Top Benefits of Opening an NRE account| North Loop Official Blog
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09 Jul 2020

Top Benefits of Opening an NRE account

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If you are an NRI, sending money to your NRE account can be beneficial to you in many ways. The Foreign Exchange Management Act (FEMA) does not specify any limits or restrictions on most remittances sent to India by NRIs, making it easy for you to send any amount of money to India. However, some of you might not be aware of the numerous benefits of opening an NRE account to repatriate your funds to India. That is the reason we have listed out some of the most important benefits available to you.

Wondering what is the benefit of nre account? Before we begin, let us understand what an NRE account is and how the choice of your bank in which you create the account plays a crucial role in determining the extent of benefits you receive:

An NRE account is a savings account that can be opened by you if you are a Non-Resident Indian (NRI). It is meant to repatriate funds that are generated overseas to India. Your foreign earnings are converted into INR and parked in your NRE account. Most banks allow you to create an NRE account but you can weigh your choices based on a variety of factors like – the minimum balance required to be maintained in your NRE account, the interest rate offered on the funds in your account and the ease of access to your NRE account while you are abroad.

Benefits of opening an NRE account –

  • Repatriation Advantages: NRE account allows a smooth movement of funds as it allows you to repatriate all funds including interest earned at any point of time.
  • Tax Benefits: An NRE account is tax-free. There is no income tax, wealth tax or gift tax for any amount of money transferred to your NRE account. As long as you pay taxes on the income you are earning abroad, money transferred into India is not taxable. Interest earned on both the savings NRE account as well as the fixed deposit NRE account is also tax-free. These tax benefits give you more economic control over your financial wealth and also ease the process of transferring funds to India without any tax worries.
  • Minimum Balance Requirement: If you choose the right bank to create your NRE account, you don’t need to maintain a high balance in your account. All banks have different minimum balance requirements and most of them require Rs.10,000 to be maintained as a minimum balance. However, you can sign up with North Loop to create an NRE account that does not have any minimum balance requirement. It also eliminates all fees like monthly fees or transfer fees.
  • FCNR Deposit: In addition to creating NRE savings and fixed deposit accounts, you also get an option to book an FCNR (Foreign Currency Non-Resident) deposit to earn high yields in foreign currency. Both the principal amount and interest of such deposits can be fully repatriated and the interest earned is tax-free in India. You can use FCNR Deposits to avoid foreign exchange currency risk, ensuring high and guaranteed returns. Deposits in this account can be made in any of the major currencies like the US Dollar, UK Pound, Canadian Dollar, Deutsche Mark, Japanese Yen and Euro.
  • Convenience benefits: One more advantage of an NRE account is convenience. Most banks allow you to open NRI accounts without visiting the branch in India which is a big advantage. However, they do require you to fill a form online, take a printout, attach the self-attested copy of the required documents and courier it to the bank in India. But with a North Loop NRE account, you can sign up online within minutes by using the App and the account gets issued within 24 hours. Moreover, there is no restriction to transfer your money from the NRE account back to your foreign account.
  • Mandate Facility: An NRE account allows you to mandate a resident Indian for managing your account in your absence. You can issue a mandate or Letter of Authority that enables them to operate the NRE account on your behalf. You can also open a joint NRE account but only with another NRI or a resident Indian relative.
  • Easy Fund Withdrawal: NRE accounts allow you to easily withdraw your funds using your international debit card and this becomes an added advantage for all those of you living abroad.
  • Investment Facility: If you link your NRE account with an investment or trading account, you can invest money in Indian investment instruments and this can help you to utilise your idle savings and increase your wealth.

To open an NRE account with North Loop, click here to sign up.
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This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended be advice. You must obtain professional advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax, investment or other professional advice from North Loop or its affiliates. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date. All opinions expressed do not reflect the views of North Loop nor are endorsed by North Loop.