FCNR and other bank accounts open to an NRI

Out of the different account options available to a non resident Indian

, Non Resident external is the most sought after account. The reason being, it allows for transfer of profits and returns on your mutual fund, shares and debentures held in Indian companies. It is held on a repatriation basis, so that you can transfer the profits abroad. NRE savings type offers a higher interest on your money saved in the bank. NRE type enjoys tax exemption on the income gained through savings account. You are allowed to credit your money in any foreign currency such as EUR, JPY, GBP, USD. Take the money abroad whenever you need money. If you have a nominee to the account, your parents or your spouse nominated can access your account in India. Some may offer you a zero balance account while others have a minimum of 10,000 as balance.

Although, Non resident Ordinary bank account allows a non resident Indian to carry out his banking transactions, and to save money, but it is not on a repatriation basis. The returns on investment cannot be taken abroad. You can deposit your rental income and other income earned in India in these accounts.

Foreign Currency Non-Resident (FCNR) allows you to have financial transaction in five different foreign currencies such as Pound Sterling (GBP), U.S. Dollar (USD), Australian Dollar (AUD), Canadian Dollar (CAD) and Euro. These accounts are used to deposit money in term deposits such as a Certificate of Deposit. These are maintained for a period of one to five years, till its period of maturity.

It allows you to transfer the principal as well as the interest abroad in any foreign currency you wish to have them transferred. You can avail loans outside India, in any foreign currency against FCNR deposits in India. In a nutshell the types of account that any NRI can hold are:

1. Non-Resident Ordinary (NRO)

2. Non-Resident External (NRE)

3. Foreign Currency Non-Resident (FCNR)

FCNR and other bank accounts open to an NRI

By: Kirthy Shetty

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