NRI Bank Accounts: FCNR, NRE & NRO Explained with example - UPSC Notes
NRI Bank Accounts: Imagine Rahul, an Indian citizen, moves to the USA for work. Since he now lives outside India, he is considered an NRI .
Imagine Rahul, an Indian citizen, moves to the USA for work. Since he now lives outside India, he is considered an NRI (Non-Resident Indian) . He wants to maintain some bank accounts in India for different purposes. Rahul still has financial connections with India. He: Earns money in the USA and wants to send some to India. Owns a house in India and earns rent from it. Wants to keep some money in India in US Dollars (instead of Indian Rupees). To manage his money, he learns about the 3 types of accounts that an NRI can open in India: Here are his options: FCNR (Foreign Currency Non-Resident) Account Rahul has some US Dollars (USD) and wants to keep them safe in India without converting them to Indian Rupees. He opens an FCNR account in USD as a fixed deposit . The best part? No tax in India , and he can withdraw both interest and principal freely anywhere in the world . Example: Imagine Rahul deposits $10,000 in an FCNR account . If the bank gives him 4% interest per year, he earns $400 per year . He…