How to Take Care of Your NRI Finances While Moving to Canada

Moving abroad brings about many significant changes to life. You may be shifting to Canada but your financial affairs in India need to be sorted out. They will come into play over the rest of the course of your life. This article is about how to take care of your NRI finances while moving to Canada. 

How to Take Care of Your Finances While Moving to Canada for an NRI
How to Take Care of Your Finances While Moving to Canada for an NRI. Image from iStock.

Use Your Bank Account Differently

For the convenience of accounting and accurate tax reporting, it is best to consolidate your finances if you have various bank accounts in India. Keep a few bank accounts and change them to NRO (Non-Resident Ordinary) bank accounts. You can deposit any form of money earned in India, including rent, dividends, investment earnings, etc., into your NRI account.

Additionally, if you have dependents in India to whom you intend to send money or repatriate money from investments over the long term, you may need to register an NRE account (Non-Resident External). Invest in FCNR deposits (Foreign Currency Non Resident) if you want to keep making new investments in India but don’t want to take on the risk of currency conversion.

Think About Giving Up Your Bank Lockers

The upkeep of bank lockers can be pricey. Most banks require customers to maintain a large account balance and charge a significant annual cost for lockers. Unless you have no other way to store jewelry, valuables, or essential documents, think about giving up these lockers. Choose a bank where you will be maintaining your NRI bank account if you need to keep a locker for better customer care.

Make the Most of Your Equity Investments

You will need to rename your Demat account and plan how you want to handle direct stock investments as soon as your status switches to non-resident. Due to FEMA restrictions and variations in NRI taxation, NRIs cannot trade in the same manner as domestic Indians, according to RBI regulations.

Continue investing in Indian markets in one of three ways. To trade on your behalf, you could designate a mandate holder for your NRO/NRE account, provide a trusted contact a Power of Attorney, or enroll in the RBI’s Portfolio Investment Scheme (PIS) through a broker or bank that is qualified.

Redesignate Your Mutual Funds 

Depending on whether you intend to repatriate money in the future, decide whether to link your mutual funds with an NRO or NRE/FCNR account. You will need to obtain a new KYC (Know Your Customer) in order to reflect your non-resident status for any existing mutual fund investments. In order to link the folios to your NRI bank account and easily handle future investments, SIPs, or redemptions from a foreign location, you must also alter the folios to “non-resident.”

Be aware that managing your mutual fund investments may be difficult if you move to the US or Canada. Numerous domestic AMCs have stopped providing mutual fund services to NRIs based in these nations as a result of the FATCA agreement between India and the US.

Set Up a Property Management Strategy

It might be difficult to manage real estate assets from another country. You are responsible for paying property taxes, paying maintenance fees, electricity and gas bills, and managing recurring repairs. Another fixed expense to consider is the asset’s ongoing mortgage if one exists. It involves both funding the asset’s maintenance and upkeep as well as supervising the job.

Get a property management company on board that can handle the obligation if your property is rented out or you want to get it leased. For a tiny portion of the rent, often between three and seven percent, the service provider will handle everything.

Many astute property management firms now provide owners with a digital portal that enables them to access a summary of their assets whenever they want.

Put Life Insurance Premium Auto-Debit Instructions in Place

Life insurance policies are generally simpler to manage, and NRIs can easily buy new policies for themselves or their dependents. Even foreign currency is generally accepted by most life insurance firms for premium payments. Setting up standing instructions with your bank is advised in order to ensure that premium payments are processed promptly and that your life insurance coverage is unaffected.

Converting your insurance policies to a short premium paying term would be a lot more effective from a management perspective, allowing you to continue using the coverage without making long-term payments.

It is not advised to surrender your insurance policy from the standpoint of wise financial planning because the surrender value will be less than the premiums you paid (due to deductions) and purchasing a new policy will always cost more owing to advancing age.

To ask any questions related to the rights of NRIs, PIOs, and OCIs, you can download SBNRI App from the Google Play Store or App Store. You can also use the SBNRI app for investment in stock market/ mutual funds, NRI account opening, tax filing, etc. To ask any questions, click on the button below. Also, visit our blog for more details. 


What account should NRIs change their accounts to?

They should change their accounts to an NRO (Non-resident Ordinary) Account.

What should NRIs do with their lockers?

It is advisable to do away with lockers to avoid unnecessary charges. If you need to keep one you can choose a bank where you have an NRI account.

Should NRIs keep many bank accounts in India?

No. They should consolidate their funds and keep a few accounts.

Which account may NRIs need to send money to dependents or repatriate money?

They may need an NRE (Non Resident External) account for these purposes.

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