Friday, July 24, 2015

Can NRIs Invest in Public Provident Fund or PPF?

Can NRI Invest in Public Provident Fund or PPF?
Answer to this question is both Yes and No. Since an NRI cannot open a new PPF account, so its not possible for them to invest money in public provident fund, but if an NRI already has an active PPF account, opened when he was resident then he can continue to invest in PPF. Like other resident investor, he can invest up-to Rs 1.5 lakh every financial year i.e. from 1st April to 31st March. Earlier it was not allowed for an NRI to even invest in existing provident fund account but from 2003 onward, NRI can continue investment in their existing PPF account till maturity. This was very important steps taken by government then because it's not possible to premature close a PPF account i.e. you cannot close PPF account before 15 years completes. Though you are allowed to withdraw some money from your provident fund account before maturity. Only in case of death of account holder, premature closure of PPF account is permitted in India.

Friday, July 17, 2015

Can NRI open more than one NRE or NRO Account?

Can NRI open more than one NRE, NRO or FCNR account with different banks?
Yes, an NRI can more open more than one NRE, NRO or FCNR accounts with different banks in India. I am not exactly sure if you can open two accounts with different branch of same bank, but multiple accounts can definitely be held with different banks. For example, many of my friends has NRE accounts with HDFC Bank, Kotak Mahindra and YES bank. They even have multiple accounts withe same bank but account type is different. For example, you can open one NRE, one NRO and multiple FCNR deposits with HDFC bank. Normally, your resident saving account is converted into NRO account once you become NRI. A person is said to be NRI from income tax perspective if he stays out of India for more than 180 days in a financial year. Once you become NRI, you should inform your bank about your residential status and they would change your resident saving account to NRO (Non resident Ordinary account).

Saturday, June 13, 2015

What happens to NRE,FCNR, NRO account when NRI return back India?

One of the most common doubt among Non Resident Indians related to NRI accounts are, what will happen to their NRE, FCNR and NRO account when they return back to India? Even though you are not coming back in near future its good to know what happens to NRI account when you are no longer Non Resident Indian. When an NRI returns to India for permanent stay his various NRI accounts are converted into equivalent resident accounts. NRO saving account is converted back to resident saving account while NRE and FCNR account is converted into RFC (Resident Foreign currency) account. NRE fixed deposits can continue to run till maturity at the contracted rate of interest should you decide not to break them. After maturity, NRE and FCNR fixed deposit account will be converted to RFC account.

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