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All You Need to Know About NRI Demat Account
All You Need to Know About NRI Demat Account
The Indian financial market is one of the most sought after markets when it comes to profit against risk. Millions of NRIs seeking to create wealth, look forward to participating in the country’s growth story through their investments. As an avid investor anybody looking at options to grow their wealth cannot simply do so by ignoring the Indian investment markets.
What is a Demat Account?
Demat – DeMaterialized Account works exactly like a bank account where financial securities like stocks, bonds, mutual funds etc. can be stored in electronic form. An NRI Demat account is an account opened by an NRI (Non-resident Indian) or PIO (Person of Indian Origin).
An NRI can trade in Indian equities only by opening an NRI Demat account. This Demat account he or she can open by following certain rules and regulations laid down by FEMA (Foreign Exchange Management Act). These NRI Demat accounts can either be Repatriable or Non-Repatriable Demat accounts as per the wish of the account holder.
NRE and NRO Demat Accounts
An NRE Demat Account means a Demat account linked to an NRI’s NRE savings account. An NRE saving account is opened by an NRI to park his income earned overseas in India in Indian currency. Money parked in the NRE savings account is fully repatriable i.e. all the money in the account can be transferred abroad. Thus, a Demat account linked to the NRE savings account is also called Repatriable Demat Account.
An NRO Demat Account means a Demat account linked to an NRI’s NRO savings account. An NRO savings account is opened by an NRI to park his income earned within India. Not all money parked in the NRO savings account can be transferred abroad which makes the NRO savings account a Non-repatriable account. Thus, a Demat account linked to the NRO savings account is also called Non-Repatriable Demat Account.
Choose your Investment Options
NRIs can invest in IPOs on both repatriable basis using funds in the NRE repatriable Demat account as well as a non-repatriable basis using funds in the NRO repatriable Demat account. However, for an NRI to invest in the secondary markets, they need to seek approval from RBI known as PIS (Portfolio Investment Scheme). This is mandatory because all transactions undertaken through the NRI savings account need to be reported to the RBI.
NRI can also invest in mutual funds, convertible debentures, ETFs and much more.
An NRI Demat account can be opened online from the comfort of an NRI’s residence or offline by visiting the bank while an NRI is in the country. An Indian Power-of-Attorney holder cannot open or operate any NRI’s Demat account on his behalf.
Features of Demat Account for NRI
- An NRI Demat account can be operated by an NRI from any part of the world. Any transaction hence done by the account holder reflects immediately in the Demat account.
- Reduced physical documentation and Online Demat account opening processe for NRIs have made procuring a Demat account quick and easy.
- Digitization of NRI Demat accounts has led to accurate and efficient transactions.
- Online processes have helped banks overcome many limitations like the risk of forgery, loss of physical documents etc. which otherwise could have posed major issues considering the distance between the bank and the NRI account holder.
- An NRI Demat account can be opened with a minimum holding of one share.
- NRI Demat account can be opened by a single NRI or jointly with another person.
- Your NRI savings account is credited directly by any deposits of dividends.
- An NRI can invest in equity, convertible debentures, NCDs, mutual funds, ETFs, derivatives etc.
What are you waiting for? Open your NRI saving account today, link it with a Demat account and grow your wealth multi-folds. Keeping all this information in mind while you open your NRI Demat account will surely help you maximize the benefits you can reap from your country. SBM Bank India’s personalised banking is happy to support you in case of any assistance that you may require. Also, visit SBM Bank India to know more about our NRI saving accounts.
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How do Home Loans and Loans Against Property (LAPs) differ?
Individuals require loans for multiple purposes but end up getting confused between the options. Similar confusion arises when buyers use the terms NRI Housing Loan and NRI Loan Against Property (LAP) interchangeably, when in fact, both are completely different.
An NRI Housing Loan is a high-value loan, taken to facilitate the purchase or construction of a new home. Whereas, NRI Loan Against Property is taken by keeping an already owned/existing property as security. This loan might be used later for a variety of purposes. Now let’s see how both of these loans differ.
What is an NRI Housing Loan?
Whether you want to purchase a ready-to-move-in house, land to build your house, or a property under construction, the loan you would take is an NRI Housing Loan. Banks and housing finance companies offer such loans and they are very secure. Although the buyer is needed to pay a down payment, and later he can repay the loan amount via monthly EMIs.
What is an NRI Loan Against Property (LAP)?
LAP and housing loans have one thing in common, that is, both are secured. This is why they both are taken to be synonyms of each other.
However, a LAP is essentially a mortgage loan. The borrower can pledge his existing, self-owned property for a decided amount of money which equals a definite percent of the market value of the property that he owns. So he is required to handover the documents of that property to the lender until he repays the loan in EMIs.
How NRI Housing Loans Differs From NRI Loan Against Property (LAP)
Interest Rate: The NRI Home Loan Interest Rates are lower than NRI LAP Interest Rates. This is because of the Government of India’s (GOI) “affordable housing for all” initiative which focuses on making housing facilities affordable for every citizen of India. Also, the chances of defaulting on mortgage loans are comparatively higher than regular home loans. Thus, it minimized the margin requirement of a home loan.
Purpose: The NRI Housing Loans are typically applied to purchase a house, a plot, or a property under construction. Whereas, an NRI LAP allows the individual to mortgage his existing property in exchange for funds required for various reasons (personal or professional).
Loan to Value Ratio: Certain perks come with both loans. With NRI Housing Loans, you can get finance up to 90% of the value of your property. And for NRI Loan Against Property, you can get a maximum of 60% of the property value.
Tenure of the Loan: Yet another difference between home loans and LAPs is that the former is provided for longer tenures of 20 to 30 years, whereas the latter comes with a tenure of 15 years maximum.
Tax Exemption: LAP doesn’t let you avail any tax exemption, but home loans come with various provisions for the same as per Sec 80C and under Sec 24 of the Income Tax Act.
Hence, you might be able to understand now that both the loans are related to property but still are very different.
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Rules to Follow While Taking an NRI Loan Against Property
Financial setbacks come unexpectedly and end up delaying our plans. And it is less probable that people have the funds ready to keep their life on track. Hence, NRI Loan Against Property comes to the rescue where you can keep your property as collateral and avail the funds you need. Also called mortgage loans, LAP is a secured loan and gets accredited in brief times, these are taken into consideration as one of all the most dependable methods.
However, there are certain rules you need to follow while availing of an NRI Loan Against Property:
1. Calculate your loan amount as per your financial capability
The borrowers are advised to calculate their repayment capacity and not a larger amount. This can be done by calculation of the EMIs on the loan amount. However, many financial organizations provide 50% to 90% of the property value as the final LAP amount but your NRI Loan Against Property shouldn’t exceed 65% of your net income.
2. Go for a shorter loan repayment tenure
SBM Bank provides NRI Loans Against Property with a repayment period of up to 15 years. Choosing longer tenure seems a good option as it decreases the amount of EMI, but ultimately increases the payable interest. Hence, it is advised to keep your tenure shorter to release your property faster at the same time decreasing the payable interest.
3. Punctuality while paying EMIs
This is a very important rule; delay in EMI payment increases the overall cost of your borrowed amount. The late payment fees or penalties are charged on overdue EMI payments and your property comes under higher risk. Moreover, it might lead to mismanagement of your financial planning as the interest on the loan gets increased. It also affects your credit score which gets recorded in your credit report too. You can avoid all of this by being punctual in paying your EMIs.
4. Avail of insurance while borrowing larger amounts
LAPs or mortgage loans are assumed to be debts for the long term. And the higher the loan amount, the bigger the risk gets. Hence, it is strongly recommended to avail insurance to cover the borrowed amount in any case of an unfortunate event. These insurances aid in providing the required funds at the time of emergency to repay the loan EMIs and ultimately protect the property from getting seized.
5. Always read the terms and conditions carefully
It is strongly advised to thoroughly check and evaluate the NRI Loan Against Property documents as these are often lengthy and have extended terms and conditions mentioned regarding many details like processing fees, pre-payment charges, additional charges, etc.
Here is a list of some important documents you need to produce to avail an NRI Loan Against Property (LAP):
Properly signed and filled application form
Income proof- includes the salary slips, Form 16n and statement of bank account (salaried applicants), bank statement, financial statement, and income tax returns, (for self-employed candidates)
KYC documents- ID, signature, address proof, and DOB proof
Documents related to the title of the property
A cheque for processing fees
Along with NRI Loans Against Property, these rules hold the same for NRI Housing Loan and the candidate must follow to avoid future complications.
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Are NRE and NRO Deposits Same or Different?
NRIs who want to keep their India-based earnings in India, usually hold either NRO or NRE accounts. These are fairly popular deposit options exclusively available to them, giving them a good rate of return and placing their funds in India. This article will look at what NRE Fixed Deposit and NRO Fixed Deposit accounts are and how they are different from each other.
NRE Account- NRE is an acronym for the Non-Resident Rupee/External account. An NRE Fixed Deposit Account is where the Indian residing overseas makes deposits from there and sends the same in an Indian account. The money after reaching gets converted into Indian currency (Rupees).
NRO Account:- An NRO Savings account is a Non-Resident Ordinary Rupee Account, usually opened by an NRI to manage the income in any form (like rent, pension, or other types of dividends) that is earned in India.
How are NRE and NRO accounts similar/different?
1. Tax Exemption
The interests earned from NRO fixed deposits and credit balances are taxable at a rate that is higher than the domestic FD tax rates. Wealth and gift taxes are also applicable to such interests.
The interests earned from NRE fixed deposits are not taxable; hence, they are completely tax-free.
2. Repatriability or Transferability
Individuals with NRO FDs are not allowed to transfer the principal investment; only the interest earned (net of applicable taxes in the financial year) can be transferred to a foreign account.
NRE fixed deposit allows full repatriation of funds including both principal amounts and earned interests to the foreign accounts.
3. Joint accounts
An NRO account can be opened jointly with an NRI as well as an Indian resident. NRE fixed deposits can be opened jointly with another NRI but not with an Indian resident.
4. Deposits and Withdrawals
An NRI can only deposit funds in an NRO account if they are originating in India, and ultimately in his/her NRO fixed deposit. Hence, transferring funds from abroad for the same is also not allowed.
However, the transfer of funds from the NRE account to the NRO account for the same is allowed.
Although, you cannot open NRE fixed deposits by transferring currency from an NRO account.
Regardless of the deposition, all withdrawals can only be done in Indian currency.
5. Interest Rates
Although the rates of interest may vary for NRE and NRO FD accounts according to the banks, usually, they are offered with maturity between 1–20 years.
6. Proneness to Exchange Rate Fluctuations
The NRE FD Accounts are prone to the risk of conversion loss and exchange rate fluctuations regarding the value of the Rupee against the foreign currency. However, there are no such risks involved with NRO FD accounts.
There is no “better” option when you’re going to choose from these accounts. You can go for an NRE FD or an NRO deposit account as per your need, keeping in mind if you want to park your foreign earnings in an Indian account or park the funds earned from India.
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The SBM NRO Savings Account is designed for the Global Indians who value superior returns, world-class services and premium lifestyle privileges. Open NRO saving account at SBM Bank and Manage all your savings, earnings, and payments in India from anywhere in the world. Now SBM NRO Saving Account can be opened jointly between two Non-Resident Indians or Persons of Indian Origin. Visit us now!
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Your guide to managing your NRI Rental earnings
Investing in the Indian markets is one of the most lucrative options to grow your wealth today. This can be in the form of financial instruments, purchase of assets or gold and other mutual funds.
Indians have always had a natural tendency to accumulate small savings and ultimately either buy a piece of land or a house or some form of property. All NRIs must have seen their ancestors buy houses for not just themselves but also keeping in mind their generations to come.
You as an NRI may or may not wish to go back to your homeland irrespective of having a house back home or may have parked your excess funds by investing in the purchase of a property. Whatever may be the case, maintaining the property and its expenses is also a huge responsibility which is difficult for an NRI to fulfil sitting miles away.
Letting out your house is, thus, a good option as it takes care of the maintenance of your house as well as relieves the burden of any additional expenses that may be incurred on your property back home.
Bank your NRI rental earnings
An NRI can very well rent out a property that comes under his or her ownership in India. However, to enable smooth functioning of inflow and outflow of rental funds, an NRI’s primary task is to open an NRI savings account. NRI savings accounts are of 2 types – NRO savings account and NRE savings account. Rental income deposited in NRE saving accounts is fully repatriable while rental income deposited in NRO savings accounts can be repatriated up to a maximum amount of $ 1 million per financial year. However, if one does not wish to open an NRI saving account in India, they can also remit their rental income directly in their bank account abroad for which they will need to submit a Form 15CA or 15CB to the authorised bank.
Tax implication on Rental property
Since the property on which rental income is earned is situated in India, rental income earned from this property is also taxable as per the Indian Tax Laws. Simply add your net income earned from your property to all other income heads that you have earned in the financial year and pay taxes according to the tax slab rate applicable to you.
Know the concept of deemed rent
When an NRI owns more than one residential property in the country, one of the properties is considered self-occupied while the other property is considered (deemed) to be let out. Applicable rent is calculated on the second property and tax on the same is levied.
- If an NRI has only one property which is not given on rent, then that property is considered self-occupied and not deemed rent and its taxation is levied.
- If an NRI has 2 residential properties in India and both of them are not rented out, then one property is assumed as self-occupied while the other one is deemed to be let out. Applicable rent on the property is calculated and tax is levied on the deemed rental income of the property. In this situation, the NRI has the liberty to choose which of the 2 properties he wants to deem as self-occupied and which he wants to deem as let out.
- If an NRI has 2 houses in India and only one is let out, then the other residential property vacant is deemed to be self-occupied and rental income and its tax liability are only calculated on the property which is let out.
Manage your NRI rental earnings
As we already know, rental income can be parked in either an NRO savings account or an NRE savings account. The main objective of choosing one of these NRI savings accounts is beneficial to you, is by determining where you would like to invest your rental income.
First of all chart out your financial goals. It may be saving for your retirement, increasing your assets in India, growing your wealth by investing in the Indian financial markets or simply taking the money so earned back to your country of residence.
Secondly, you will have to ensure your KYC process is in order.
Finally invest your hard-earned income in various mutual funds, IPOs, ETFs, and bonds or simply start a SIP or purchase other financial assets as per your financial goals.
Whatever you may decide to do with your rental income, always remember rental income earned in India is an additional income that you enjoy. Managing this income and reinvesting it to further multiply your wealth is always a wise decision. SBM Bank India’s personalised banking is happy to support you in case of any assistance that you may require. Also, visit SBM Bank India to know more about our NRI saving account.
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Planning a trip to your homeland? Here's how your NRI account can be beneficial
India, as we all know, is a land of diversities. As an NRI, you would be wanting to visit many different places in India which may introduce you to diverse cultures, languages, food, clothing, weather and different terrains present in the country all at once. Visiting your childhood, and meeting relatives and old friends act like the icing on a cake. Despite you wanting to visit the country so dearly, there may be many speculations.
How will you adjust in India after so many years? Will the weather suit you? Will you be comfortable taking such a long trip? How would you manage work? Well, you may have a lot going on in your head but one thing that you can rest assured of is financing your trip comfortably.
- For every little thing that you would like to do on your trip to your homeland, you require money. This aspect can be very well taken care of if you have NRI savings account open in India much before you visit. Your NRI savings account can prove beneficial in “n” number of ways:
- Ready availability of funds through Cards – Wish NRI savings account is already in place so you do not need to carry a lot of Indian currency with you during travel. You can use your card to transact in the country immediately on arrival. This saves you from the hassle of finding a currency exchange counter right at the airport.
- Benefit in bookings – Your international card associated with the NRI savings account comes with a lot of special perks. Enjoy premium seats during your flight travel, huge discounts on hotel bookings, access to special airport lounges and many such perks which make your stay in India comfortable and leisurely.
- Concierge Services – NRIs enjoy special benefits from banks in which they have their NRI saving accounts. Banks provide premium facilities like concierge services from the airport to hotels to your doorstep.
- Insurance – You have trusted your banking partner for opening an NRI savings account, now all you have to do is take the trust forward and your bank will help you with all your travel and safety insurances. Your NRI savings account will act positively as your identity proof to procure insurance services from the bank’s insurance partners.
- Bespoke assistance – A dedicated team of expert professionals is always ready to help a bank’s NRI savings account holders. This will help you in case you feel lost or face any problem in your homeland.
- Interest rate – NRIs earn a higher NRI savings account interest rate than what a normal savings account would yield. So why not earn some additional income while you are on a holiday too?
- Mobile and Net Banking – Your NRI savings account comes with the facility of mobile and net banking which helps you access our account from anywhere at any time. You may need some urgent cash for contingencies, for a sudden requirement or simply for that extra shopping you just couldn’t resist. No worries! Your NRI savings account is in your pocket with you forever.
Have you planned your trip to India yet? If not, here’s another reason why you must! Convenience. Luxury. And the peace of mind. Enjoy all of this with SBM Bank’s NRI banking services. Open your NRI Saving Account today and plan your much-awaited trip of the year. Keeping all this information in mind while you choose your banking partner to open your NRI savings account will surely help you well manage your funds and enjoy your trip to the fullest without any glitches. SBM Bank India’s personalised banking is happy to support you in case of any assistance that you may require. Also, visit SBM Bank India (web link) to know more about our NRI saving accounts.
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Everything you would want to know about NRI Aadhaar Card
Aadhaar card is a mandatory document, for everyone who qualifies as an Indian resident. It comes with a unique 12 digit identification number and acts as a legal identity proof issued by UIDAI (Unique Identification Authority of India).
Since having an Aadhaar card is compulsory for all Indian citizens, many NRIs are not aware of the NRI Aadhaar Card provision made for them by the Government of India.
Why does an NRI need an Aadhaar Card?
- Aadhaar card is a single source of identification all across India.
- Aadhaar card is a legally approved document which can be used for authentication and documentation all across India.
- E-Aadhaar card helps authenticate any process in India, from any place at any time. This is beneficial, especially for opening an NRI savings account in the country since managing your finances is one of the first requirements anyone will require in a country.
Eligibility
- Any NRI who possesses a valid Indian passport is eligible to get an “Aadhaar on Arrival”
- The individual’s age should be 3 years and above
- Should be an Indian occupant i.e. he or she should be staying in India at the time
- Foreigners staying in India for more than 182 days are also eligible for Aadhaar card.
Application process
Aadhaar card is one process which can either be done offline or partly online. However, one has to be physically present in India for biometric verification (fingerprint, iris scan and photograph), only after which one can avail of their Aadhaar card.
- Take an appointment – An NRI can book an appointment with the Aadhaar centre both online and offline. For booking an appointment online, visit the UIDAI website, select a location suitable to you, provide your Indian contact number and book a slot to visit the Aadhaar card centre. For offline booking, simply go to the Aadhaar card centre, make an appointment for any suitable future date and timing. The first process of booking an appointment can be done much before an NRI enters the country, from the comfort of their residence.
- Present your documents – Once an appointment is booked, you will have to fill up a form and produce all necessary documents required to prove your identity along with a copy of your valid Indian Passport and proof of residence. These documents need to be carried by the NRI when he or she goes to the Aadhaar card centre in person, at the time and date of his or her appointment. The documents required for opening an Aadhar Card for an NRI are as follows:
Identity Proof – Driving Licence, Passport, PAN Card, Voter ID or any other photo ID.
Address Proof – Voter ID, Ration Card, Driving Licence, Gas or Electricity connection bill or any Water or Landline phone bill.
Age Proof – Birth Certificate, Passport, PAN Card or any other ID which proves an NRIs age.
- Biometric Verification – After an NRI has shared all his statistics and submitted the required documents, all that he or she needs to do is record their biometric details.
A fingerprint scan of all ten fingers
A scan of the iris of both the eyes and
A photograph is taken
Congratulations! You are done with your Aadhaar card process. Once the processing of your card is done, you will receive your Aadhaar Card at the Indian address mentioned in your form. Get your Aadhaar card today and open your NRI Saving Account with ease. SBM Bank India’s personalised banking is happy to support you in case of any assistance that you may require. Also, visit SBM Bank India to know more about our NRI saving accounts.
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NRI Fixed Deposits offered by SBM Bank India
As a Non-Resident Indian (NRI) you might be looking for some smart investment opportunities to diversify your portfolio and grow your savings. This is why you should consider investing in NRI fixed deposits offering lucrative interest rates to NRIs.
SBM Bank India offers FDs for three types of candidates Non-Resident Indians (NRIs), Overseas Citizens of India (OCI), and Persons of Indian Origin (PIO). If you are either one of them, you can apply and choose any tenure between 1 year to 3 years, as per your financial requirements.
Which types of NRI Fixed Deposits are best for you?
You can choose from majorly four types of NRI fixed deposit accounts.
NRE Fixed Deposits –You can deposit your earnings as savings in the branch and obtain higher interest rates given by the bank. However, the tenure of the NRE FD might differ from a domestic FD along with the interest rates. The biggest benefit of an NRE account fixed deposit is that the interest is fully repatriable and exempted from tax.
NRO Fixed Deposits –Same as NRE FD, except the interest rates, are the same as the domestic deposit, and the money is taxable. However, if you have a source of income in India, opening an NRO account is essential if you don’t want to pay penalties. Also, you can invest your money only through NRO accounts as an NRI.
FCNR Fixed Deposits – You can deposit your money in foreign currencies like the Pound, USD, Euro, CAD, Japanese Yen, and the Singapore Dollar, which are accepted all over the world.
The Eligibility criteria for all the deposits are summarized below
NRO deposit
Currency:- Indian rupee
Repatriability:- Interest is fully repatriable after payment of taxes
Eligibility:- PIO/ Individual NRI
Joint Account Facility:- Available
Tax:- Interest might be subjected to tax
Tenure:- 1 year to 10 years
NRE deposit
Currency:- Indian rupee
Repatriability:- Fully and freely repatriable
Eligibility:- PIO/ Individual NRI
Joint Account Facility:- Available
Tax:- Not taxable
Tenure:- 1 year to 10 years
FCNR deposit
Currency:- USD, GBP, JPY, Euro, CAD, SGP, AUD
Repatriability:- Fully repatriable(Interest and principal)
Eligibility:- PIO/ Individual NRI
Joint Account Facility:- Available
Tax:- Not taxable
Tenure:- 1 year to 5 years
Documents required for NRI fixed deposit account
The FD can be booked online or at the branch of the bank. However, most investors prefer to do it online.
Passport – It should have the name, address, DOB, photograph, and signature of the candidate.
Visa - Visa records are ought to contain important documents like the work license, and permanent resident visa. Apart from that, the resident permit and employment visa are also presented.
Why should you get an NRI Fixed Deposit?
Offers a high rate of returns Check rates offered by SBM Bank India.
Overdraft and loan facilities can be taken on the FD.
NRI FDs are highly safe and secure modes of investment.
Some types of NRI FDs are exempted from tax.
An option of nomination is allowed for the FD.
The interest rates on NRI fixed deposits vary with the tenure and the money invested, along with the type of currency the account is held in (for FCNR accounts). SBM Bank India offers the highest interest rates for NRI Fixed Deposits in India.
#NRI Fixed Deposits#NRI Fixed Deposit#nro savings account#nre savings account#nre savings account interest rates#nre account fixed deposits#nre account fixed deposit#nri home loan interest rates#nri housing loans#fcnr account#fcnr deposit
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What are the benefits of the NRE Savings Account?
As you move abroad and start finding solutions for your banking needs where you can save your money in Indian currency, you might face any confusion. As an NRI or Non-Resident Indian, it is a fairly common situation and it becomes necessary to find the appropriate alternatives.
This is when an NRE account turns out to be a feasible option. NRE savings account or Non-Resident External savings account is one where the NRI makes deposits from the country he is residing in his home country. The money after reaching gets converted into Indian currency (Rupees).
Apart from NRE Savings Accounts, SBM Bank also offers other types of NRE Accounts, like Current, Recurring, or Fixed Deposit Accounts. So, if you are planning to move abroad and wish to open an NRE Account, banks provide the facility to open it either individually or jointly. For a joint NRE Account, however, you need another NRI to open it with.
Let’s look at the other benefits of having an NRE Savings Account:
1 Tax Benefits in NRE savings account
Knowing about the taxation on interest earned on the deposits in an NRE savings account is necessary to decide if it is the right banking solution for you.
Hence, one huge benefit of having an NRE savings account is that the interest earned on the funds deposited is tax-free in India. Other types of NRI accounts, like NRO accounts, are subjected to taxes. You can also transfer money to your NRE savings account from other accounts after paying the applicable taxes.
2 Repatriation Advantages
Repatriation benefits come with most types of NRI savings accounts, including NRE Saving Accounts. It means that you can repatriate both, the principal and interest, abroad fully and freely. This ensures the smooth movement of funds across accounts.
3 Minimum Balance Requirement in NRE savings account
Unlike other savings accounts, you don’t need to maintain a certain balance in your NRE Savings Accounts. SBM Bank has updated its minimum balance requirement where you need to have a minimum of Rs. 10,000 in your account.
4 FCNR Deposit
In addition to having an NRE saving account, you can also book Foreign Currency Deposits to save your earnings in foreign currency. This can be done by booking the FCNR deposit. The best part is that you earn interest in foreign currency which is also tax-free in India.
5 Convenience benefits
If you’re thinking of opening an NRE Account, one more advantage is that you won’t need to visit your bank regularly. You can do that easily by filling out a form online, attaching the required documents and getting them attested, and couriering them to the bank in India.SBM Bank offers easy account opening and high NRE savings account interest rates for NRIs. Now you can simply email the required documents to the SBM Branch in India to open an NRE savings account.
#NRE savings account interest rates#fcnr account#fcnr deposit#nro savings account#nre savings account#nri housing loan#nri fixed deposit#nri savings account#nri saving account#nri home loan interest rates#nri loan against property
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Your perfect guide to NRI housing loans.
Being able to go back to a well-established house in your homeland which you can call your own – is a dream come true for many NRIs living abroad. But is it really advisable to block a huge chunk of your funds into building a house which you will use, at least in the near future, only as a second home? To resolve this dilemma, the Indian financial institutions provide NRIs with a well-designed financial system known as NRI housing loans.
What exactly is NRI Housing Loan?
NRI Housing Loan is a loan provided by banks to NRIs for purpose of purchasing a land/ building/ house or property for residential purposes. NRI housing loan can also be taken for renovating or remodelling an old property or constructing a new building altogether. These loans are typically called home improvement loans.
In order to avail of an NRI housing loan, an NRI has to first and foremost open an NRI account with an authorised bank. Secondly, he or she has to partner with an Indian resident who will act as a co-applicant, co-borrower or co-owner of the asset hence procured. Determining a co-applicant in your home loan application is an important prerequisite for NRIs to avail of a home loan. It is due to this requisite, the NRI need not be present in the country while availing an NRI housing loan. This process can be done by the NRI online from the comfort of his home.
Eligibility
Non-Resident Indians (NRIs) who are a minimum of 24 years old or maximum of 60 years old with a minimum of 2 years of overseas work experience are eligible for an NRI housing loan.
Persons of Indian Origin (PIO) and
Overseas Citizen of India (OCI)
Documents Required
Here is a list of documents required for an NRI to enjoy the benefits of an NRI housing loan:
NRI Housing Loan Application Form
3 passport size photographs
Copies of Complete passport and Work Visa
Employer ID Card
Identity Proof (Passport/ Aadhar Card/ Driving Licence/ Voter ID)
Current Overseas Address Proof (Electricity Bill/ Telephone Bill/ Property Tax Receipt/ Gas Bill)
Indian Address Proof (not mandatory)
Proof of Income
Salaried (3 months’ salary slip/ 6 months bank statement/ 2 years Form 16/ Work Permit)
Self Employed (2 years of income tax returns and copy of balance sheets/ Tax audit report/ 6 months bank statements of personal and business accounts/ business identity proof)
Details of Previous loans if any
Property papers
General Power of Attorney in the name of the Indian resident who is your co-applicant or co-borrower.
Features
Multipurpose Usage – Your loan amount can be used for building, purchase, rebuilding, remodelling or renovation of your residential property. This amount can be used in multiple places as per the borrower’s need.
Interest Rates - NRI home loan interest rates in India are very attractive as compared to most of the countries abroad. Enjoy attractive NRI home loan interest rates which an NRI can also repay on a monthly basis.
NRI housing loans come with an option of choosing between floating and fixed NRI home loan interest rates.
Also note, NRI home loan interest is charged daily reducing the balance of your loan. And women get a special concession in NRI home loan interest rates.
No extra charges – Your NRI housing loan is free from all the extra hidden charges and pre-payment penalty fees. Also, these loans come with a minimal amount of processing fee.
Quick – An NRI can ensure quick and transparent processes when applying for an NRI housing loan online. Also, the NRI can trach his or her online application process status online from the comfort of his house.
Long Tenure – NRI housing loans are available for longer tenures as long as 30 years or higher depending on the applicant’s credit score.
Sanction Amount – NRI housing loans offer sanction amounts as high as 80-90% of the total property cost depending on the credit score of the applicant.
Tax Benefit – Taking an NRI housing loan also reflects in your statements thus making you eligible to benefit from tax exemptions under section 80C.
Repayment – The loan so taken can be repaid either from funds available in the NRE account/ NRO account or FCNR accounts or from the recurring income against the property so possessed.
As we all can see, applying for an NRI housing loan is a win-win situation for the applicant in all cases. It is advisable to consult an industry expert who can help you maximize your financial gains from any place within or outside India. SBM Bank India’s personalised banking is happy to support you in case of any assistance that you may require. Also, visit SBM Bank India to know more about our NRI saving accounts.
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Beginners guide for NRI's who wish to invest in India.
First things first – Let us all understand what investing is exactly? Investing for any person having a stable income means setting aside a portion of this income that you think you may not require in the short-term future. While you are working hard in another country to earn the luxuries of life, this extra money of yours if invested well, helps you generate an additional income apart from your regular business.
As an NRI, the Indian markets give you a vast opportunity to invest your money and reap the lucrative benefits of your investments. The government also gives NRIs special preferences and facilities when it comes to investment in the Indian markets. All you have to do is open an NRI savings account with a bank in India. You can opt for an NRE account, NRO account or an FCNR account according to your needs and requirements.
NRIs can invest in various Indian asset classes like NRI mutual funds, Stocks, Pre-IPOs, Indian bonds, Real estate and many more. If you think this information is a little too much to handle, don’t worry, RELAX!
You need to plunge step by step into the wide pool of investments. However, overwhelming it may seem, a well-thought plan will always help you sail through.
Determine your investment goals
In order to invest in the right securities you first need to define your investment goals. You may want to invest for a specific future requirement like your child’s education, retirement plan or settling in a new property in a new country. Or you may also invest for short term gains that may add to your bank balance. In the beginning, it is advisable to invest in short term gains with low risk. Indian mutual funds are a popular choice in securities among NRIs planning to invest in India.
Another aspect that you may want to consider before deciding upon your investment instrument is the time you would like to devote to your money invested. You may decide to actively participate in investing or trading in securities on a weekly or monthly basis or you may take the "invest it and forget it" route wherein you park your funds in some established low-risk securities and reap sure shot returns without looking into it much.
Whatever you may decide, it is this decision that determines which securities you should invest in.
Set aside a beginner’s amount
Since you are a beginner, it is always advisable to learn the theory and practice of investments hand in hand. Set aside a fixed surplus amount that is not a part of your immediate required funds and you would not need it in the very near future. We do not mean that you will lose this money! Setting aside a pre-set amount for investments will relieve of you any that may occur due to the volatility of the Indian securities market. This not only helps you keep the focus on your main line of business but also increases your risk appetite in the market. And as we all know, higher risk leads to higher returns.
Learn about the basics of investing
Irrespective of the surplus funds you may be earning, it is always advisable to first learn the basics of investing and then put your money into the market. Learn about the different types of securities present in the market today and the difference between each one of them. Find out the difference between shares and bonds, mutual funds and gold led securities. Understand what you mean by indexes, volatility, futures and options. All these together will make your investment portfolio. All this information together may look a little too much to digest in the beginning but having a financial expert by your side who can guide you through can be of great help.
Chalk out the levels of risk
Carefully observe your cash outflows and inflows each month. This will give you a rough idea as to how much funds do you make in surplus per month. Also taking into account your profession, stability of income, financial responsibilities and future plans, budget your finances. This will help you ascertain your risk appetite. As we already know, a higher risk appetite will lead to higher interest rates and higher returns will a moderate and low-risk appetite will lead to a moderate and low return respectively. Based on your risk appetite you can now choose from the financial instruments that are available in the Indian markets.
Search for a suitable platform
For NRI’s who are a beginner in the field of investments, it is always advisable to seek help from an Indian financial expert who not only knows the Indian markets well but also understands the intricacies of investment. SBM Bank India's dedicated team of experts are always available for you to help you make your transition from a beginner who invests in low-risk mutual funds to moderate and high-risk securities smooth and hassle-free. Invest in SBM Bank India's customised investment portfolio to make your investments stable and fruitful at the same time.
Open an NRI account
According to FEMA (Foreign Exchange Management Act), an NRI can deal in investment securities like equity, debt, mutual funds etc. only through NRI trading and Demat accounts linked to an NRI bank account. NRE savings account and NRO savings account are both opened in Indian currency while an FCNR savings account is opened in your foreign currency. Depending upon which of the 3 accounts suit you the best, you need to first open this account in India only after which you will be allowed to transact in the country. SBM Bank India provides you with exclusive bespoke NRI account services, lucrative NRI interest rates and services to help you channelize your funds in the best possible way.
Invest and Enjoy
Investment is all about compounding the factors and gaining profits. The tenure, risk and amount put into investment security will determine how much surplus will you earn. Short term volatilities may sometimes bring your morale down, but choosing the correct investment option will always profit you in the long term investment scenario. Do not get carried away by the market’s short-term behaviour. Invest only after studying the investment’s future probable performance and a long-term record.
Once you have decided on making the most out of your surplus funds, do not doubt yourself. Go ahead and invest. Keep all these tips in mind and open your NRI account as soon as possible to maximize your benefits from anywhere in the world. SBM Bank India’s personalised banking is happy to support you in case of any assistance that you may require. Also, visit SBM Bank India to know more about our NRI saving account.
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What are the benefits of holding an FCNR account?
FCNR Account have become a popular tool for investment for NRIs in India. With the coming of the Union Budget 2019, many regulatory changes have taken place. The interest rates have been revised and a merger of NRI portfolio investments with foreign portfolio investments (FPI) has been proposed. This will encourage expanded NRI investments in equities and bank accounts with guaranteed returns.
FCNR Account- What is it?
FCNR is an acronym for Foreign Currency Non-Resident (FCNR) bank account, which is a term deposit account that allows the Non-Resident Indian (NRI) or a Person of Indian Origin (PIO) to transfer their foreign income to India in the same currency in which they are earning. This secures them against the exchange rate prospects.
It is a rewarding choice for NRIs to attract foreign money. In any case, the interest rates offered by these accounts may fluctuate contingent upon the type of currency held and the bank.
Features of an FCNR account
FCNR is a foreign currency-denominated account, where you can invest in the currency of your resident country.
FCNR deposit accounts are not savings accounts and they range from 1 to 5 years.
You can get both the principal and the interest repatriated freely in your resident country.
Both corporate and non-corporate clients can avail of rupee and foreign currency loans against their FCNR deposits anywhere in the world.
FCNR Account - Advantages
FCNR accounts are insured against forex rate dangers as the deposited funds are kept up in the same currency.
The premium earned from an FCNR account is non-taxable.
The candidate (or the NRI) can open an FCNR account with at least two NRI shared service holders.
You have the choice to choose different currencies - Pound, Sterling, US Dollar, Yen, and Euro.
An FCNR account lets you repatriate the principal and the interest earned to the country of residence/origin.
The interest rates are accumulated on a half-yearly premise and payable after the main year.
The ownership may range from 1 to 5 years.
The NRI can also apply for a loan against the assets held in his FCNR account when in need. Although the credit sum will be in INR and can be compensated from the amount you gain on the maturity of your deposit.
FCNR Account - Disadvantages
If the funds are deposited in an FCNR account after being held in an unreliable or feeble bank, the bank may not be able to repay the returns on maturity.
In case of a monetary emergency, the banks won't have the option to repatriate the assets.
If the deposit is pulled back within 1 year, no profit is owed to the bank.
As mentioned in the beginning, an FCNR deposit is a term deposit account.
Penalties are applicable in the event of untimely withdrawal.
FCNR accounts are legitimate alternatives if you, being an NRI, want to invest your earnings in India since there is no exchange rate risk involved, and is non-taxable.
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What are the benefits of the NRE Savings Account?
As you move abroad and start finding solutions for your banking needs where you can save your money in Indian currency, you might face any confusion. As an NRI or Non-Resident Indian, it is a fairly common situation and it becomes necessary to find the appropriate alternatives.
This is when an NRE account turns out to be a feasible option. NRE savings account or Non-Resident External savings account is one where the NRI makes deposits from the country he is residing in his home country. The money after reaching gets converted into Indian currency (Rupees).
Apart from NRE Savings Accounts, SBM Bank also offers other types of NRE Accounts, like Current, Recurring, or Fixed Deposit Accounts. So, if you are planning to move abroad and wish to open an NRE Account, banks provide the facility to open it either individually or jointly. For a joint NRE Account, however, you need another NRI to open it with.
Let’s look at the other benefits of having an NRE Savings Account:
1 Tax Benefits in NRE savings account
Knowing about the taxation on interest earned on the deposits in an NRE savings account is necessary to decide if it is the right banking solution for you.
Hence, one huge benefit of having an NRE savings account is that the interest earned on the funds deposited is tax-free in India. Other types of NRI accounts, like NRO accounts, are subjected to taxes. You can also transfer money to your NRE savings account from other accounts after paying the applicable taxes.
2 Repatriation Advantages
Repatriation benefits come with most types of NRI savings accounts, including NRE Saving Accounts. It means that you can repatriate both, the principal and interest, abroad fully and freely. This ensures the smooth movement of funds across accounts.
3 Minimum Balance Requirement in NRE savings account
Unlike other savings accounts, you don’t need to maintain a certain balance in your NRE Savings Accounts. SBM Bank has updated its minimum balance requirement where you need to have a minimum of Rs. 10,000 in your account.
4 FCNR Deposit
In addition to having an NRE saving account, you can also book Foreign Currency Deposits to save your earnings in foreign currency. This can be done by booking the FCNR deposit. The best part is that you earn interest in foreign currency which is also tax-free in India.
5 Convenience benefits
If you’re thinking of opening an NRE Account, one more advantage is that you won’t need to visit your bank regularly. You can do that easily by filling out a form online, attaching the required documents and getting them attested, and couriering them to the bank in India.
SBM Bank offers easy account opening and high NRE savings account interest rates for NRIs. Now you can simply email the required documents to the SBM Branch in India to open an NRE savings account.
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Which fixed deposit is more beneficial: FCNR FD vs NRE FD.
Coming to the management of your funds, always trust an expert. You may be a field expert, high-end professional or an accomplished businessman, but when it comes to investing your funds in a different country do not forget to engage industry experts of the country. India, though, may not be an NRI, however, you may need help when it comes to making financial decisions in the country. This is all because both the financial and economic demographics of a country change periodically.
Investing in fixed deposits may sound ancient, but is still the most popular practice among Indians and NRI investors.
An NRI who wishes to park his funds in India needs to first open an NRI account withhttps://www.sbmbank.co.in/global_indian/deposits.php an authorized Indian bank. He can choose from either an NRO (Non-Resident Ordinary) account, NRE (Non-Residential External) account or FCNR (Foreign Currency Non-Resident) account.
NRI fixed deposits are similar to term deposits. NRIs use an NRE account to open an NRE fixed deposit while they use their FCNR account to open an FCNR fixed deposit.
Let us study the similarities and differences between both NRE Account fixed deposits and FCNR Fixed Deposits.
To study more about differences between both NRE Account fixed deposits and FCNR Fixed Deposits
Click Here.👇
https://bestbankinghacks.blogspot.com/2022/03/which-fixed-deposit-is-more-beneficial.html
While both the deposits are NRI deposits they also share some points in common.
The interest and the principal amount are fully repatriable.
Interest earned from both accounts is tax-free.
Eligibility – Non-resident Indian (NRI) or Person of Indian Origin (PIO).
Documents – Copy of Passport, Valid work visa, Address proof of both India and abroad.
As we can see that the procedure that goes into opening an NRE fixed deposit and an FCNR fixed deposit are similar. While both the accounts give an NRI full flexibility in the repatriation and usage of funds, they also come with a few differences. These differences need to be studied clearly by an NRI before parking their funds in a fixed deposit.
An NRI who may need funds to be used in India shortly should go for an NRE Account fixed deposit. While an NRI who operates in multiple currencies and may or may not need to use the funds in the Indian subcontinent can always look for an FCNR fixed deposit account.
If you already have an NRI account in India, your partner bank will help you to get the best-fixed deposit services that best suit your needs. We at SBM India are always happy to support you with 24 x 7 technical support in case of any assistance that you may require. Also, visit SBM India to know more about our NRI accounts.
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All you need to know about an FCNR Account.
Providing NRIs with lucrative returns without much hassle was the main objective with which the FCNR account was first introduced. This primary objective still holds.
What is an FCNR Account?
FCNR stands for Foreign Currency Non-Resident Account. It is a term deposit account popularly known as an FCNR deposit. These fixed deposit accounts are opened for depositing foreign currency income earned overseas. The account is maintained in the same foreign currency as deposited.
NRIs (Non-Resident Indians) and PIOs (Person of Indian Origin) are eligible to open an FCNR account with an authorized bank or dealer.
FCNR account is more beneficial to those NRIs who are sure to repatriate their funds from the account on maturity. Also, FCNR deposits are a good option for NRIs who are looking for a secure hassle-free fund deposit option in India. You can book your FCNR Account in
US Dollars
Canadian Dollars
Australian Dollars
Pound Sterling
Swiss Franc
Euro
Japanese Yen
And a few more currencies that hold global goodwill overseas.
Documents required to open an FCNR Account
Opening an FCNR account from the comfort of your residence has now become quick and hassle-free. All you have to do is get in touch with a bank’s representative, fill out the required application online and attach the following documents with it:
Proof of your NRI status (Visa or Work Permit)
Address Proof in your country of residence
Address Proof in India
Copy of your Passport and passport size photograph
Copy of your ID proof (PAN Card or Form 60)
Features of an FCNR Account
Your FCNR account gives you unmatched privileges, which compel NRIs to park their funds in India.
Term Deposit Account – FCNR account is a term deposit account which means it is opened for a fixed tenure of anywhere between 1 year to 5 years. On completion of this period, the principal amount in the FCNR account and its interest can be redeemed by the account holder. In case of premature withdrawal of funds from the FCNR account, interest will only be paid to the holder if the amount has been deposited for over 1 year.
Tax Benefit – Interest earned on the amount deposited in your FCNR account is completely tax-free in India.
Repatriation – You can repatriate the entire principal and interest amount deposited in the FCNR account. This amount is completely transferable as per the account holder’s wish.
FCNR interest rates – Avail lucrative interest rates on your FCNR account. It is beneficial for NRIs living in countries that provide a very low interest on deposits in their country of residence. Such NRIs can deposit their income in India and enjoy the benefit of higher returns. SBM Bank India provides one of the highest interest rates on its FCNR deposits.
Exchange rate fluctuation – We already know that the amount deposited in the FCNR account is maintained and withdrawn in the same foreign currency as deposited. Hence, there is no risk of exchange rate fluctuations that occur due to the conversion of funds into Indian currency while depositing and again into foreign currency on withdrawal.
Account-holders – An NRI can hold an FCNR account single-handed or jointly with 2 or more joint NRI account holders or a relative who is a resident of the Indian subcontinent. This helps you well manage your account from a distance.
Loan against account – An NRI can also apply for a loan in Indian currency keeping your FCNR fixed deposit account as collateral. Loans thus taken, can be repaid from the redemption amount of the FCNR account on maturity.
Multiple currencies – FCNR accounts are highly beneficial for NRIs, especially ones who have their business spread across various countries. An NRI can deposit multiple currencies in their FCNR account as directed by RBI.
Therefore saving your funds in FCNR deposits in India will give you higher returns and more benefits than saving your funds in the country of your residence. Keeping all this information in mind while you open your FCNR account will surely help you maximize your benefits while you transfer your funds from and into your account from any place within or outside India. SBM Bank India’s personalised banking is happy to support you in case of any assistance that you may require. Also, visit SBM Bank India to know more about our NRI saving accounts.
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Tips to optimize tax savings for NRIs earning abroad.
Non-Resident Indian life comes with its own sets of challenges. While they do have many perks, they also have to deal with problems like double taxation. Non-Resident Indians earning abroad are taxed on their foreign income by their resident country. They are taxed for investments, properties, or any income that they may have in India as well. It’s natural to want to make the most out of your earnings in India and use tax deductions and provisions made available for NRIs. There are many ways in which an NRI can optimize taxes in India while earning abroad.
Before we get into tax optimization tips, it’s important to identify which NRIs are supposed to pay taxes in India. If you are an NRI with active business transactions, investments, and assets from which you make money in India, you are liable to pay taxes to the Indian tax authorities.
As an NRI you have to pay taxes on the following:
● All income accrued in India
● Direct or indirect income received in India
● Income received, accrued, or accumulated in India when deemed as such by the Indian tax authorities.
NRIs who do not have any of the above incomes are exempt from paying taxes in India. If you fall under any of the above categories, here are some tax optimization tips that will come in handy.
Deductions
Non-Resident Indians do not enjoy many tax deductions that resident Indians enjoy, such as investing in social schemes like Public Provident Funds or the National Savings Certificates. However, NRIs can invest in the National Pensions System and avail tax deductions of up to Rs. 1.5 lakh attached with it. An additional deduction of Rs. 50,000 is also allowed above the Rs. 1.5 lakh limit to encourage more NRIs to invest in the scheme.
Get a PAN Card
Most NRIs who have moved abroad have a PAN card, but if you don’t have one, getting one made would save you a lot of money. Individuals with a Personal Account Number (PAN) can claim an income tax refund. Income in India beyond a certain point is subject to Tax Deducted at Source. If you don’t have a Permanent Account Number, you might have to pay a higher TDS amount.
Maintain NRI Status
NRIs do not have to pay taxes for income accrued abroad in India. However, if you have lost your NRI status, then you might have to pay taxes on your income to the Indian tax services. In order to avoid losing your NRI status, you need to plan your visits to India carefully since your tax liability in India changes with your residential status.
Provisions
As an NRI, you can take advantage of the tax provisions for long-term assets purchased in foreign currency. When you sell or transfer your foreign assets, you cannot deduct for capital gains received but you can get exemptions under Section 115F of the Income Tax Act.
Claim home loan interest
Many Non-resident Indians invest in properties in India. If you are one of them and have applied for a home loan, you can claim tax deductions. Once you’ve paid the interest on your home loan or the property tax, you are eligible for a tax deduction. If at all you decide to sell your property, you will have to pay capital gains tax, and hence recommended to limit the number of capital gains made in a year to stay in the lower tax bracket.
While you can use the above methods to optimize taxes in India, it would be best to take expert opinion in this matter. After all, every individual's corpus and investment portfolio is different, and hence, with expert advice, you can maximize your tax savings with the right guidance. SBM Bank India provides a range of banking and investment solutions to Non-Resident Indians. From NRE Savings Accounts, NRO Savings Accounts, FCNR Deposits, home loans to premium privileges, extraordinary experiences, wealth management solutions with expert assistance and so much more, SBM Bank India brings NRIs a world-class banking experience. Their banking experts will not only help you put together an impressive investment portfolio but will also help you optimize tax savings efficiently.
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