Each year, lakhs of Indians leave for foreign countries and eventually attain the status of non-resident Indians (NRIs). But that doesn’t mean they end their connections with India. Moreover, most NRIs tend to continue investing back in their domestic land through several options. To keep track of their investments, they need to maintain bank accounts in India.
NRIs are permitted to open or convert their savings bank accounts but certain rules and regulations apply. As per the Foreign Exchange Management Act (FEMA), NRIs cannot have accounts similar to what an Indian resident has. However, they are permitted to open specific NRI accounts, which cater to their requirements like the non-resident external (NRE) recurring deposit (RD) account. It allows them to invest money regularly. Wherein NRE RD account is highly recommended, this account comes with certain conditions that an NRI must follow before opening the account. Here’s a quick guide before opening an NRE Recurring Deposit Account.
With an NRE Recurring Deposit Account, you, as an NRI, can invest in small accounts in India on monthly basis. This is useful in the long run because it helps in making big savings. The account is maintained in Indian rupees.
RD functions the same way as an FD. An installment of a prefixed amount earns the same interest during the tenure with the bank each month. After maturity, the customer receives an accruing value of all the installments plus the interest earned.
Eligibility to Open NRE RD Account
- You must be an NRI or a PIO (Person of Indian Origin)
- While opening an RD account, ensure that you have an NRE bank account with the same bank
How to Open an NRE RD Account?
To open an NRE RD account:
- First, check the primary eligibility criteria
- Once the criteria are met, apply either online or download the application form from the bank website.
- If you fail to find the form online, you can reach out to the bank and ask for the application form.
- Before filling out the form, ensure you have these documents handy: self-attested photocopies of passport, address proof, valid work permit or employment visa.
- Then mail the completed form to the bank address.
- The PIO cardholders will need some extra documents like the PIO card or past Indian passport of self/parent/grandparent along with a self-declaration about Indian origin or self-declaration for PIO as given on the relationship form.
