The advantages and benefits of opening an NRI account If an individual opens an NRI account, the following advantages and benefits are available for nri services: Remits money overseas It is one of the primary benefits of the NRI account that NRIs can repatriate their income to their dependents in India. Mr. Aayush, for instance, is employed in San Jose, USA, while his father, who is dependent, resides in Mumbai. Every month, he sends USD 2000 to cover his father's daily expenses through his NRO Savings Account. This NRO account has a balance in Indian rupees. Remitting USD 2000 through the NRO Account would cost Rs. 1,50,000 if the exchange rate is 1USD = Rs.75. Provides Income Continuity NRIs can earn income from their assets in India by opening an NRI account. For instance, Ms. Manasi, who resides in London, Great Britain, owns a residential flat in Bengaluru that she leases to Mr. Kishore. The rent income from the lease can be received by Ms. Manasi by having Mr. Kishore deposit it into an NRO account set up at a Bengaluru bank. Facilitates Indian investment The NRI account allows NRIs to invest in Indian investments such as equity, mutual funds, debt instruments, etc. NRI investments in India are facilitated through the Portfolio Investment Scheme (PIS), a scheme introduced by the Reserve Bank of India, through banks and financial institutions. Fluctuations in exchange rates are avoided NRIs do not have to convert their deposits into Indian rupees in FCNR-B accounts. In this way, NRIs are able to minimize the impact of fluctuations in foreign exchange rates on their deposit values. Attractive Returns It is possible for NRIs to earn interest income at attractive rates by investing in NRI accounts, such as NRE FDs or FCNR-B deposits. Since a great deal of time, interest rates have been higher in India than in many western countries. No Tax Liability The Income Tax Act 1961 does not impose any tax on interest income from NREs and FCNRs (B). Loan Facility NRI account holders or third parties may be given loans in India by authorized banks or financial institutions as long as they secure them with the money deposited in their NRI accounts. Generally, the term 'loan' would include all funding mechanisms, whether they are bank loans or not.
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