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Why is an NRE Savings Account essential? What are its eligibility criteria?

A Non-Resident External Account generates deposited foreign funds to India. This means can deposit money in any foreign denomination. The denomination then gets converted into INR. An NRE Savings Account is highly beneficial to global Indians. It offers them many rewards. Some provide attractive NRE Savings interest rates, productive fund management, etc.
These help Non-Resident Indians to continue transactions seamlessly. There are different reasons to justify its importance:
Overseas fund
Sometimes, your family members in India are reliant on you. Then, convert the currency into INR. After this, you consider the money transfer agency. This can be time-consuming. However, through an NRE Account, you can send your overseas funds to India. The money you send automatically convert into INR. You are also allowed to hold your funds in INR.
Interest rates
The interest on NRE Savings Account gets exempted from taxes. This means your principal and interest are tax-free in India. Some banks even offer high-interest rates on your savings. Unlike NRO Account interest rates, it is not subject to TDS deduction.
Easy investment
NRIs have certain restrictions when investing in Indian Equities. They can invest in the Indian stock market. This distances them from the potential profits. Under the NRE Account, however, you may do so. You may quickly invest money in investment instruments.
Maximise earnings
NRE Accounts increase your savings. This is because of their NRE Savings Account interest rates and investment allowances. Through interest rates and market profits, you maximise your earnings.
Accessible funds
NRE Accounts let you financially support your family members in India. No matter what country you stay in, you get to transfer funds to India. This way, your funds are easily accessible to them. You must issue a mandate to a resident Indian family member for this.
Eligibility criteria
To apply for an NRE Account, meet the desired eligibility requirements. These criteria are different from a standard account. Just about anyone cannot apply for the account. Only the following can apply for it:

  • An individual who holds an NRI status
  • An Indian citizen who resides overseas for work or education purposes
  • Those working in UN Organisation
  • An official sent abroad by the Government of India
  • An Overseas Citizen of India
  • A spouse of an Indian citizen residing abroad
  • Anyone who has held a valid Indian passport at some point
  • People whose parents are citizens of India under the Indian Citizen Act 1995

Meeting even one of these is sufficient.