What Is the Process of Opening an NRI Account?
5 min read | 5 months ago
Financial planning and investments may seem complicated if you’re an NRI. How
can you manage your finances suitably in India? The answer lies in opening an
NRI account. The popularity of these accounts can be gauged from reports that
indicate how NRI bank accounts in India received inflows of $7.99 in FY23, which was substantially higher than FY22. These figures indicated how more NRI
accounts were opened and also how more such customers were looking to keep
their money back home. If you’re looking to open an NRI account anytime soon,
then here is a guide on the types of accounts, eligibility and documentation, the
NRI account opening process and other benefits.
Eligibility for Opening an NRI Account
So, if we talk about the eligibility to open an NRI account, only NRIs, PIOs, and OCIs can open these accounts. If you want to open an NRI account, then you have to provide proof that you are an NRI, such as a valid passport, visa, work permit, etc.
Types of NRI Accounts
So, if we talk about the eligibility to open an NRI account, only NRIs, PIOs, and OCIs
can open these accounts. If you want to open an NRI account, then you have to
provide proof that you are an NRI, such as a valid passport, visa, work permit, etc.
Types of NRI Accounts
There are mainly two types of NRI accounts: NRE and NRO accounts. Let's take a closer look at what these accounts are.
- NRE Account – A Non-Resident External (NRE) account is a bank account introduced by the bank for non-resident Indians, which allows them to keep their foreign income in India. The account is in Indian rupees, and both the principal and the interest are fully repatriable.
- NRO Account – A Non-Resident Ordinary account is another category of bank account for NRIs, which can be maintained in Indian rupees, and it is meant for managing their income earned in India. The interest earned on the account is repatriable, but the principal is not.
Features of Non-Resident External Accounts
Here are some of the NRI account benefits that you can expect.
- Up to Rs. 1 lakh - 6%
- More than Rs. 1 lakh and less than Rs. 5 lakhs - 7%
- More than Rs. 5 lakhs and less than Rs. 20 lakhs - 7.25%
- More than Rs. 20 lakhs to Rs. 5 crore- 7.50%
- More than Rs. 5 crore - 7.75
Banks like Unity Small Finance Bank also pay the interest on a monthly basis for maximum NRI account benefits
Documents Required to Open an NRI Account:
To open an NRI account, you need to provide the following documents:
- A valid passport
- A valid visa or work permit
- Proof of NRI status
- Proof of overseas address & Local address
- Proof of Employment or Business
- A passport-sized photograph
- Copy of PAN (Not mandatory
Are these documents truly important? Well, yes. These documents are required to verify your identity, NRI status, and overseas address. They are also required to comply with the Know Your Customer (KYC) norms of the Reserve Bank of India (RBI).
Process of Opening an NRI Account:
The process of opening an NRI account is simple and straightforward. You can either apply online or visit a bank branch in India or abroad. Here are the steps involved in opening an NRI account:
- Step 1
- Choose the type of NRI account you want to open
- Step 2
- Select the bank where you want to open the account.
- Step 3
- Download the account opening form from the bank's website or collect it from the bank branch.
- Step 4
- : Fill in the necessary details in the account opening form and attach the required documents.
- Step 5
- Submit the completed form and documents to the bank.
- Step 6
- The bank will verify your documents and process your application
- Step 7
- The interest rates for NRE accounts are similar to what you get from Domestic deposits. The interest earned on NRE accounts is tax-free in India.
- Step 7
- Once your application is approved, the bank will activate your NRI account.
Common challenges faced while opening an NRI account include lack of proper documentation, non-compliance with KYC norms, and difficulty in finding a bank that offers NRI banking services. However, these challenges can be overcome by checking the KYC guidelines and gathering your documents in advance, along with choosing banks like Unity Small Finance Bank that have dedicated solutions for NRIs.
Conclusion
Opening an NRI account is important if you want to save and invest in India. The NRI account opening process requires you to meet the eligibility criteria, provide the necessary documents, and follow the process outlined by your bank. With these accounts, you can enjoy tax benefits, get easy repatriation of funds, and conveniently manage your money from abroad.
FAQs
1. What documents are required to open an NRI account?
A passport, visa, PAN card, and proof of overseas address are some of the documents required.
2. Can an NRI account be opened online?
Yes, most banks offer the facility to open NRI accounts online. The process is quick and hassle-free.
3. Can an NRI account be jointly held with a resident Indian?
NRI accounts can be held Jointly with Non Residents as well as Resident Indians
About Unity Small Finance Bank
Unity Small Finance Bank is committed to making banking simpler and more accessible for everyone. Our services include Savings Account, NRI account, Current Account, Fixed Deposits, and Personal Loans offering flexible tenures and attractive interest rates. We also offer financing options like MSME Loans and Microfinance to support businesses and underserved communities. Learn more about Unity Small Finance Bank here.
