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2 mins Read | 8 Months Ago

7 Key Points to Know About NRE Account

Understanding the nuances of financial management while living abroad can be challenging for Non-Resident Indians (NRIs). Indian banks, recognizing this, offer a variety of services tailored to NRIs' unique needs. One such essential service is the Non-Resident External (NRE account), designed to help NRIs efficiently manage their foreign income.

In this blog, we'll explore seven vital aspects of NRE accounts to equip you with a comprehensive understanding of its benefits and how it can aid in effective financial management. So, whether you're an NRI considering your banking options or someone seeking to understand NRE accounts better, this guide is for you.

Here are some key points you must know about an NRE account:

1. Purpose of an NRE Account

NRE account means a rupee-denominated account, meaning it is held in Indian National Rupees. This account is specifically designed for NRIs to help them manage and repatriate their foreign income earned outside India, back to India, in a convenient and tax-efficient manner. NRE accounts can be opened in the form of savings, current, or fixed deposit accounts, making them a versatile option for different financial needs.

2. Tax Benefits

One of the major advantages of an NRE account is its tax efficiency. The interest earned on the funds in an NRE account is exempt from Income Tax in India, meaning you won't be taxed for the interest your account balance generates.

Furthermore, the principal and interest amount are exempt from wealth and gift tax in India, making it an excellent avenue for savings and wealth generation.

3. Repatriation Benefits

Repatriation refers to the ability to move funds freely from one country back to the account holder's home country. NRE accounts offer complete repatriation benefits. Both the principal amount and the interest earned can be freely repatriated back to the account holder's overseas account. This feature is particularly beneficial if you frequently need to transfer funds back and forth between India and your country of residence.

4. Deposit of Foreign Currency

As an NRI, you can deposit your earnings in the form of foreign currency into the NRE account. The foreign currency is then converted into Indian National Rupees at the prevailing exchange rate.

This feature is useful for NRIs as it allows them to deposit their earnings directly into the account without the need for conversion into Indian National Rupees first.

5. Joint Holding

An NRE account can be held jointly with another NRI. This means two NRIs can share an NRE account. However, a joint account with a resident Indian is not permitted, except on a 'former or survivor' basis, where the resident Indian can operate the account only in the event of the NRI's death.

6. Nomination Facility

NRE accounts also offer a nomination facility, which can be utilized by the account holder. The nominee can be a resident Indian or an NRI. In the event of the account holder's demise, the funds in the account can be claimed by the nominee, providing a safety net for the NRI's family.

7. High Interest Rates

NRE savings accounts often offer attractive interest rates, sometimes even higher than regular savings accounts.

For example, ICICI Bank NRI services offers 3.5% per annum for end of day balances equal to or above INR 50 lakhs and 3% per annum for end of day balances below INR 50 lakhs on their NRE savings account. This allows NRIs to earn a good return on their funds while enjoying the many other benefits of an NRE account.

Conclusion

An NRE account offers a range of benefits tailored for the financial needs of NRIs, making it an essential banking solution for managing foreign income. From tax benefits to repatriation advantages, joint holding options, and attractive interest rates, an NRE account ticks all the boxes for efficient financial management NRIs.

Open an NRE Account with ICICI Bank NRI Services

If you’re an NRI (Non-Resident Indian) or a PIO (Person of Indian Origin) looking to open an NRE account, here’s why you must go ahead with ICICI Bank NRI Services:

  1. Minimum Monthly Account Balance: Enjoy the flexibility of maintaining a low balance of just ₹10,000, making banking hassle-free for you.

  2. Anytime, Anywhere Account Access: Their NRI Advantage account comes with an international ATM-cum-Debit card, granting you convenient access to your funds at over 11,000 ATMs and more than 3,000 branches across India. Additionally, their phone and 24x7 internet banking services ensure you have complete control over your account from anywhere in the world. You can even open your NRE account online. It’s a convenient and easy process.

  3. Low-Cost and Hassle-Free Money Transfers: The NRI Advantage account offers you various online and offline modes for money transfers at competitive exchange rates, making it cost-effective and convenient.

  4. Money2India: Experience the safety and simplicity of this online money transfer tracking service, enabling you to transfer funds to over 100 banks in India with ease.

  5. Joint Holding: You can opt for joint holding with another NRI, making it easier to manage your finances together.

  6. Mandate Benefits: As a mandate holder, you'll enjoy added perks such as a free cheque book and ATM card, ensuring smooth and secure transactions.

  7. NRI Advantage: Avail exclusive offers specially curated to cater to your needs, both in India and abroad, providing you with the best of both worlds.

Experience banking like never before with ICICI Bank NRI Advantage account and unlock a world of convenience, security, and attractive benefits for your financial journey.

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