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Indian citizens and Persons of Indian Origin living and employed outside of India for more than 182 days a year are classed as Non-Resident Indians (NRIs). If you're an NRI earning an income in a different currency, you can maintain foreign currency or rupee accounts in India.
It can be challenging to manage your finances while living overseas. Because of this, most banks offer NRI accounts. These will enable you to take care of your money in India from wherever you are in the world.
Depending on your needs, you may want to open one of the following accounts:
You should inform your bank as soon as you obtain NRI status – Non-Resident Indians cannot operate a regular savings account in India. A Person of Indian Origin (PIO) is permitted to open an NRI account with proof of Indian origin or an overseas visa. Your bank can help you either close down or convert your regular savings account to an NRO account, or open a new NRI account. Failure to do so within a reasonable amount of time can result in penalties.
Let's look at the different types of accounts for non-residents Indians:
This account is used by NRIs to deposit their overseas earnings. NRE accounts are held in Indian rupees and can be funded with overseas remittances or transfers from other NRE accounts held in India. The amount deposited in NRE accounts can be freely transferred outside India without any limits. The interest earned is also tax-exempt, provided the account holder either:
Like NRE accounts, NRO accounts are also opened in Indian rupees. But unlike NRE accounts, NRO account holders can receive money from investments or income sources within India in Indian rupees.
Rent income, dividends, interest and pensions are just some of the funds that require a bank account for deposit.
The balance in NRO accounts is not freely repatriable. Funds can be transferred outside India only within specified limits under the FEMA (Foreign Exchange Management Act) Regulations. Interest earned on the NRO account is liable for taxation in India as per the Indian income tax laws.
A mariner's account is specially designed with the needs of seafarers in mind. Account holders can add their family members as power of attorney to the account to manage the account and finances. They can also enjoy features such as higher transaction limits on their debit card, preferential foreign exchange rates, zero charges for ATM usage abroad (only for HSBC Premier customers) and many more.
This is a fixed deposit account denominated in foreign currencies, such as the US dollar, Canadian dollar, euro, Japanese yen and pound sterling. FCNR accounts, like NRE accounts, are freely repatriable and tax free in India. It’s not possible to deposit funds generated in India into an FCNR account.
This account might be good for you if you want to maintain your overseas savings, NRE or FCNR account balances in foreign currency even after you return to India. These funds can be converted to rupees later when the exchange is favourable.
NRI accounts are only available to non-resident Indians and Persons of Indian Origin. This includes spouses of Indian citizens and any individual whose parents or grandparents were resident in undivided India.
If you have your documents ready, you can open an NRI sole, joint or minor Personal Banking account online in just a few steps. You may be asked to provide:
There may be other requirements, depending on the account you wish to open. See what you'll need to open an HSBC Premier account.
We've outlined 5 steps to opening an NRI account through HSBC:
You can now use your NRI bank account to make transfers within India. When using NRO accounts, there may be some restrictions for transfers outside India.
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Note: The information provided in this article is for informational purposes only. You may consult professionals for specific guidance for the applicable Income Tax rules and FEMA Regulations, as these are subject to changes.
Disclaimer: This publication has been issued by The Hongkong and Shanghai Banking Corporation Limited (HSBC), India, Incorporated in Hong Kong SAR with limited liability, for the information of its customers only. This publication does not constitute investment advice or an offer to sell, or a solicitation of an offer to purchase or subscribe to any product / investment. The information herein is derived from sources believed to be reliable and the concerned Information Provider(s) have duly authorized HSBC to use such information provided by them. Whilst every care has been taken in compiling the information, HSBC and the concerned Information Provider(s) do not guarantee, or make any representation or warranty and accept no responsibility or liability as to its accuracy or completeness and shall not be liable for damages arising out of any person's reliance upon this information or any action taken or not taken as a result of any material contained in the publication. Expressions of opinion are those of HSBC and the Information Provider(s) only and are subject to change without notice. HSBC has not independently verified any information provided by the Information Provider(s) or that has been derived from the sources believed to be reliable by HSBC. Opinions expressed herein do not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this publication. This document is for circulation in India only. No part of this publication may be reproduced or stored in a retrieval system without the prior written permission of HSBC. Any liability is accordingly expressly disclaimed by HSBC, its officers, directors and employees.
