Money Matters: All You Need To Know About Non-Resident Ordinary (NRO) Account For NRIs

For non-resident Indians (NRIs), managing finances across borders can be a difficult task. One crucial aspect of financial management for NRIs is having the right type of bank account to facilitate transactions and investments in India. Among the various options available, the Non-Resident Ordinary (NRO) account stands out as a flexible and convenient choice. In this article, we will tell you about the essential aspects of NRO accounts, from their features and benefits to the procedures for opening this account:

What Is An NRO Account?

An NRO account is a type of bank account designed specifically for NRIs to manage their income earned in India. It allows NRIs to deposit and manage their income in Indian currency, facilitating transactions and investments within the country. NRO accounts can be opened as savings, current, or fixed deposit accounts, offering flexibility to suit different financial needs.

Features And Benefits of NRO Accounts: (as per RBI)

• This account permits you to receive funds in either Indian or foreign currency. However, only Indian currency can be withdrawn since NRO Accounts are maintained in Indian currency and cannot be freely converted into any foreign currency.
• With an NRO Account, you have the freedom to repatriate or transfer the interest earned on your deposited principal amount. Additionally, you can also transfer the principal amount within specific limits. According to regulations, you can transfer up to USD 1 million in one financial year after payment of applicable taxes.
• Interest earned on an NRO Account is subject to a 30% tax deduction at the source. It's important to note that income earned in India and deposited into an NRO Account can encompass various sources such as rent, dividends, pensions, and more.
• Non-Resident Indians (NRIs) have the option to obtain loans using their NRO (Non-Resident Ordinary) accounts. (Know What Are The Different Types Of NRI Accounts)

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Documents Required For Opening An NRO Account:

• The first and last four pages of your passport, which include your personal information such as name, address, date of birth, expiry date, expiry date, signature, and photograph.
• Address proof
• Visa/Residence Permit/Residence Visa
• Valid employment Authorisation/ Permit
• PAN card copy

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How To Open An NRO Account?

Opening an NRO account is a straightforward process for NRIs. Here are the typical steps involved:

• Select a bank that offers NRO account services and meets your specific requirements in terms of services, fees, and convenience.
• Prepare the necessary documents, including proof of identity, address, and status as an NRI.
• Fill out the application form for opening an NRO account, providing accurate information and supporting documents as per the bank's requirements.
• Submit the completed application form along with the required documents to the bank's branch or through online channels, if available.
• Then the bank will verify the provided documents and information before opening the NRO account. This process may take a few days, depending on the bank's procedures.
• Once the verification process is complete, the NRO account will be activated.

Source - https://www.rbi.org.in/commonperson/English/scripts/Notification.aspx?Id=847

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