Investing your funds for better benefits is an important decision. This is no different for NRIs. However, since the requirement and economic conditions of the NRI is different from the local residents, the financial requirements will also be different. This is when the NRI accounts can be used.
Amongst all the different options in the NRI account, the NRE account is a favourable choice for many. By understanding the different features of this account, one can take the necessary steps to take advantage of these features to ones financial gain. Given below are the details of the features of this account:
The Non Resident External rupee account can hold INR funds only. This makes it a great benefit for those who want to invest only the local currency for any local financial requirements.
No tax is levied on the interest that is earned on the deposit in this account. Therefore, depending on the NRE interest rates, one can easily earn more, and invest more without any tax deductions.
The NRE account is best used to repatriate funds back home. Since it hold the local currency, there will be minimum issue with conversion rates and procedures.
Plenty individuals who hold an Indian status can have access to this account in the form of a joint account holders. In other words, other NRIs or PIOs also known as person of Indian origin can be joint account holders for this account. They can also hold the power of attorney for this account. The Power of attorney is limited to perform few basic functions such as withdrawing money and remitting money to the account holder himself.
Funds in this account can be deposited by the account holder himself when visiting the home country. He can also make a foreign transfer from abroad, through the request of the banking institute. The funds may also be transferred from one NRE or FCNR account from one banking institute to another.
The account holder can also take a loan against this account. Using the funds in this account as collateral, the NRI can a loan of foreign currency on informing the banking institute. Depending on the NRE interest rates and the account holders profile, the appropriate loan amount would be provided.
Any transaction that has to be made through this account, must be informed and recorded at the RBI. A value of 1 million USD can be sent in a single financial year, as per the demand of the RBI. In order to facilitate this transfer, certain documents such as the Form A4 must be filled, along with specific instructions on which mode or form of currency the funds must be transferred.
Apart from these features, there are plenty of others, which can benefit you as an account holder. However, when opting for this account, you must first approach your bank for thorough details to know how you can benefit from it.
Author Bio :- Neha Sharma is a finance student who loves to write during her spare time. She has considerable information about the NRE interest rates . Through her work, she has provided valuable information through a short glance at the features of the NRE account.