Update more information of non-resident account in 2023

This article will answer the question “What is non-resident account?” and
update you on some types of non-resident accounts.

What is a non-resident account?

A non-resident account is a type of account opened in any location in a
country or territory you don’t live in. Those accounts can be also referred
to as an overseas bank account or overseas account.

Basically, you can use this account to hold money/send and receive
payments. It’s possible for you to set up your investment and savings
accounts in several currencies.

A non-resident account permits you to manage and deposit your income in
foreign currencies (such as USD, EUR, AUD, JPY…)

Most non-resident accounts apply some standard features (mobile and online
banking, and a debit card). Some accounts have charges and fees, and you
need to satisfy some eligibility criteria.

Update more information of non-resident account in 2023

Why should you use a non-resident bank account?

In general, a non-resident account can make your life more convenient to
manage your funds while you’re far from your home country.

Also, this account can help you to manage foreign exchange and you can link
the non-resident account to your local account.

For example, if you plan on moving from your home in the UK to another
country to live and work and rent out your UK property while you are
overseas, you need to consider opening a UK non-resident account to get the
rental income and pay commitments in the UK.

Here are some typical reasons to open a non-resident account:

• Live, work or plan on moving to another country or territory.

• Regularly travel among countries for business.

• Own assets (investments or property…) overseas.

• Financially support family members who are living or studying
  abroad.

• Retire abroad and receive a pension in a different currency.

Also, a non-resident account will offer other benefits as follows:

• Easy and secure payment services.

• There is no need to close and reopen your account when moving to
  another country.

• Ability to manage foreign exchange in a convenient way.

• Potential tax-efficient savings and investments.

Types of non-resident accounts in India

In 2022, there were 13.5 million non-resident Indians (NRIs) around the
world. There has been an exponential rise in the number of non-resident
Indians over the years. This led to a high demand for non-resident accounts
in India.

When mentioning types of non-resident accounts, take non-resident accounts
in India as a typical example.

It’s important to be aware of the main distinctions among these accounts.
Commonly, there are 3 types of non-resident accounts available for
non-resident customers.

Non-Resident External (NRE) accounts

Non-Resident Ordinary (NRO) accounts

Foreign Currency Non-Resident (FCNR) accounts

Non-resident external (NRE) accounts

A non-resident can open a NRE account to deposit and hold the foreign
earnings. The is a rupee-denominated account opened in the form of a
current bank or savings accounts. Good news is that the interest you earned
from those accounts is not taxable in India.

Non-resident ordinary (NRO) accounts

Primarily, an NRO account is opened for depositing income earned in India.
They can include rental income, dividends and pension. You can convert your
resident account into an NRO account when your resident status changes to
NRI.

For example, Mr John, an NRI in London (UK), has an apartment in Delhi
which he has rented out to Mr. Raul. To receive rental income from Raul
every month, Mr John has to open an NRO account.

For depositing Indian earnings, no step of currency conversion is involved
although foreign earnings can be deposited in this account.

Foreign currency non-resident (FCNR) accounts

You can open a FCNR account in the form of term deposits in a currency.

Several currencies in which FCNR deposits can be made by NRIs or PIOs,
consists of: Euro (EUR), US Dollars (USD), Japanese Yen (JPY, Great Britain
Pound Sterling (GBP), Australian Dollar (AUD), Canadian Dollar (CAD),
Singapore Dollar (SGD)…

This means earnings of NRIs or PIOs in any of these currencies don’t depend
on the conversion for deposits in an FCNR account.

However, if you gain in any other currencies, the deposit made will be
converted into any RBI prescribed currencies. You can open NRI accounts in
some public and private sector banks in India.

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