Non-resident Indians or NRIs must maintain an NRI account to maintain and manage their funds in India effectively and efficiently. When it comes to managing foreign earnings, NRIs are not permitted to manage it through regular savings, current, or FD accounts in India. For that, they must open an NRI account.
There are three types of NRI accounts that can be opened in India by NRIs: NRE accounts, NRO accounts, and FCNR accounts. An NRE account is the best choice if you want to keep your overseas earnings in Indian currency. There are four types of NRE accounts to choose from: savings, current, recurring, and fixed deposit. NRIs can choose to open an NRE account in joint operation mode with another NRI or a resident Indian. Here are some of the benefits of having an NRE account:
So, these are the major benefits of having an NRE account.
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The world is seeing a declining interest rate scenario, with citizens in a few countries even facing negative interest rates. In such a terrible scenario for savers, one is frequently on the lookout for better investment options for their extra funds. Non-resident Indians or NRIs can open NRE savings accounts and NRE fixed deposits to park their foreign income, which will undoubtedly come in handy. This is because NRIs can benefit from higher returns, advantageous tax treatment, and the ability to repatriate cash back through such accounts.
The post mentions the 3 main benefits of NRE fixed deposits. 1. There is No Income Tax on Interest Income According to Section 10(4) of the Income Tax Act of 1961, interest income from NRE accounts, including NRE fixed deposits, is free from taxation (as amended). As a result of this exemption, the bank is not required to deduct any tax on such interest income on NRE savings accounts or NRE fixed deposits. As a result, while repatriating funds to their NRE account or investing in NRE FD, NRIs do not need to worry about any taxation-related compliance, such as tax payment and return filing. 2. Better Interest Rates Interest rates on NRI fixed deposit in India are unregulated and are not subject to approval by the Reserve Bank of India, the country's central bank. As a result, various banks may offer varying interest rates on NRE fixed deposits. To attract more customers, banks are offering attractive interest rates which eventually benefit NRIs by helping them to generate better and assured returns. 3. Funds Repatriation Flexibility According to current regulations, the balance in NRE accounts, both savings and fixed deposit accounts, is easily repatriable outside of India. In other words, non-residents are free to transfer their balances back to the country where they are working. This is true not only for the real funds deposited into the NRE account in foreign currency but also for the interest received on such funds. As a result, non-residents have the freedom to move monies to India in NRE accounts, invest in NRE fixed deposits, and even transfer the funds back without restriction. Take advantage of these benefits by investing in NRE FDs from the best bank for NRI account right away. Over the last two decades, India has seen tremendous industrial progress. As a result, foreign direct investment (FDI) is increasing in the country. This has inspired non-resident Indians (NRIs) to regard India as a legitimate investment and profit-making destination.
With each passing day, the Indian Government is making the country more business friendly. With so many options for investing, NRIs are having difficulty determining which are the best for them. In terms of returns, the following are the top investment opportunities for NRIs in 2021: Fixed Deposits (FDs) Fixed deposits (FDs) are popular not just among resident Indians, but also among non-resident Indians (NRIs). Bank FDs are regarded as the safest investment option due to the rarity of banks default on them. NRIs can open FDs using their FCNR, NRO, or NRE accounts, and the interest rate on fixed deposit rely on the bank, the amount, and the duration of the deposit. National Pension System (NPS) An NRI between the ages of 18 and 60 can open an NPS account with an Indian POP (Point of Presence). If you have a PAN card or an Aadhaar card, you can also open an eNPS account. You may want to consider investing in the National Pension System using your NRO or NRE bank account. For convenience, you can open an NPS account with the same bank where you have your NRO or NRE account. Furthermore, the pension from NPS will be paid in Indian rupees. Direct Equity If you are an active investor willing to take some risk in the stock market, you should consider investing in equity. NRIs can participate directly in the Indian stock market through the RBI's Portfolio Investment Scheme (PINS). To invest in the Indian stock market, NRIs must have an NRE/NRO bank account, a Demat account, and a trading account. Public Provident Fund (PPF) You can keep the PPF account that you opened when you were a resident Indian. Unfortunately, you cannot extend the PPF account after the 15-year term to maturity. In India, an NRI cannot open a PPF account. So, these are some of the investment options for NRIs. |
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