If you are a seafarer and searching for info on an NRE account, then you are at the right place. The shine in your eyes when the question comes to money. And why not, this profession lets you sail across the major ports around the globe, witnessing marvelous sunsets and sunrises also pays you in USD.
We seafarers are NRIs, or if you have a doubt clear it here. We come back to India with all the earnings, here the NRE account comes into the picture.
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What is NRE Account?
As per the Foreign Exchange Management Act (FEMA) guidelines, an NRI cannot have a savings account in his or her name in India. You must convert all your savings (money earned abroad) to a Non-Resident External Account (NRE) or Non-Resident Ordinary (NRO) account.
Why do we require an NRE account?
So your management/manning company requires you to submit your NRE account details which can be used to transfer your foreign earnings. They can also retain their income from India (via any assets) in the home country itself.
Key features of the NRE (Non-Residential External) account:
- NRE account is an Indian rupee-denominated account.
- Accounts can be in the form of savings, current, recurring, or fixed deposits.
- You can transfer funds (Principal & Interest amount) to a foreign account from an NRE account without any complications and restrictions.
- NRE account is primarily used for carrying out business, personal banking, and making investments in India.
- The interest earned on deposits in an NRE account is tax-exempted. This means that both, the principal amount and the interest you earn is free from tax.
- You can open an NRE account with another NRI or a relative resident Indian in case of a joint account.
- NRE Accounts do not offer any protection against currency fluctuations, which are very volatile and prone to change on a daily basis.
An NRE account allows easy repatriability and transferability The NRO (Non-Resident Ordinary) account is used to maintain funds generated from Indian income sources.
What dollar rate should you get?
Let’s address the elephant in the room, to all those who have sailed once and know about the galley gossip happens once salary gets credited for the month about the rates one got through their respective banks, and for those who will be going for their maiden voyage know this that MONEY MATTERS. You left your family and worked in extreme working conditions for what? In the end, if you see that you are getting a rupee less than what others are getting you should not accept this.
The rates that you get through the bank depend on the strength of the dollar at that time, but the cream you’ll get through the bank only.
So, do yourself a favor when you visit the branch next time, sit with the manager, and ask him clearly about the factors on which dollar rates will depend and how to scalp maximum cream.
Thank us later during those galley gossips next time.
Is it compulsory to open an NRO (Non-Resident Ordinary) account?
No, it is not compulsory to open an NRO account with an NRE account. If you have an Indian income source, opt for an NRO account. But, if you just want to convert foreign income into Indian currency, the NRE account would be an ideal choice.
All the major banks in India have the facility to open an NRE account. Below are the links provided for opening NRE accounts in various banks:
Along with the other banking facilities the banks do treat you as their privileged customers.
