Saturday, April 29, 2017

NRE Saving Account FAQ - Non Resident External Account Frequently Asked Questions Answers

The NRE account stands for the Non-Resident External account and I strongly believe, every NRI who has any interest in India must open this account. It has some excellent features which are not available to other types of account e.g. interest earned on NRE account is tax-free in India and not only that, both principal and interest are fully repatriable to overseas. You don't need to ask for permission or worry about paperwork, if you need money in overseas, you can always transfer from your NRE bank account.



Since many NRIs are not aware of this account and them always some doubt and questions I have collated all frequently asked questions about NRE saving account and listed in this article. If you have any query, question or doubt related to NRE account and you cannot find the answer in this article then please drop a comment and I'll try to find an answer for you.


NRE Saving Account Frequently asked Questions

Here is my list of some of the most frequently asked questions about an NRE saving account. It contains information related to opening NRE account, funding your NRE account, transferring funds from NRE account, opening NRE fixed deposit, taxation in India and abroad, Repatriation of principle and interest, and other nitty-gritty related to NRE account.  If you have any question other than these, then please drop a comment.


Who can Open NRE Accounts?
Any NRIs, PIO, and OCI are eligible to open NRE account on any private sector or public sector banks. NRI stands for Non Resident India, PIO stands for Person of Indian Origin and OCI stands for Overseas Citizen of India. Out of these three, only NRI hold an Indian passport.


Is it mandatory for an NRI to open NRE Account?
No, it's not mandatory for an NRI to open NRE account but it is the best thing an NRI can do. Since most of the NRI send remittance to India and keep some Indian rupees in India. By using NRE account for that you not only save tax but also can repatriate the money to overseas when you need e.g. to buy your home in abroad.



Why an NRI should open NRE saving account? (answer)
There are many reasons, but the main reason is NRE account provides the best way to keep your overseas earning in INR in India. The interest earned on NRE account is not taxable in India and both principal and interest are fully repatriable which means you can transfer fund to overseas without asking for permissions. You can also do investments e.g. you can open NRE fixed deposit by using the net banking facility of NRE saving account and can also invest in mutual funds by using Investment banking. See here to learn more about benefits of NRE saving account


What is the difference between NRE and NRO saving account?
There are many differences between these two types of saving accounts NRI can open but the most important are that you can deposit INR into NRO account but you cannot deposit INR to NRE account. Second, interest earned on NRO saving account and fixed deposit is taxable in India. See here to learn more difference between two.


Can you transfer fund from NRE to NRO account?
Yes, you can transfer money from one NRE to another NRE account as well as to any NRO account. You can even transfer funds from NRE account to any saving account e.g. NRE account of your wife, relative or friend, an NRO saving account, or simple any resident saving account. See here for more details.


Can you transfer funds from NRO to NRE account?
No, you cannot transfer funds from NRO to NRE account because for funds deposited into NRE source must be overseas, also INR cannot be deposited into NRE account. This question is opposite to previous questions, even though you can transfer money from NRE to NRO account but the reverse is not allowed. If you want, you have to complete some paperwork then you can transfer up to 1 million USD per the calendar year. See here to learn more about it.



How to open NRE Saving Account?
You can open NRE saving account by personally visiting any public or private sector banks e.g. SBI, HDFC, ICICI, AxisBank on your visit to India or you can open them from overseas as well. You need to take your essential documents e.g. identity proof, NRI status proof, address proof and KYC document along with you, both original and photocopy to open NRE account. Many Indian banks have overseas branches which provide the NRE account opening facility on abroad e.g. SBI has branches in Singapore, USA and UAE where you can personally go and open NRE account.


Can you open NRE saving Account Online?
Yes, you can open an NRE saving account online by filling an online form and uploading scanned copy of your documents. Many private Indian banks e.g. Kotak Mahindra Bank, Citibank, HDFC, and YESBank provides online facility to open NRE account. For example, you can visit https://apply.kotak.com/applynow/nrihome/home.action?SWNToken=1491889460037& to open an NRE saving account with Kotak online.


What is the interest rate payable on NRE savings account?
This varies from one bank to other e.g. ICICI bank gives only 4% interest on NRE savings bank but some banks e.g. Kotak Mahindra Bank and YESBank offers up to 6% interest on NRE savings bank. Some foreign banks e.g. DBS also gives up to 5% interest on NRE Saving account.


What are the steps to open NRE saving account online?
When you open NRE account online, then you first need to fill the online form, upload scanned copy of your travel documents e.g. passport, VISA, resident permit, foreign address proof e.g. utility bills or local bank statements. Once the form is reviewed by the bank, they send you the PDF which you can download and print to sign. Once that is done, they will arrange for free pickup of documents and you will get your welcome kit in a couple of weeks. See here to learn more.


Do you need to attest your document if you open NRE account from Overseas?
It depends on the bank to bank. Some banks e.g. SBI requires you to attest your documents from Embassy, Notary or Bank itself, while some banks like HDFC and Kotak Mahindra bank accepts self-attested documents depending upon the country you are currently living and on extra conditions e.g. sending cheques of initial funding. Again, you need to talk to the bank you are opening NRE account for their options. I expect all major banks e.g. ICICI, Axis Bank, Bank of Baroda, DBS offers this facility.


Can you transfer money from NRE to FCNR account?
Yes, you can transfer funds from NRE saving account o open FCNR fixed deposit. But, you should be careful because NRE account is maintained in INR and FCNR is maintained in foreign currency there is exchange conversion need to happen. So it's subject to exchange rate loss. Except that, it is the most convenient way to open FCNR fixed deposit because you can do it online from the comfort of your office and home using internet banking facility of your NRE saving account.


What are main benefits of NRE saving Accounts?
There are several benefits of opening an NRE saving account, here are some of them
i) Interest earned is tax-free in India
ii) You can transfer or repatriate both principle and Interest amount to Overseas.
iii) You can do investments like NRE fixed deposit which offers attractive interest rates.
iv) You can invest in a Mutual fund by using the NRE saving account.
v) You can pay bills in INR on behalf of your parents.
vi) You can transfer INR to any NRO or resident saving account in India.


How to transfer money to NRE account?
This is the most frequently asked question among NRIs who have just opened an NRE saving account. Since you cannot deposit Indian Rupees on NRE account, you can only fund it by using foreign currency cheque or remittance. You can also deposit traveler's cheque on your visit to India but Remittance is the most popular way to transfer money to your NRE account from overseas.

You can use any online money transfer service e.g. Money2India, Remit2India, or Click2Remit to send money from abroad to India in your NRE account.

Most of the banks provide their own remittance website e.g. Money2India is from ICICI bank, Remit2India is from HDFC bank and Click2Remit is from Kotak Mahindra Bank. SBI also provide some online option but I have never used that. For Singapore-based NRIs, DBS bank provides IndiaRemit which allows you to transfer SGD to India by using local DBS bank account. See here for step by step guide to deposit money to your NRE account.


Which is the best bank to Open NRI Saving Account in India?
I have run a survey on my website, you can see at the left top and as per that SBI and ICICI seems to be the best bank to Open NRI saving account, with HDFC being the close second. As per my personal experience, I like HDFC and Kotak more for their service and technologies. You can read some of the feedback provided by our readers in the comments section of this article to decided which is the best bank to open NRE saving account, my vote goes to HDFC bank though.


Can you transfer funds from NRE to Resident Saving Account?
Yes, you can transfer funds from NRE to Resident saving account but the opposite is not allowed, which means you cannot transfer money from a resident saving account to NRE account.


How to deposit money into NRE account?
There are several ways to deposit money into your NRE account as shown below:
i) By remitting money from overseas.
ii) By depositing foreign currency change on a freely convertible foreign currency e.g. USD, GPB, SGD or EURO.
iii) By depositing traveler's cheque on your visit to India.
iv) By transferring fund from existing NRE accounts
You can see this post to find more ways to deposit money into NRE accounts


Can an NRI open more than one NRE account? (answer)
Yes, an NRI can open more than on NRE account and I even suggest you have at least two to three NRE accounts just to be on safe side. Why? Well, sometimes due to technical glitch if internet banking or ATM of one bank account is not working then you are stuck, having two more cards and NRE account you have better option to survive. Another reason are the availability of ATM, though SBI have ATM everywhere, other might not have, even if they have they might not have funds as it happened during the great demonetisation on India in 2016. By having more than one account you diverse your money to increase safety and convenience.


Can you have joint applicant on NRE saving account? (answer)
Yes, you can jointly open an NRE saving account with another NRI e.g. your spouse or your children. The condition is that joint applicant on NRE account must be NRI. You also need to submit his identity proof, address proof and NRI status proof along with yours while opening the NRE account. I strongly suggest you open NRE account jointly as any one of you can operate the account when your partner is not around.


Can you have a nomination on NRE saving account?
If you cannot open a joint NRE account due to any reason I suggest you at least nominate someone e.g. your husband/wife/parents or children. Like any other saving account and fixed deposit, NRE saving account also allows nomination and you can fill nominee's details while opening the NRE saving account. If you have an existing account without any nomination, you can still add nominee by contacting your bank. See here to learn more about the nomination in NRE saving account.


How to send money from NRE account to Overseas?
The net banking interface of NRE account provides you option to send money to your overseas bank account. This is known as outward remittance or repatriation. Alternatively, you can also send money using SWIFT and ACH payment transfer.


Can NRI deposit old Rs 500 and Rs 1000 notes into NRE/NRO Account?
No, they can only deposit the old Rs 500 and Rs 1000 notes into their NRO account and that too only until 30th June 2017, after that you cannot deposit old notes anymore.



What are Minimum Account Balance and Penalty charges for NRI Saving Account?
It varies between banks to banks and depending upon whether your branch is in metro, city or town. In general, the minimum balance can vary from 5000 to 25000 and penalty may vary from Rs 100 to Rs 1000. I have compared the minimum account and penalty charges for major banks e.g. ICICI vs HDFC vs SBI vs Kotak here, you can check that out to get an idea.


What happens to NRE saving account when NRI return back India for good?
Depending upon their residential status, NRI can keep the NRE saving account for a couple of more years e.g. if they qualify for RNOR (Resident but not Ordinary Resident) status. If they don't then they have to inform the bank about their NRI status change and the bank will convert the NRI account to normal resident saving account. See here to learn more about it.


Can I open an NRI account without having to visit a Branch in India?
Yes. You can open an account with any HDFC Bank or Kotak Mahindra branch in India without having to come to the branch in India. They provide an online form to fill the details and free pickup service to collect documents from an overseas address. Some bank also provides local PO box e.g HDFC bank provide local PO box address in Singapore, USA, and UK to send your queries. You can talk to their Representative for more details. See here for step by step guide to open NRI account (Both NRE and NRO) from overseas online.


Can you register a mandate holder to NRE Saving Account?
Yes, many banks allow you to register a mandate holder for your NRE account. A mandate holder is entitled to operate your NRE account locally, though it has limited rights. For example, a mandate can issue cheques for local payments on behalf of the account holder but cannot do following things:
  • A mandate holder cannot open or close NRE fixed deposits.
  • A mandate holder cannot repatriate funds to anyone other than the account holder
  • A mandate holder cannot gift funds i.e. he cannot transfer funds to anyone.

How can you register a mandate on NRE account?
You can register a mandate holder for your NRE account but fill the Mandate request form. You can download the form from your bank website. The mandate holder then needs to visit a local branch and submit the request form along with relevant documents. You can later cancel or update mandate holder from your NRE account as well. See here to learn more about registering a mandate on your NRE account.


What are the documents required to open an NRE Savings Account?
The actual list of documents varies from bank to bank, but more or less than required following category of documents:
1) Identity proof which can be national ID, Aadhar, Driving license, Passport etc
2) NRI status proof which includes travel documents i.e. Passport, VISA, resident permit, green card, PR, etc
3) Foreign Address proof which can be utility bills, credit card bills, local bank statements, rent agreement etc
4) Local Address proof which can be Passport, Voter ID card or similar documents.
5) PAN card
6) Recent Passport size photos.

You can download the complete list of documents from the bank website where you want to open NRE savings account e.g. ICICI bank, Kotak Bank, HDFC bank or State Bank of India.


What is the minimum amount to open an NRE savings accounts?
Again this depends on banks to banks e.g. ICICI bank allows you open NRE saving account with minimum Rs 10,250 while Kotak bank also requires minimum 10K INR. In general, 10,000 Indian rupees is enough to open an NRE saving accounts with Indian banks.


Do funds in NRE Savings account repatriable? (answer)
Yes, funds on NRE savings account is fully repatriable, which means you can transfer both principle and interest from NRE account to Overseas bank account.


Is Interest earned on NRE Savings Account taxable in India? 
No, interest earned on NRE savings account is not taxable in India, in fact, that's the biggest reasons many NRIs open NRE account to keep their money in INR. See here to learn more about taxation on NRE saving account.


Do you get Debit Card when you open NRE Saving Account?
Yes, most of the banks provide International debit card cum ATM card when you open NRE bank account. You can use that card for online shopping, ticket booking and for any other expenses. The limit on those debit card is by default Rs 25,000 per day for cash withdrawal and transaction limit is up to 50K INR per day, but that is something you can ask to increase once you open the account.


Can a Joint account have separate Debit Card?
Again this depends on the bank, but most of the bank allows a joint account holder as a separate debit card if the mode of operation of the account is other than FRS (Former or Survivor) or JTLY(Jointly). Some bank even issues complimentary debit card linked to your account for your parents to be used in India only.


Do banks levy any service charge for use of other bank ATMs?
Things are changing fast in India, earlier most of the banks allow NRI customer to use their ATM card on other bank's ATM for at least 5 times for FREE and then nominal 10 to 15Rs charge. Now, the model is changing and in future, it might depend on how much money you keep in your NRE saving account. For now, I think 5 free withdrawal with other bank ATM is what you get.


What is meant by an Inactive / Dormant NRE saving account?
Due to safety concern bank can mark your NRE saving account as Inactive if there is no transaction happens in last 12 months and Dormant if no transaction happened in last 24 months. You will receive email and letter when your NRE saving account turns Inactive or Dormant. Though, you can always request to activate an Inactive NRE saving account.


What is the difference between Inactive and Dormant NRE Savings Account?
They are two different statuses of your account without any activity, Dormant is more restricted than Inactive, here is a couple of key difference between them:
1) Your NRE account becomes Inactive if no transaction on 12 months while it becomes Dormant without any transaction on last 24 months.
2) You cannot request for a checkbook if your Account is Inactive, but if your account is Dormant then following things are not allowed:
- Requests for issue of checkbook
- Withdrawal through ATM, Internet Banking, Branch e
- Renewal of ATM/ Debit Card
- Requests for change of address, addition or deletion of joint holder, signature modification


How to activate an Inactive or Dormant NRE Savings Account?
It's easy to activate an Inactive account. You can make your account Active by doing transaction by cheque, ATM or by visiting the nearest Bank branch in India and submit an account activation letter.

For activating a Dormant account you can do following things:
i) Raise a Service Request using the NetBanking channel.
ii) Call to Customer care executive using Phone Banking Channel.
iii) Write an account activation request to Bank of India


How to transfer funds from NRE account?
If you have used net banking before then NRE account net banking interface is quite similar. You can transfer Indian rupees to any NRO or Resident saving account using NEFT, RTGS or IMPS. You first need to register payee and then you need to confirm Payee and then you can transfer money to them. The maximum limit varies between banks but most of the bank e.g. ICICI bank allows you transfer up to 5 lacs per day. You can also transfer funds to overseas from NRE account. See here for step by step guide of sending money to overseas from NRE account.


How can I repatriate funds from my NRE Saving account?
As I said, NRE savings account allows you to send funds to overseas. You can repatriate funds in two ways:
Demand Draft
Wire Transfer

Some banks e.g. HDFC bank also allows repatriation of funds from "NRE account' and ' Repatriation of FCNR Deposit is now possible through Netbanking, which is much more convenient. Even SBI also allows you to transfer fund overseas using Internet banking by placing outward remittance request. you need to add a beneficiary first similar to how you add payee for local transfer.

Alternatively, you can personally visit the branch and place outward remittance request or send a courier/post to your home branch. See here to learn more about repatriation from NRE account.

Non Resident External Account Frequently Asked Questions Answers



What is the limit to transfer funds from NRE account to Overseas bank account?
This is known as repatriation or Outward Remittances from India. Since NRE account is freely repatriable, there is no limit on how much you can transfer. You can transfer as much money you have in your account. Though I suggest transferring on small chunks just to be on safe side.


Can you open an NRE account without Nominee?
Yes, you can but I won't advise that to you. In case you do, you need to fill a 'No Nominee Declaration' form to confirm that you don't want to register a nominee. See here to learn more about the nomination on NRE account.


Can I nominate more than one person for one account?
No, you can only have one nominee for your NRE savings account.


Can you open NRE fixed deposit and NRE recurring deposit using NRE Saving account?
Yes, in fact, that's the preferred way to open NRE fixed and recurring deposits. Just log in to your net banking account and place a request to open NRE fixed deposit. You can see the interest rate and other terms and conditions. See here to learn more about it.


Can an NRI account be opened or maintained along with Resident Indian (Domestic) account?
No, it's not possible. In order to open NRI account, the existing Resident Indian (domestic) account (s) either needs to be converted into NRO account or to be closed down. An NRI cannot maintain a domestic account.

NRE Saving Account FAQ


Can any person in India be authorized to operate NRE Savings account On your behalf?
Yes, an NRI can authorize resident Indian to operate your account by way of giving suitable Power of Attorney (POA). Alternatively, you can also request to add a Mandate in your NRE saving account but it will have limited rights.


Can you transfer NRE Savings account from one branch to another?
Yes, banks allow that you can talk to your relationship manager for doing so.


How to close an NRE Saving Account?
You can request for Account Closure by downloading the 'Account Closure' request form, filling it up and mailing it to your bank's India address. If you have joint NRE savings account then this application must be signed by all Joint Holders in the same order of names as appearing on the account to be closed. If you are a US-based NRI then some bank will also ask you to complete FATCA Annexure.


That's all about some of the frequently asked questions about NRE savings accounts. If you have any other questions which are not on this list then you can drop a comment and we'll try to find an answer together.

Friday, April 21, 2017

Migration to Australia, NewZeland, USA, UK, and Singapore More Difficult for Indian IT Professional Now

This month, particularly this week, starting from 18th April was pretty bleak for Indian IT professional looking for migration and an onsite opportunity to Australia, NewZeland, and the USA. Things were not easy from quite some time where many firms all over the world chopping and moving workforces from high-cost location to low-cost location and thus reducing the onsite opportunity for a large number of ambitious Indian IT guys working in service-based companies like Infosys, TCS, Wipro, and CTS. Things have started getting even worse due to a series of VISA reforms done by these nations to employ more stricter policies on immigrants has made the onsite dream of Indian IT professional even more difficult.

Friday, April 7, 2017

Can You transfer money from NRE to another NRE, NRO, FCNR and Resident Saving account? ICICI or HDFC?

One of the most common question among NRIs (Non-resident Indians), especially among IT professionals traveling to the USA, UK, Singapore onsite are whether they can transfer funds from one NRE account to another NRE account, or NRO account, or FCNR account, or a Resident saving account or not? Since many IT professionals have their resident saving account in India when they travel to Overseas and which they later converted to NRO account, this doubt is obvious. Well, since NRE account is maintained in Indian rupees, there is no restriction on transferring your money from one NRE account to another NRE, NRO, FCNR or resident saving account.

Friday, March 31, 2017

Can you send money from abroad to a normal Indian savings account, will it be taxable?

One of the frequently asked questions by people going abroad is that, whether they can send money to a resident saving account in India or not? Will that be taxable? The answer to this question depends upon whose resident saving account? For example, if you send money from abroad to a normal saving account of your parent, spouse, or children then it will be considered as a gift from Income tax perspective and gift to parent, spouse, and children are not considered as income in India, hence they will not be taxable.   But, if you send them to somebody else’s normal saving account then it will be considered as their income and they are liable to pay income tax on that.

Tuesday, February 21, 2017

Difference between Wire Transfer (SWIFT) and ACH (Automated Clearing House) Money transfer

Even though both Wire transfer and ACH are ways to send a large amount of money from one place to another, there are some significant differences in the way they operate. A wire transfer, also commonly referred as SWIFT transfer is an electronic transfer of money from one financial institution to other across the financial network. The word "wire" is chosen to signal the electronic transfer of money. It is fast and secure and can be used to transfer fund from one bank or credit union account to other. The wire transfer is mostly used for international money transfer e.g. sending money from the USA to India, particularly for a large amount of money due to its safety, security and speed advantages because no actual cash is moved in wire transfer transaction.

Friday, February 3, 2017

Top 5 Income Tax Changes and Slab Rates from Budget 2017

The Indian Budget for 2017 has been announced a couple of days back and Finance Minister Mr. Arun Jaitely announced some Income tax reforms, amendments, and relief for personal income tax payers of India in his budget 2017 speech. The most important of them are 5% tax on the lowest slab i.e. 2.5 lakhs to 5.0 lakhs instead of 10%. This change will impact most of the tax payers in India as data provided in the budget, total 3.7 crore people filed income tax returns in 2015-16 and out of those almost 2 crore was in the range of 2.5 lakh to 5 lakh.