Every year a large number of the population is moving abroad for educational and employment reasons. As an NRI, you need to make your financial decisions wisely. Because it is not easy to maintain two different accounts in two different countries. To get the flexibility of depositing funds in foreign currency and withdrawing in your home currency, one must opt for an NRE account. Just like any other savings, the terms and benefits of an NRE account vary from bank to bank. Therefore, you must consider some things before you discover the best NRE savings account for you
The easiest way to discover the best NRE account for you
NRE account is the wisest option for an NRI who wants to transfer his overseas earned money back to India. However, since you will be depositing your hard-earned money, you must choose the best NRE savings account. Here’s how you can choose the best NRE account:
1. Do proper research
Unlike an NRO account, you are not converting your existing account, so you can look for a different bank and choose the one, which suits your requirements the best. Your nearest bank may seem the best but think again, if it is the best place to park your overseas earned money when the interest rate rises.
Financial institutions or banks offer different interest rates for a normal savings account. Thus, the banks tend to offer different interest rates for NRE accounts as well. Due to this reason, you must compare the terms and conditions offered by the banks before settling for one.
2. Look for local banks
If you prefer to visit the branch yourself during emergencies, then you should consider a local bank that has a branch in India. Also, consider going to the banks that have ATM facilities and free transactions so that you can easily withdraw money.
3. Opt for online banking
You are likely to find a bank that is closest to your house as well as has a branch in India. Therefore, it would be best if you look online. Because online, you can check several options and compare their terms and conditions. If you opt for an online bank, then your documentation process will be done online. Hence, you won’t have to travel anywhere for opening an NRE account.
4. Avoid switching
There is a trend among people that they keep switching if any bank offers exciting interest rates. It is not advised to do so. Because some banks provide exciting offers to grab attention, but later they lower the interest rates. Banks can reduce and increase the interest rates on an NRE account. Hence, doing proper homework is a must before choosing the best NRE account for you.
5. Read the terms and conditions
Two banks never offer the same terms and conditions. While opening an NRE savings account, you always need to keep a minimal amount for earning interest. Otherwise, you may earn lower interest, or you may be charged with a service fee if you don’t have a minimum balance. These terms may vary from bank to bank. So, you must read the discourse before creating an NRE account.
6. Keep your funds liquid
If you choose to opt for an NRE deposit, then your money is locked with a fixed interest and for a fixed tenure. When the market rises, then you won’t get higher interest rates. But if you choose an NRE savings account, then your interest rate depends on market conditions.
Income and interest earned through an NRE account are exempted from tax according to the Indian tax laws. Thus, you must keep that in mind before transferring funds in NRO account. Because an NRO account is not tax exempted.
8. Easy application process
Choose a bank or financial institution that offers the convenience of online application. Some banks provide a tracking id after your application is submitted. You should note that tracking id because it may help you to track the account application status. In case, you cannot submit documents in-person then check which bank provides you with the option to post the documents instead of visiting the branch.
Whether you are making an NRE account or any other account, it is mandatory to do proper research before you choose a bank. Some banks may offer better interest rates, but some banks may provide feasibility and better service. Therefore, you should think about what your requirements and which bank are suits your needs.