After becoming an NRI, your financial and banking needs won’t be the same as a resident. You will no longer benefit from a resident account in the bank. Instead, you will have to understand what is NRI and open special bank accounts available for you. Scroll through this article to understand the different measures available to make the most out of your NRI accounts.
Pick the Right Type of Bank Account
Once you become an NRI, you will no longer need to maintain multiple bank accounts in India. You can have one NRO account to save all your income generated in India, including dividends, rent, pension, and more. Additionally, you can have an NRE account to send funds to your dependents in India or use the account to repatriate funds from long-term investments.
If you want to completely avoid the risk of currency exchange rates, you can go with an FCNR account. Check out the NRI account benefits, including interest, tax exemption, and more, to pick the right type of bank account for you.
Choose Mutual Fund Investments Correctly
Depending on whether you intend to transfer your funds in the future, you should link your mutual fund investments to an NRE or NRO account. You will have to go over the KYC process once again for your existing mutual funds. Additionally, you should change the portfolio status to a non-resident to easily link them to your bank account and manage future investments.
Keep Track of Exchange Rates
Once you understand an NRI account meaning, you will realise that some of these accounts are rupee-denominated. Therefore, these accounts will convert your foreign currency funds into rupees. During the conversion, the prevalent currency exchange rate in the market will be applicable. You must always be familiar with the existing exchange rates to get high savings from your NRI bank account.
Seek Help from a Tax Advisor
You must have a clear understanding of the taxation associated with NRI accounts. You won’t be charged any tax on the principal as well as interest income from an NRE account. But you might be taxed for the income generated from an NRE account in foreign countries.
In the case of NRO accounts, you won’t have to bear any tax payments on the principal amount. However, the interest generated from an NRO account is subject to TDS. Therefore, you should seek assistance from a tax advisor to gain in-depth knowledge about international taxation surrounding your NRI accounts. These professionals will help you park your funds in India in such a way that you can avoid paying taxes.
Wrapping up
If you are an NRI, IDFC FIRST Bank has the best bank account solutions for you. You will be able to use a single app for opening and managing your NRI bank accounts seamlessly. NRIs can open an NRE, NRO, or FCNR account with IDFC FIRST Bank. So, open your NRI account today to take care of all your funds in India.
