When you move overseas, the change in your status from resident to Non-Resident Indian (NRI) requires several lifestyle shifts. Your banking framework is a major area where you may grapple with challenges.
For instance, you will need to open a safe and secure Non-Resident External (NRE) Savings Account once you become an NRI. Many NRIs consider converting their regular Savings Bank Account in India into an NRE account. Do banking regulations in India allow this conversion? Let’s understand the right way forward.
Conversion from regular savings to NRE Savings Account
You may have been using your resident Savings Bank Account for many years. You are comfortable using this account - whether online transactions with your debit card or money transfers. Also, existing Savings Accounts can be converted to NRO Account and you can still open new NRE account. With a seamless online application process, your NRE account is just a few clicks away.
NRE Savings Account simplified
An NRE Savings Account is a type of savings account which enables you, as an NRI, to store and grow your foreign currency savings in an Indian bank. Every time you deposit the funds in a foreign currency, your bank automatically converts the funds into Indian Rupees.
The conversion applies to the real-time exchange rate. You can then withdraw the cash in Indian rupees. Your NRE Savings Account comes with several advantageous features.
7 Features of an NRE Savings Account
Here’s a snapshot of key features:
Tax exemption
One of the most attractive features of an NRE Savings Account is that they are exempt from taxes. Both the principal amount deposited and the interest earned are exempt from tax. Hence, your NRE account is a strategic mechanism to grow your savings as you earn in a foreign currency.
Seamless repatriation of funds
You can transfer funds from your NRE Savings Account seamlessly to any other NRE, NRO, or foreign account. There are no restrictions on the amount you can transfer at any given time.
Also Read: Difference Between NRE & NRO Account
Earn interest
Your NRE Savings Account also earns interest in accordance with the directives issued by the Reserve Bank of India.
Easy investments
You can leverage your NRE accounts to build your investment portfolio in India, even during your overseas stint. Invest in mutual funds, fixed deposits, Sovereign Gold Bonds, and an existing PPF account, to name a few.
Internet banking
You can manage all your NRE account transactions, including investments and repatriation, via Internet banking, no matter which part of the world you operate it from.
Additional perks
Your NRE Savings Account makes you eligible for personal accident, air accident, and purchase protection. The limits vary based on your account terms and conditions. You can also earn rewards points via the loyalty programme and benefit from a wide range of exclusive shopping deals when in India.
Also Read: Exploring different types of bank accounts in India
Joint accounts
In the case of a joint NRE Savings Account, both account holders Account must be NRIs
The takeaway
As you go from being a resident Indian to an NRI, you will need to make changes in your banking habits. An NRE Savings Account is a useful tool in helping to build your savings. You can either convert your existing Savings Account to NRO Account or you can open a new NRE Account, as per your requirement.
A seamless online application process, a complete digital banking experience, tax-free savings, interest-based returns, a reward programme, and the opportunity to invest are some of the top perks. This is your pathway to growing your savings while earning abroad. Start your journey towards a more secure financial future today with Axis Bank.
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.
