10 Points You Must Know about NRI Bank Accounts
There is three types of Rupee account for the NRI people. Those are Non-Resident External(NRE) ,Non-Resident Ordinary(NRO) and Non-resident (Non-repatriable) Rupee Deposit accounts (NRNR) accounts.
If you are leaving outside India, you must inform your bank about the NRI status. It is not legal to have the savings bank account in India, while you are outside India. They will change your savings bank account status to Non-Resident Ordinary(NRO) account.
NRE accounts must be opened by the account holder itself, not by the power of attorney holder in India. Resident Power of Attorney holder can operate on the NRE accounts. But only for local payments to be made on behalf of the account holder.
Funds deposited in the NRE account can be freely used outisde India. But, Funds in the NRO accounts cen be used only in India.
In the case of NRE accounts, the interest rates for deposits up to one year should not exceed Bank Rate minus 2 percentage points. Interest rates on NRO accounts are fixed as in the case of domestic deposits.
It is possible to get the loans and overdraft against your NRE/NRO accounts.
It is possible to transfer money between two NRE accounts.
Remittances made for credit to rupee accounts (i.e. NRE/NRO/NRNR accounts) maintained by NRIs are converted at market rate.
Banks have been advised to re designate such accounts as resident accounts on return of the account holder to India.
Interest accrued on NRE accounts are not taxable. where as interest on NRO accounts are taxable
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