Question: What Is The Difference Between NRE And NRI Account?

Is NRE account mandatory for NRI?

As per the Foreign Exchange Management Act (FEMA), an NRI cannot have a savings account in their name in any banks in the country.

It is mandatory for NRIs to get their accounts converted to either an NRE or an NRO account as their residential status changes..

How long can you keep money in NRE?

If you are returning after being NRI for 5 continuous years or less, you become a resident (ROR) immediately (as per Income Tax Act). If you are returning to India after being NRI for 6 continuous years, you can become RNOR for one year. Subsequently, you become ROR.

Do NRI accounts need to pay tax?

If your status is ‘NRI,’ your income which is earned or accrued in India is taxable in India. … These incomes are taxable for an NRI. Income which is earned outside India is not taxable in India. Interest earned on an NRE account and FCNR account is tax-free.

What is the benefit of NRI account?

Interest earned on FCNR deposits are also tax-free in India. Convenience benefits: One more advantage of NRE and NRO Accounts is convenience. Opening an NRI Account is easy. Most banks allow you to open NRI accounts without visiting the branch in India.

How can I maintain my NRI status?

Tax liability India had amended the NRI status eligibility rules by reducing the minimum period of stay in India from 182 to 120 days for qualifying to be a resident; if the aggregate stay in the preceding four years exceeds 365 days and the aggregate taxable income exceeds INR1.

Is NRI account safe?

Safety of NRE Deposits Since a lot of large PSU and private banks offer these deposits, it is hard to see a risk of default. Bank failures are rare in India, and to that extent the deposits are quite safe from default and even the interest payment is safe unless something really extra ordinary happens.

Who is eligible for NRI account?

An individual holding a Foreign passport (other than Pakistani and Bangladeshi) who: Has held an Indian passport at any point of time. Parent or their grandparent was Citizen of India by virtue of the Constitution of India or India Citizen Act 1955.

Can we deposit Indian rupees in NRE account?

Funds originating from a foreign country (foreign currency) can be deposited in both NRE and NRO accounts. However, funds originating in India i.e. in Indian Rupees or INR can be deposited only in NRO Accounts and not an NRE Account.

Can I transfer money from NRE account to savings account?

Yes, its easy to transfer from a NRE account to a Indian domestic savings account. Just add the payee as NEFT or RTGS payee and initiate the transfer.

Can I transfer from NRO to NRE?

However, RBI has now permitted transfer from NRO account to NRE account subject to the submission of required documents and subject to total amount of funds transferred to NRE account and/or repatriated abroad through NRO account during this financial year is within the limit of USD One million.

Which account is better NRE or NRI?

You should opt for NRE Accounts if you want to hold or maintain your overseas earnings in Indian currency. NRE Accounts are also suitable if you wish to keep your savings liquid. You should opt for NRO Accounts if you want to save your earnings from India in Indian currency itself.

Can I have 2 NRE accounts?

In short, sure, you can open more than one NRI account with the exclusive bank in India.

Which bank is best for NRI account?

Best NRE FD RatesName of the BankTenureStandard Chartered Bank5.40%5.50%YES Bank6.75%6.50%HDFC BANK4.90%5.15%ICICI BANK4.90%5.15%16 more rows•Apr 9, 2020

Is NRI account necessary?

1. Why do we have NRE & NRO Accounts? As per the Foreign Exchange Management Act (FEMA) guidelines, an NRI cannot have a savings account in his or her name in India. You must convert all your savings (money earned abroad) to a Non-Resident External Account (NRE) or Non-Resident Ordinary (NRO) account.