When you become an NRI
One cannot open a savings bank account, have a fixed deposit or a public provident fund. Certified financial planner Sandeep Shanbhag recalls a case where a
non-resident Indian (NRI) wanted to continue with his resident savings
account because he received interest income on it. By law, NRIs are not
allowed to hold regular savings accounts in India.
Shanbhag advised him to either closed it or change to a non-resident
external (NRE) or non-resident ordinary account (NRO) account. The
interest income on the balance in NRE and NRO accounts are at par with a
savings bank account, currently at four per cent. The onus of changing
these accounts from regular ones to NRE/NRO accounts lies with you.
He/she must intimate the bank.
Jayant Pai, vice-president, Parag Parikh Financial Advisory Services,
explains: “Both these accounts are rupee-denominated. They differ in
terms of the amount that can be repatriated and how freely it can be
done.”
Source: Business Standard
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