NRO Accounts – The Most Frequently Asked Questions
Most people today jump on the opportunity to move abroad. Such an opportunity may change your life completely, but the transition is not always easy. There are several things that warrant your consideration in the process of moving abroad. Of them all, managing your finances efficiently can be a rather huge concern. You need to assume NRI status and also ensure that you open the right NRI bank account from the two most common types of accounts – the NRO and NRE savings account. Here are some of the most frequently asked questions about the NRO savings account.
- What is NRO account meaning?
Non-Resident Ordinary Rupee Account or NRO savings account is a special type of bank account that can only be opened by Non-Resident Indians. This type of account is ideal for NRIs who are moving abroad but have sources of income in India. For instance, you may have share market and mutual fund investments, you may have rented your property in India or you may have to pay your insurance premiums and property taxes and so on. All the transactions can be completed if you continue to have an Indian Rupee account in the form of an NRO savings account.
- How can I open my NRO savings account?
Opening an NRO account is rather simple. In case of NRO savings accounts, you can simply inform your bank about your change in residency status, fill a form and attach the necessary documents to convert your resident savings account into an NRO savings account. You do not need to open a separate account. The bank will convert your resident savings account into an NRO bank account, and, in most cases, your account number will remain unchanged.
- The only savings account I have in India is a zero balance salary account. Can I convert it into an NRO savings account?
In case you only have a zero balance salary account in India, you first need to convert it into a regular savings account, in which you must maintain the average minimum balance required. After the salary account is converted into a regular savings account, you can convert it to NRO account.
- Can I repatriate money from my NRO savings account?
Customers holding NRO savings account may not repatriate the principal amount deposited in the account. You can only repatriate the interest earned on the principal amount, but the entire interest amount can be fully repatriated.
- What facilities can I get with my NRO savings account?
Banks provide a wide range of facilities to NRO account holders. For instance, you get net banking facilities, quick and easy loans, fund transfer via net banking and other mediums like Xpress Money and Western Union, overdraft facilities etc.
- What are the benefits of opening an NRO savings account?
There are many NRO account benefits. For starters, it is the ideal account which helps you manage and maintain your Indian sources of income. You can even assign a nominee and a Power of Attorney in India, to manage the account on your behalf. You earn good interest on the savings parked in this account and you can benefit from the Double Taxation Avoidance Agreement.
- What is Double Taxation Avoidance Agreement?
Double Taxation Avoidance Agreement or DTAA is simply an income tax agreement between India and foreign countries that prevents Indian citizens from going through strict tax measures over their earning in their home county and their country of residence. You can avail this facility upon converting your resident savings account into an NRI account.