Everything to Know About NRE Accounts

 NRE (Non-Resident External) account is required for NRI (Non-Resident Indian) to manage their financial commitments in India. The account allows NRIs to save their foreign currency earnings in India. It is a rupee-denominated bank account that only NRIs can open in India to deposit money earned outside India so they can easily handle investments, family expenses, and utility bills. The account can be a current account, saving account, fixed deposit account, or recurring deposits (RD). One can operate their NRI accounts from anywhere around the world, using internet banking facilities. In addition, the banks provide international debit cards, allowing NRIs to transact and withdraw money with ease. Here is everything you should know about NRE accounts.

best nre account interest rates


Eligibility Criteria for An NRE accounts 

The following are the eligibility criteria for opening an NRE account in India. 

  • Indians who are Mariners or working on foreign-registered airlines and oil rigs

  • Indian citizens who are living abroad for studies, employment, or business 

  • PIO (Person of Indian Origin) or Overseas Citizen of India 

  • Spouse of an Indian citizen or spouse of PIO

  • The applicant has held an Indian passport at any point in time

Overview on the Need to Have an NRE Account

An NRE account is used to save or keep track of income generated outside India. As per the guidelines of FEMA (the Foreign Exchange Management Act), a Non-Resident Indian cannot open or use a regular saving account in India. So, NRIs who wish to manage finance in India need to have an NRE account. It will help NRIs to save the money earned outside India in Indian rupees. Apart from this, NRE accounts allow people to freely repatriate their income in their origin country, which is impossible without having an NRE account. Also, an authorized family member of the account holder in India can access the money available in the account, making it a convenient and great option for NRIs having their family back in India. NRE accounts also allow NRIs to make investments in India. 

Advantages of NRE Accounts 

  • The key use of the NRE account is to save funds transferred from an account in a foreign country.

  • NRE account helps in a hassle-free movement of funds as it allows users to repatriate all the money, including the interest rate earned at any point in time.

  • These bank accounts can be opened jointly with another NRI.

  • NRE bank accounts can be used for both business and personal purposes. NRIs can also invest in India, such as in mutual funds.

  • An NRE account is tax-free, which means the interest availed from funds in the Non-Resident External account is not taxable in India. The tax advantages will provide you better control over your finance and ease the procedure of transferring money to India without any concerns of taxation. 

  • The availability of the international debit card allows NRIs to withdraw money from this account at any time. 

While many reputed banks allow NRIs to open an NRE account in India, yet they need to make the right choice based on several factors like best nre account interest rates, minimum balance required to maintain in the account and ease of access while the person is in abroad. However, if the NRI returns to India, they need to change the NRE account into a resident account.

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