Settle Your Financial Affairs Before You Settle Abroad

You’ve taken that plunge and decided to move abroad—congratulations, on the beginning of a new chapter in your life! With the many opportunities and experiences that await you, don’t overlook the most important aspect before you leave—your financial affairs. This article gives you a low-down on how you can plan way in advance to make your transition overseas a smooth process. For starters, almost all your financial affairs can broadly be categorized into three segments—Banking, Insurance, and Investments.

Banking

Before moving out of the country, make the necessary amendments that will ensure your money is secure and accessible in the time of need. For instance,if your residential status will eventually change, you must update your bank accounts in India to those designated for non-resident Indians (NRIs).Depending on your requirements, you could choose to either convert your existing savings account into a non-resident ordinary (NRO)account or open a non-resident external (NRE) account.

With an NRO account, you can park any income generated in India, including rent earned on property lease, interest, and dividends. On the other hand, an NRE account will let you remit and park your foreign earnings in Indian financial instruments, in the form of savings, fixed and recurring deposits. You can also transfer funds freely between India and your new home country, and the interest earned is not taxable in India.

Remember to update your correspondence details with your bank and various financial institutions. Also, activate e-mail updates so that you don’t miss out on any communication sent across.

Loans and Credit Cards

Both the NRO and NRE accounts allow you to repay loans. In case you have a debt, switch to an auto payment mode so that payment of monthly installments is not affected in your absence. However, do note that credit card bills can only be paid through an NRO account and not an NRE account.

Furthermore, using a regular Indian credit card abroad is going to be an expensive affair! Instead, applying for a Multi-currency Forex Card may be a good idea! It is one of the safest, most convenient, and cheapest ways to carry money abroad.

Insurance

Regardless of your country of residence, having insurance is always essential. While your health insurance will only be valid in India, it is prudent to continue the policy as it will prove immensely helpful if you plan to visit or move back to India in the future.

In the case of life insurance, you can continue with your existing plan or purchase a new plan after you move. Also, if you own property in India, it is advisable that you continue with your home insurance. Continuing with an existing policy may be possible if you have an endowment plan. In case of a term plan, however, check if your insurer provides the cover in the country you are moving to. If not, it may be a good idea to surrender your plan and purchase a new one overseas. Also remember to set up auto-payment for premiums.

Investments

Before you start your life overseas, think through your long- and short-term investments. Carefully decide which investments you would like to hold and which ones you would rather liquidate. It is always a good idea to add nominee(s) to all your investments. These steps will make money management considerably simpler. You can use services like Axis Direct to conveniently and efficiently manage all your investments even while you are abroad.

If you are a Demat account holder, you will need to convert your resident Demat account to an NRO Demat account and open a new NRE Demat account. You need to open a Portfolio Investment Scheme (PIS) account to invest in shares of Indian companies or trade in the secondary market as an NRI.

Settling money matters before your big move is an important process. Contact your bank’s relationship manager to understand the various services they offer to help you manage your finances in India efficiently while you are abroad.