For Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs), managing finances across borders can be challenging. Accounts in India by Non-Residents assist in managing their funds efficiently between India and their country of residence.
Thus, choosing the right type of non resident bank account India is important. Let’s explore everything about accounts in India by non-residents, focusing on their types, benefits, eligibility criteria and more.
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What are Accounts in India by Non-Residents?
Accounts in India by non-residents are opened and maintained by individuals residing outside India. These accounts are opened to help non-residents manage their finances, including remittance, savings, and investment while adhering to the Reserve Bank of India (RBI) regulations.
These bank accounts in India by non-residents not only facilitate easier financial management to the NRIs but also offer unique benefits that align with their diverse needs. Moreover, Indian banks provide specialised accounts designed to cater to different financial purposes for non-residents. Let’s look at the specific types of accounts available for non-residents in India!
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Types of Accounts India for Non-Residents
There are three types of accounts in India for Non-Residents that they can open to manage their finances effectively. These are the NRE (Non-Resident External) Account, NRO (Non-Resident Ordinary) Account, and FCNR (B) (Foreign Currency Non-Resident) Account.
Each account serves distinct financial needs and offers specific features and benefits. Let’s take a closer look at accounts in India by Non-Residents one by one!
NRE (Non-Resident External) Account in India
An NRE account in India for Non-Residents is designed to park their income earned outside India in Indian Rupees (INR). This account in India by non-residents is mainly used to transfer funds to India for family support, investments, or savings.
Key Features:
- Currency: Held in Indian Rupees (INR).
- Source of Funds: Funds must be remitted from outside India (foreign income).
- Repatriability: Fully repatriable to the country of residence.
- Taxability: Tax-free interest in India under Section 10(4) of the Income Tax Act, 1961.
- Joint Account: NRE joint account with a resident Indian can be held jointly with other NRIs or PIOs.
Best for: NRIs who want to remit money to family members or invest in India, as the funds in NRE accounts are tax-free.
NRO (Non-Resident Ordinary) Account in India
The NRO account in India for non-residents is primarily used to manage income earned in India, such as rent, dividends, or pension. This account in India by non-residents is suitable for NRIs who have income sources within India and need a convenient way to manage them.
Key Features:
- Currency: Held in Indian Rupees (INR).
- Source of Funds: Income earned in India (rent, dividends, etc.).
- Repatriability: Funds in NRO accounts can be repatriated to a foreign country but are limited to USD 1 million per financial year.
- Taxability: Income in the NRO account is taxable in India.
- Joint Account: Can be held jointly with residents on a “former or survivor” basis.
Best for: NRIs who have income in India and wish to manage it effectively.
FCNR (B) (Foreign Currency Non-Resident) Account in India
The FCNR (B) account in India is ideal for non-residents who want to hold their deposits in foreign currency and avoid exchange rate fluctuations. This account in India by non-residents allows NRIs to maintain their funds in major foreign currencies like USD, EUR, GBP, and more.
Key Features:
- Currency: Held in foreign currencies such as USD, EUR, GBP, CAD, etc.
- Source of Funds: Must be remitted from abroad or from earnings abroad.
- Repatriability: Fully repatriable to the country of residence.
- Taxability: Tax-free interest in India.
- Joint Account: Can be held jointly with other NRIs/PIOs.
Best for: NRIs who want to avoid exchange rate risks and prefer to hold funds in foreign currencies. Alternatively, Foreign Currency Accounts by Resident Individuals can be opened to manage foreign currency dealings within India.
List of Top Bank Accounts in India for Non-Residents
When it comes to managing finances in India, non-residents have access to several specialised non-resident Indian accounts designed to meet their unique financial needs. Choosing the right bank account is crucial whether it’s for remittances, investments, or savings. Here is a curated list of the top bank accounts in India for Non-Residents:
| Bank Name | NRE Accounts | NRO Accounts | FCNR Accounts |
| Bank of Baroda | Baroda Power Pack NRE Savings Account, Baroda NRE Salary Savings Account, Baroda Premium NRE Savings Bank Account, NRE Rupee Current Account, NRE Rupee Fixed Deposits, NRE Rupee Savings Account | NRO Rupee Current Account, NRO Rupee Fixed Deposits, NRO Rupee Savings Account | Foreign Currency Non-Resident B Term Deposit, Rupee Linked Foreign Currency Deposit Scheme for NRIs, Foreign Currency Linked Rupee Deposits (FCLRD) Scheme, Resident Foreign Currency (RFC) Account, RFC Domestic Account |
| Citi Bank | Non-Resident External | Non-Resident Ordinary | – |
| DBS Bank | Non-Resident External (NRE) Savings Account | Non-Resident Ordinary (NRO) Savings Account | Foreign Currency Non-Resident (FCNR) Fixed Deposit |
| HDFC Bank | Non-Resident External (NRE) Savings Account, NRE Elite Savings Account | Non-Resident Ordinary (NRO) Savings Account | Foreign Currency Non-Resident (FCNR) Fixed Deposit Account |
| ICICI Bank | NRE Savings Account, NRE FD Account, NRE FD (Without Premature Withdrawal facility) | NRO Savings Account, NRO FD Account, NRO FD (Without Premature Withdrawal facility) | FCNR (B) FD |
| Kotak Mahindra Bank | NRE Rupee Savings Account, NRE Platina Savings Account | NRO Rupee Savings Account, NRO Platina Savings Account | – |
| RBL Bank | NRI Savings Account | NRI Savings Account | – |
| State Bank of India | Non-Resident External (NRE) Account | Non-Resident Ordinary (NRO) Account | Foreign Currency Non-Resident (FCNR) Account |
| Yes Bank | NRE Savings Account | NRO Savings Account | – |
| Federal Bank | Fed NRI Power, Fed NRI Premium, Fed NRI Privilege, SB NRE Eve+, NR Fedfirst | Fed NRI Care | – |
| IndusInd Bank | NRE Savings Account | NRO Savings Account | – |
| Punjab National Bank | NRE (Non-Resident External) Account | NRO (Non-Resident Ordinary) Account | FCNR (Foreign Currency Non-Resident) Account |
| Axis Bank | Easy Savings Account, NRI Prime Savings Account, Mariner Account, Priority Account, and Burgundy Account | Easy Savings Account, NRI Prime Savings Account, Mariner Account, Priority Account, and Burgundy Account | – |
Interest Rates on Bank Accounts in India for Non-Residents
Interest rates are crucial for non-residents when choosing bank accounts in India, as they determine how effectively their parked money can grow. Various banks offer competitive interest rates on Non-Resident External (NRE) and Non-Resident Ordinary (NRO) accounts, catering to the diverse financial needs of non-residents. Let’s take an overview of the interest rates provided by bank accounts in India for non-residents:
| Bank Name | NRO Interest Rates & Minimum Balance | NRE Interest Rates (Less Than INR 2 Crores) |
| Axis Bank | 2.70% – 5.50%, INR 10,000 – INR 10 lakhs | 5.15% – 5.50% |
| Bank of Baroda | 2.90% – 5.30%, INR 1,000 | 4.90% – 5.25% |
| HDFC Bank | 2.75% – 5.50%, (Metro: INR 10,000; Semi-urban: INR 5,000) | N/A |
| Kotak Mahindra Bank | 2.75% – 4.50%, INR 10,000 | 4.50% – 5.30% |
| RBL Bank | 3.25% – 6.25%, INR 50,000 | 5.40% – 6.30% |
| State Bank of India | 2.90% – 5.40%, INR 1 lakh | 5.00% – 5.40% |
| Yes Bank | 5.00% – 7.00%, INR 10,000 | 6.25% – 6.75% |
| Citi Bank | 2.75% – 3.90%, INR 2,00,000 | |
| DBS Bank | 3.00% – 5.00%, INR 50,000 | |
| ICICI Bank | 2.50% – 5.45%, INR 10,000 |
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Difference Between Types of Non-Resident Indian Bank Account
When non-residents plan to manage their finances and open bank accounts in India, they need to understand the distinctions between the various types of bank accounts available in India. As we discussed earlier, non-residents can open three primary accounts in India: the NRE Account, NRO Account, and FCNR (B) Account.
Each of these bank accounts in India for non-residents has distinct features, eligibility requirements, and uses, designed to cater to their financial needs. Let’s understand the key difference between bank accounts in India by Non-Residents in detail:
| Particulars | NRE Account | FCNR (B) Account | NRO Account |
| Eligibility | NRIs and PIOs. Pakistan/Bangladesh entities need approval. | NRIs and PIOs. Pakistan/Bangladesh entities need approval. | NRIs and PIOs. Pakistan/Bangladesh entities need approval. |
| Joint Account | Yes, with NRIs/PIOs or a resident relative. | Yes, with NRIs/PIOs only. | Yes, with residents. |
| Currency | Indian Rupees (INR). | Foreign currencies. | Indian Rupees (INR). |
| Account Types | Savings, Current, FD, Recurring. | Term Deposit (1–5 years). | Savings, Current, FD, Recurring. |
| Repatriation | Fully repatriable (principal + interest). | Not repatriable except income. | USD 1 million/year repatriable. |
| Taxation | Exempt from income/wealth tax. | Taxable in India. | Taxable in India. |
| Loans | Loans in India, not repatriable. | Loans in India, not repatriable. | Loans in India, not repatriable. |
| Premature Withdrawal | Allowed, with conditions. | Not allowed. | Allowed, with conditions. |
Eligibility Criteria for Opening Non-Resident Accounts In India
Opening a bank account in India by non-residents involves meeting specific eligibility criteria set by RBI, financial institutions and regulatory authorities NRI status, valid documentation, and residence requirements. Non-residents need to meet the following criteria to open NRE, NRO, or FCNR accounts in India:
- NRI Status: Must be a Non-Resident Indian or a Person of Indian Origin.
- Residence Requirements: Must have stayed outside India for a specific period as per the guidelines provided by the Reserve Bank of India (RBI).
- Valid Documentation: NRIs/PIOs must provide proof of their non-resident status and submit valid identification and address proof. Here are a few documents required for opening accounts in India by non-residents:
- Passport (copy)
- Visa or Resident Permit (if applicable)
- Proof of Indian address and overseas address
- Recent passport-sized photographs
- Income documents (for NRO accounts)
Advantages of Non-Resident Accounts In India
Non-resident accounts in India offer a range of benefits tailored to the unique financial needs of NRIs and PIOs. Here are some of the advantages of accounts in India by non-residents:
- Tax-Free Interest (for NRE and FCNR Accounts): NRIs can enjoy tax-free interest income on their NRE and FCNR accounts in India, making them an attractive option for savings.
- Repatriation Flexibility: Both NRE and FCNR accounts allow easy repatriation of funds to the country of residence, providing financial flexibility.
- Investment Opportunities: NRE accounts allow NRIs to invest in India’s financial markets and real estate.
- Currency Management: FCNR accounts allow NRIs to hold funds in foreign currencies, protecting against exchange rate fluctuations.
Disadvantages of Non-Resident Accounts In India
While Non-Resident Accounts in India offer numerous benefits, such as facilitating remittances and investments, they also come with certain drawbacks. Understanding these disadvantages is crucial for NRIs and PIOs to make informed financial decisions. Here are some of the disadvantages of accounts in India by non-residents:
- Limited Repatriation (for NRO Account): NRO accounts have repatriation limits, restricting the total amount that can be transferred abroad each year.
- Taxable Income (for NRO Account): Interest income in NRO accounts is subject to tax in India.
- Fixed Deposit Limitations (for FCNR Accounts): Fixed deposits in FCNR accounts can only be made for a minimum of one year and a maximum of five years.
Understanding the types of accounts in India by non-residents is essential for managing finances effectively. Whether it’s for easy remittance, tax-free interest, or avoiding exchange rate fluctuations, each account type serves a unique purpose. NRIs and PIOs must evaluate their financial goals and residency status to select the most suitable account.
Make sure to consult with a financial advisor to get the most out of your NRI account and stay compliant with the legal requirements.
This was all about Accounts in India by Non-residents. To learn more about education loans, the best bank accounts for students, forex, banking experience for global students, or international money transfers, reach out to our experts at 1800572126 to help ease your experience with studying abroad.
FAQS on Accounts in India by Non-residents
Accounts in India by non-residents are financial accounts that individuals residing outside India opened to manage their finances, such as remittances, savings, and investments, in compliance with Reserve Bank of India (RBI) regulations.
There are three main types of accounts in India by non-resident: Non-Resident External (NRE) Account, Non-Resident Ordinary (NRO) Account, and Foreign Currency Non-Resident (FCNR) Account.
Accounts in India by Non-residents can be opened by NRIs (Non-Resident Indians) and PIOs (Persons of Indian Origin). Moreover, citizens from Bangladesh and Pakistan require prior approval from the Reserve Bank of India to open these accounts.
The primary difference in accounts in India by Non-residents is that NRE accounts are fully repatriable and tax-free, while NRO accounts are partially repatriable, with repatriation allowed up to USD 1 million per financial year, and the income is taxable.
Yes, non-residents can open a joint NRE or NRO account with a resident relative on a ‘former or survivor’ basis, as part of the accounts in India by non-resident options. The resident relative can operate the account as a Power of Attorney holder.
Yes, interest rates for accounts in India by Non-residents differ between NRE and NRO accounts and depend on the bank’s policy and the deposit tenure.
For accounts in India by Non-residents, NRE accounts are tax-free, while interest earned in NRO accounts is taxable in India. Non-residents may also be subject to TDS (Tax Deducted at Source) under certain circumstances.
Yes, funds from NRO accounts can be repatriated abroad up to USD 1 million per financial year, subject to conditions specified under accounts in India by non-resident guidelines.
When a non-resident returns to India, their accounts in India by Non-residents, such as NRE and NRO accounts, can be converted into resident accounts or RFC (Resident Foreign Currency) accounts.
Loans can be availed against accounts in India by Non-residents. NRE accounts allow loans within India, but funds cannot be used for investments outside. NRO accounts have similar conditions, with funds not allowed for certain investments.
The minimum balance requirements for accounts in India by Non-residents vary by bank. For example, Axis Bank requires a balance of INR 10,000 to INR 10 lakhs for NRO accounts, while HDFC Bank requires Rs. 10,000 for metro areas.
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