Benefits of Transferring money to NRE Account

NRIs can manage their finances in India through two types of accounts: the Non-Resident External (NRE) account and the Non-Resident Ordinary (NRO) account. NRE accounts are for transferring foreign earnings to India. If an NRI wants to conduct business activities in India, they can use NRE accounts. 

NRIs primarily use these accounts for direct investments in India. However, many people ask, "Can I deposit into an NRE account from India?" The answer is no. Funds are only transferrable to an NRE account from abroad or an NRO account under certain conditions. Transferring money to an NRE account has several benefits, which we will explore.

No Transfer Limit

The Foreign Exchange Management Act (FEMA) does not specify any limit on the amount of money you send to an NRE account. However, this income must be earned legally in your country of residence. If you are transferring very high amounts, you may be asked to explain your source of funds.

Multiple Modes of Transfer

How to transfer money to an NRE account in India? How to transfer money to an NRE account from the USA? These are common questions many NRIs have. You can transfer money to your NRE savings account in several ways. For example, you can use wire transfers or money transfer services offered by your bank. You can also transfer by depositing or mailing foreign currency cheques and demand drafts. All these different modes of money transfer come with specific advantages and disadvantages. You can choose the mode which is the most convenient for you.

Earn Higher Interest Rates

You can earn attractive interest rates on your NRE account, with up to 4% per annum, for end-of-day balances of ₹50 lakh or more. For balances below ₹50 lakh, the interest rate is 3.5% per annum.

Tax benefits

NRE accounts come with tax benefits. The principal amount is exempt from tax. You do not have to pay any tax on interest you earn in India. There is also no wealth tax or gift tax. As long as you pay taxes on your income in the country of residence, any money you transfer to an NRE account in India is not taxable.

Transfer from Any Place outside India 

When you transfer money to a NRE account, your money is converted to Indian rupees when it is deposited. This allows you to transfer money to your NRI account in any currency and then withdraw it in Indian rupees. You can use these funds for various investments you make in India, whether in deposits, mutual funds or property.

Access your Account Anytime

NRE accounts come with an international ATM-cum debit card. This lets you withdraw money across all ATMs and bank branches in India 24/7. You can also access the account safely and securely 24X7 through Internet banking.

NRE accounts are thus tailor-made to transfer money for any legitimate use in India. Click here to get started with the HDFC Bank NRI Account.