SBI NRI Services Review

The State Bank of India, the largest lender in India, offers a plethora of services, for its non-resident Indian customers. Basically, there are four types of NRI accounts that the bank provides – Non Resident Ordinary Account (NRO), Non-Resident External account (NRE), Foreign Currency Non-Resident (FCNR) and Resident Foreign Currency Account (RFC).

Related: Citibank NRI Services Review

Types of NRI Accounts

Here’s a look at the four types of NRI accounts offered by most banks in India;

NRO or Non-Resident Ordinary Account

This is a single or joint account of two or more NRIs of Indian origin. It allows deposits of India-based current income in INR. The account can be of several types, including savings, term-deposit, recurring deposit, special term-deposit and current account. The funds deposited in this type of account can either be fresh remittances from abroad or transfers from other NRE/NRO/FCNR accounts. SBI grants loans against deposits in this account. The account is not repatriable.

Related: HDFC NRI Services Review

SBI NRO Account Features

• Taxable @30.90%, if interest income is less than or equal to ₹1 crore.
• Taxable @34.608%, if interest income is more than ₹1 crore.
• Rate of Interest @3.50% p.a., if savings deposit balance is up to ₹1 crore.
• Rate of Interest @4.00% p.a., if savings deposit balance is above ₹1 crore.
• Double Taxation Avoidance Agreement (DTAA) benefit for depositors of specific countries.
• Other features include internet banking, NRI family card, multi-city cheque book, debit card and SMS alerts.

NRE or Non-Resident External Account

This is a freely repatriable account that can be opened as a single or joint account with two or more NRIs of Indian origin. The accounts can be funded by remittances (overseas earnings) from the NRI’s country of residence or another NRE account. Interest accumulated on this account is free of income tax.

SBI NRE Account Features

• Rate of Interest @3.50% p.a., if savings deposit balance is up to ₹1 crore.
• Rate of Interest @4.00% p.a., if savings deposit balance is above ₹1 crore.
• Loans available in INR on deposits in NRE accounts.
• Minimum monthly balance of ₹1,000.
• All facilities, including NRO account, internet banking, NRI Family card, etc.

Foreign Currency Non-Resident Account (FCNR)

Unlike the other accounts, a joint account cannot be opened in this category, while the deposit is denominated in foreign currency. SBI allows deposits in USD, GBP, EUR, CAD, JPY or AUD. There are two types of accounts that can be opened – term deposit and special term deposit. Both foreign currency and rupee loans are available against deposits in this account, and the interest is free of income tax.

SBI FCNR (B) Account Features

• Interest rates depend on currency denomination. With effect from December 1, 2018, the interest rates have changed.
• No interest is charged if the deposit is withdrawn before 1 year.
• The FCNB account combines the benefits of FCNR, with forward cover. The minimum deposit is US$25,000 or equivalent.

Resident Foreign Currency Account (RFC)

This account is useful for NRIs who have returned to India for permanent settlement. SBI allows deposits in USD, EUR and GBP. Interest rates for SBI RFC account have changed, with effect from December 1, 2018. This account can be converted in to an NRE or FCNR (B) account, if the account holder regains NRI status.