If a person is a Non-Resident Indian (NRI), he can open two kinds of account in India – a non-resident rupee accounts (NRE), and non-resident ordinary rupee accounts (NRO).
1- NRE A/C ( Non Residence External Account)
In this account rupee denominations can be maintained. The account can be opened in the names of two or more non-resident individuals provided all the account holders are persons of Indian nationality or origin. Amount held in the NRE account are freely repatriable and you cannot send money by any other means except as remittance from abroad or transfer from another NRE account. NRE account may be in the form of savings, current, recurring or fixed deposit accounts. Such accounts can be opened only by the non-resident himself and not through the holder of the power of attorney. Taxation Accrued interest income and balances held in NRE accounts are exempt from Income tax and Wealth tax, respectively Currency Account holder is exposed to the fluctuations in the value of INR. Interest rates Banks are free to determine the interest rates of saving’s and term deposits of maturity of one year and above. Interest rates offered by banks on NRE deposits cannot be higher than those offered by them on comparable domestic rupee deposits.
2- NRO A/C( Non Residence Ordinery Account)
NRO accounts may be opened or maintained also in the form of rupee denomination could be in the form of current, savings, recurring or fixed deposit accounts. The account can be held jointly by residents. You can transfer money into an NRO account from any account – even other individuals residing in india can transfer money into an NRI’s NRO account. Repatriation Not repatriable except for the following:
i) current income
ii) up to USD 1 (one) million per financial year (April-March), for any bonafide purpose, out of the balances in the account, e.g., sale proceeds of assets in India acquired by way of purchase/ inheritance / legacy inclusive of assets acquired out of settlement subject to certain conditions. Currency Account holder is exposed to the fluctuations, in the value of INR to the extent of interest amount. Interest rates Banks are free to determine their interest rates on savings deposits under Ordinary Non-Resident (NRO) Accounts.
Account Opening Process
Now a days NRI account opening process is very Simple, Most of the banks offers online Account opening felicity, Federal Bank, HDFC bank, ICICI Bank are some example, You can simply enter your personal and legal details, (You can also download an Account opening Application form from banks website, Fill and Sign). Once it completed, take a print-out and duly sign it and sent to your branch with required documents. Once they successfully processed the application, you will get Cheque book and ATM Card to your Saudi Address by post.
Here is the mandatory documents required for NRI Account Opening
- Copy of Residence ID Card (Iqama) or (Muqeem)
- Passport 1st and Last page Copies (As address proof and ID proof)
- Visa Copy (Visa Stamped page in Passport)
In Some Cases Banks may ask additional Documents like Salary Certificate, Overseas Address Proof. etc.