NRIs (Non-Resident Indians) who are looking to invest in India need to have the right bank account to manage their money. As per the RBI guidelines, when an Indian becomes an NRI, he/she can’t have standard savings accounts in Indian banks. Non-Resident External (NRE) account and Non-Resident Ordinary (NRO) accounts are two popular types of bank accounts an NRI can operate. Both NRI bank accounts serve different purposes. Before deciding the right account for NRIs, you should know about the NRI account types, purposes, benefits, and opening process of each account type.
Also Read: 10 Best NRE Savings Accounts for NRIs in 2023
Types of NRI Accounts
Before applying for an account, it important for NRIs to know about different NRI bank account types as under:
Non-Resident External (NRE) Account
An NRE account can be opened in India by NRIs to deposit and maintain their foreign earnings. It is a rupee-denominated account and comes in two variants – current and savings accounts. The features and benefits of an NRE account are as under:
- You can park only foreign earnings in an NRE bank account.
- NRE accounts can be fully repatriable i.e. you can transfer funds (principal and interest) from an NRE account to your account in the country of residence.
- Both principal and interest earned in NRE savings accounts are not taxable in India.
- You can open an NRE account jointly with eligible NRIs/ PIOs.
- Exchange rate risk is usually higher in NRE bank accounts as the funds are transferred to Indian currency.
Non-Resident Ordinary (NRO) Account
An NRO account is also a rupee-denominated bank account used by NRIs to park their earnings in India, such as rent, dividends, pensions, etc. There are two types of NRO accounts – current and savings accounts. The features and benefits of an NRO account are as under:
- You can park both foreign and Indian earnings in an NRO bank account.
- You can transfer the interest earned without restriction from NRO accounts, but the principal amount has limited repatriability. NRIs can transfer funds only after paying applicable taxes. The repatriation is limited to 1 million USD in a financial year.
- Income accumulated in the NRO account is taxed at 30% plus 3% cess. The interest earned above Rs. 10,000 in a financial year is subject to taxation.
- NRO accounts can be held jointly even if one of the account holders is an Indian resident.
- There is no exchange rate risk in NRO bank accounts as long as the deposit is made in INR.
Also Read: NRI Account Opening Online: 5 Simple Steps
Which NRI account is better NRE or NRO?
As described before, you can open NRE accounts to keep your foreign income in Indian rupees, and NRO accounts are for parking your domestic earnings in India. So, you can choose the right NRI account for you depending on the source of your earnings. However, opening both NRI accounts may be a good idea as they can help you achieve all purposes.
Right bank to open your NRI account
Apart from choosing the right NRI account, it is important to find the right bank to open your NRI account. Several banks with excellent national and international presence allow you to open an NRI account online with a few clicks. Here are the top banks for NRI account opening.
State Bank of India NRI Banking
State Bank of India is the largest public sector Indian bank with a widespread network in several countries in the world. SBI offers an array of NRI banking services to Indians living abroad. NRIs can apply for SBI NRI account opening online on the bank’s website. SBI NRI accounts include SBI NRE accounts, NRO accounts, NRE salary accounts, NRO salary accounts, etc.
SBI NRE vs NRO Account
The main difference between SBI NRE and NRO account is that funds in an NRE account is not taxable in India and can be repatriated outside India without any restrictions, whereas interest in an NRO account is subject to TDS in India and there are restrictions on repatriation of funds abroad.
ICICI Bank NRI Banking
ICICI bank is very popular among non-resident Indians because of its accessible digital banking services. The bank uses the latest technologies to help customers apply for NRI account opening online. You can apply for various types of ICICI NRI accounts such as NRE/ NRO savings accounts, NRI premium accounts, FD accounts.
HDFC Bank NRI Banking
HDFC Bank is a leading private sector Indian Bank with a large network across the country and abroad. Indians living in foreign countries can easily open HDFC NRI accounts online as well as offline. NRI accounts offered by the bank are HDFC NRE accounts, NRO accounts, salary accounts, etc.
Axis Bank NRI Banking
Axis Bank provides one of the best NRI banking services for Indian citizens living abroad. Axis NRI accounts are NRE accounts, NRO accounts, mariner accounts, prime savings accounts, and easy savings accounts.
Also Read: Axis Bank NRI Account Opening
Kotak Mahindra Bank NRI Banking
Kotak Mahindra Bank is a tech-savvy next-gen banking and financial company catering to domestic and NRI customers. You can open Kotak NRI accounts such as NRE accounts and NRO accounts.
Other than the described banks, you can apply for a Federal Bank NRI account, RBL NRI account, Citibank NRI account etc.
Due to lots of information and documentation required to apply for NRI accounts, NRI account opening process is lengthy and cumbersome elsewhere. You can download SBNRI App to apply for an NRI account with nominal documentation in just 10 minutes.
You can also click on the button below to open NRI account. Visit out blog and YouTube Channel for more details.
FAQs
It depends on your requirements. You can compare the features of NRI accounts offered by multiple banks to find the best one. For example if you want to open an account with a top bank you can compare the features of SBI NRI account, HDFC NRI account and ICICI NRI account. However, in terms of interest rate and minimum balance, SBM, Kotak Mahindra NRI accounts can be a smart choice.
Yes, you can open multiple NRE and NRO accounts, but with different banks in India.
Both accounts serve different purposes. For example, NRIs can open an NRE account to park their foreign income and NRO accounts for keeping their Indian earnings.
The minimum balance requirement for SBI NRI account is Rs. 1 lakh for Metro & Urban areas and Rs. 50,000 for Semi-Urban and rural areas.
The minimum monthly balance requirement for an ICICI NRI account is Rs. 10,000.
