign exchange in the form of currency notes, bank notes or travellers cheques brought in exceeds USD 10,000 or its equivalent and/or the value of foreign currency alone exceeds USD 5,000 or its equivalent, it should be declared to the Customs Authorities at the Airport in the Currency Declaration Form (CDF), on arrival in India.
Moreover, if you live in the United Kingdom (UK), you get an Indian Rupee Travel Card from ICICI Bank UK plc before you travel to India. It is a INR denominated, pre-paid currency card. You can either apply online or at any of ICICI Bank UK plc’s branches. You can load your ICICI Bank UK Indian Rupee Travel Card before you fly up to a maximum balance of INR 2,00,000 using your nominated UK bank account, and use it to spend Indian Rupees securely when on holiday in India. It also gives you better control of your expenses with free email alerts and online access to a separate Travel Card account. For more information, visit http://www.icicibank.co.uk/personal/travel-card.page.