Benefits of NRE Account

NRI or Non-Resident Indians do require an account in India to keep their funds. NRIs are not allowed to maintain a simple savings or current or fixed deposit account in India towards the income earned in foreign country. At such time, they need to open an NRI account.

There are mainly 4 kinds of NRI accounts that can be opened in India by the NRIs which are NRE account, NRO account, FCNR account and RFC account which are opened by the NRIs to serve different purposes. Check out the difference between NRE and NRO Account.

If you want to keep all your foreign currency earnings in Indian denomination, an NRE Account is the best suited option for you.

What is an NRE Account?

An NRE Account (Non-Resident External Account) is an account where your foreign currency deposits are converted into Indian Rupees (INR) at the prevailing foreign exchange rates at the time of deposit itself. An NRE account is an Indian rupee-denominated account. In simple words, in an NRE account, you deposit money in any foreign denomination say US Dollars and withdraw it in Indian Rupees (INR). NRE account is used to transfer foreign earnings to India.

Types of NRE Accounts

There are various types of NRE Accounts:

• NRE Savings
• NRE Current
• NRE Recurring
• NRE Fixed Deposit Accounts

Opening an NRE account is the best way to keep your foreign savings in India in INR. As such, NRE account has some excellent benefits which are not available in any other savings or current account. Hence, before opening an NRE account online, you must be aware of such benefits:

12 Benefits of NRE Account

 1  |  Tax Free in India

NRE accounts are fully exempt from tax in the hands of the account holder which means that the principal amount as well as the interest earned in NRE account is free from tax, no matter the interest is earned on NRE Savings or NRE Fixed Deposit Accounts.

Further, it is to be noted that the deposits kept in this account and interest earned are fully exempt from wealth tax as well as gifts to close relatives in India are also free of gift tax.

 2  |  Freely Repatriable

You are allowed to repatriate the principal and the interest amount anytime freely without any restrictions. Further, you are also free to transfer your funds from an NRE account to a foreign account.

 3  |  NRE Account: Investment Vehicle

NRE Accounts are also opened to be used for any personal purpose such as for making investment in India or for carrying on business activities in India

 4  |  Option to Open NRE Account Online

NRE Account can be opened online through simple process from anywhere

 5  |  Easy Transfer to Other Accounts

You are allowed to transfer funds from your NRE account to any other NRO accounts or to any savings or current account.

 6  |  Joint Holding is Possible

You can open your NRE account with other NRIs or Resident Indian (who is a close relative as per Companies Act 2013). Please note that in case Resident Indian has been added as Joint holder in your NRE account, then the mode of operation will be 'Former or Survivor'.

 7  |  Access NRE Account from Around the World

You can access and track your NRE account through online banking facility offered by banks. This facility remains open 24x7, all 365 days in the year.

 8  |  International Debit Card

When you open NRE account, banks provide you with an International Debit Card which you can access for international spending worldwide.

 9  |  Pay Bills for Your Family in India

You can use your NRE account for making bill payments of services availed by your family in India. You can pay utility bills, such as electricity, telephone and mobile bills, of your family in India through online banking.

 10  |  Nomination Availability

Nomination facility is available on the NRE account.

 11  |  Credits against NRE Account

As an NRE account holder, you can avail loans or overdrafts against security of your NRE FD account.

 12  |  Account Convertibility

The NRE account can easily be converted into a regular resident account whenever the NRI account holder returns to India and becomes resident.

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