How an NRO Savings Account helps NRIs manage income in India

As an NRI, you might need to access income from your Indian assets from overseas. This could include income from various sources like rent, dividends, and pensions. To access these funds, NRIs may need an NRO Savings Account, as per the Foreign Exchange Management Act (FEMA). An NRO Savings Account allows for the management of Indian earnings and helps in meeting tax and regulatory requirements. An IDFC FIRST Bank NRO Savings Account offers benefits such as competitive interest rates, periodic interest payouts, and digital banking platforms for managing finances.

What is an NRO account?

An NRO (Non-Resident Ordinary) savings account is designed for NRIs to manage income earned in India. It enables NRIs to deposit income earned in India, such as rental income, dividends, pension, or proceeds from the sale of assets.

• Eligibility: Individuals with NRI status as per FEMA (Foreign Exchange Management Act) guidelines are eligible to open an NRO account.
• Key features:
  • Deposits can be made in INR or foreign currency (converted to INR).
  • Withdrawals are permitted in INR.
  • Interest earned is subject to applicable Indian tax laws.

An NRO account can help in managing Indian income while meeting compliance requirements.

Benefits of an NRO savings account

An NRO account offers several advantages for NRIs, particularly with options like IDFC FIRST Bank’s offering:

1. Simplified management of income: It allows for the consolidation of Indian earnings in a single account for easier management.
2. High-interest rates: IDFC FIRST Bank offers competitive interest rates, which may help income grow.
3. Periodic interest payouts: Benefit from interest credits for potential liquidity aiding in financial planning.
4. Tax considerations: While interest income is taxable in India, tax treaties like the Dual Taxation Avoidance Agreement (DTAA) may help reduce the tax burden.
5. Repatriation of funds: IDFC FIRST Bank facilitates the repatriation of funds up to USD 1 million in a financial year, following Government of India guidelines.
6. Comprehensive digital tools: IDFC FIRST Bank’s mobile app and online banking platform enable users to track transactions, access account details, and make payments.

Interest rates and charges

NRO savings accounts typically offer competitive interest rates.

• At IDFC FIRST Bank, you can find competitive interest rates on account balances.
• Interest earned is calculated daily and credited periodically.
• Fees may apply for certain services like fund transfers and remittances.

It is advisable to check the latest rates and charges on the IDFC FIRST Bank’s website.

NRO vs NRE accounts

While both NRO and NRE accounts are for NRIs, they have different purposes:

Depending on your financial goals, individuals can choose one or both accounts.

How to transfer money to an NRO account?

Transferring funds to an NRO account can be done through several methods:

1. Wire transfer: Send money from an overseas account to an NRO account.
2. Foreign currency cheques/drafts: Deposit cheques or drafts, which will be converted into INR.
3. From an Indian account: Transfer money from a resident Savings Account via NEFT, IMPS, cheques, etc., subject to FEMA guidelines.

IDFC FIRST Bank offers remittance services through various channels and exchange rates.

Using an NRO savings account for family needs

An NRO savings account can be used for managing family expenses in India.

• It can be used to pay for education expenses.
• It can also cover medical bills.
• It allows for the automation of utility bill payments.

IDFC FIRST Bank’s digital banking tools can assist in tracking and managing these payments.

Conclusion

An NRO savings account is a tool for NRIs to manage income and expenses in India. It can help consolidate income, may offer competitive interest rates, and facilitates partial repatriation.

IDFC FIRST Bank’s NRO Savings Account provides interest rates, periodic interest payouts, and digital tools for banking. Individuals may explore IDFC FIRST Bank’s NRI offerings for their financial needs.

Note to the reader: This article is part of Hindustan Times's paid consumer connect initiative and is independently created by the brand. Hindustan Times assumes no editorial responsibility for the content, including its accuracy, completeness, or any errors or omissions. Readers are advised to verify all information independently.