Banking Choices for Non Resident

Indians

Generally non-resident Indians (NRI) open bank accounts in India attracted by the higher interest rate when compared to banks in western countries. Imagine North American banks paying less than 1% on savings accounts compared to 4 to 5% paid by Indian banks! Fixed deposit rates in 2016 are paying close to 8%. Selecting which bank to open an account with in India for NRIs however is not a matter of which bank pays the higher interest rate, as just about all major banks pay the same rate of interest. Prior to October, 2011 interest rates were controlled by the Reserve Bank of India (RBI). As of October 25, 2011 the setting of saving bank deposit interest rate has been deregulated by the RBI. Banks in India are now free to set their savings bank deposit interest rates subject to two conditions set by the RBI: 1. First, each bank will have to offer a uniform interest rate on savings bank deposits up to Rs.1 lakh, irrespective of the amount in the account within this limit. 2. Second, for savings bank deposits over Rs.1 lakh, a bank may provide differential rates of interest, if it so chooses, subject to the condition that banks will not discriminate in the matter of interest paid on such deposits, between one deposit and another of similar amount, accepted on the same date, at any of its offices. NRI’s living abroad in the United States, UK, Canada, Australia, Germany or France often open bank accounts with banks that offer Nri banking services. While investing in India for higher bank interest may be a motive for opening NRI accounts in India, Nri Banking services also help non resident Indians meet their obligations in India such as pay bills in India for expenses such property maintenance, life insurance premiums etc or perhaps to send money to family members in India.

Selecting a NRI Bank abroad

Despite deregulation NRIs will find that most banks offer the same rates of interest. So selecting a bank solely on the rate of interest a bank may pay is not a factor. Customer service is the main factor that should be considered for selecting a NRI bank. Some of the things you may want to consider are: • For NRIs one of the determining factor in selecting a bank for their NRI banking accounts should be whether the bank has a bank branch overseas in the country the reside in. This can be very helpful when it comes to bank customer service. • Location of the bank, is it easily accessible when you visit India. Some banks in India have separate sections for NRI clients and they can bypass the huge lines at bank counters in India. Depending on the type of account one holds, some banks will even send bank representative to your residence in India to make banking services easy! • Don't let the free gifts be the deciding factor. Most banks offer the same types of accounts to non resident Indians. • The interest rates on NRI accounts you will find are generally the same in most banks offering NRI banking services. • Customer service is what you should look for when deciding on a bank to do your banking. Nri's living abroad need customer service not only in the overseas country they live in, but also when they visit India. NRI's should keep in mind that even though the banks they deal with may be located in foreign countries, their Nri accounts are usually not protected by deposit insurance of the country they reside in. While local accounts may be protected in a particular branch and signs posted in the bank that the bank accounts are insured by way of deposit insurance, don't automatically assume that your NRI bank accounts in that bank are also insured. The chances are that they are not. Is your money safe in Indian banks? Problem with your bank in India? Car Insurance! how rates are set