Moving Abroad? Here’s what to Do with Your Savings Account

If you have decided to move abroad in the coming months, you may have your hands full! Figuring out the logistics, planning your accommodation, and packing—the process is indeed stressful. However, during this transition, don’t sideline important matters such as sorting out your finances. After all, once abroad, wouldn’t you much rather spend your time settling in and exploring the new city than being immersed in paperwork?

Well, to make your transition overseas as smooth as possible, there are a few financial arrangements that you need to make before your big move. One of the critical issues that baffle many prospective and new NRIs: What exactly should I do with my savings account ?

First, know that your existing savings bank accounts will not be valid once you become a non-resident Indian. Therefore, you need to re-designate these as NRO or open new NRE and NRO accounts. Let’s understand more about each of these options.

Open a Non-resident Ordinary (NRO) Account

You will need to determine what you wish to do with your existing funds—do you plan to retain them in INR? Also, think about any potential income-generating sources in India after you move abroad. This could be in the form of rental income, interest and dividends on investments, pension, among others. Understanding these aspects will help you chart out a sound financial plan for your future.

You can convert your existing resident savings accounts into an NRO savings account before you leave India. An NRO savings account will allow you to conveniently deposit income generated in India; you can also continue to make EMI and utility payments, and manage ongoing investments through an NRO account. It is a good idea, however, to consolidate multiple bank accounts and then convert them to one or more NRO accounts. This will make management easier for you from another country.

Open a Non-resident External (NRE) Account

As an NRI, you may want to send money to India periodically. Moreover, given that India is emerging as a hotbed for economic activities, many NRIs prefer to park their foreign earnings in Indian financial instruments. For such purposes, opening an NRE savings account is beneficial. The funds held in an NRE account, along with tax free interest, are freely repatriable. Furthermore, Indian banks offer rather attractive rates on fixed deposits on NRE accounts, and the interest earned is not taxable in India.

After duly considering all your personal and professional requirements, you should be in a better position to decide which type of account you should opt for. Both the NRO and NRE savings accounts are easy to open, requiring you to submit a few documents. Axis Bank, for instance, has a dedicated section on its website where you can apply online to open an NRI account.

Need more information? Talk to your bank relationship manager or walk into the nearest branch to better understand all the NRI account benefits and receive expert guidance.