Personal finance tips for soon to become NRIs.

Many Indians dream of settling abroad, but only a few have the determination to make it happen. Moving abroad is almost like starting a brand new life as an NRI (Non-Resident Indian). According to Foreign Exchange Management Act (FEMA), an NRI is a prior resident of India who has moved abroad for professional reasons or an indefinite period.

The idea of starting a brand new life in a new country may sound very exciting, but before you pack your bags and leave for good, it’s good to make sure that you have put your finances in order back home. 

Here are some tips to keep in mind before you start your new life abroad:

Convert your bank accounts

If you have a source of income in India from your property on rent you will have to maintain an NRO Account (Non-Resident Ordinary). You can convert your Savings Account to an NRO Account before you leave the country so that you can manage your earnings in INR with ease. In case you have multiple resident Indian accounts, you can also consolidate them all into an NRO Account. 

 

Apart from that, if you plan on sending money back to India to your family or for investments, you will have to open an NRE Account (Non-Resident External). With the NRE Account, you can remit your foreign earnings into INR with the flexibility of repairability if required.

 

Keep an eye on your investments in India

Apart from converting your bank accounts, you will also have to either liquidate your equity portfolio or seek professional advice on what to do about your investments. You can set up a (PIS) Portfolio Investment Scheme account. This account allows NRIs to invest in the Indian stock market with ease. 

If you have mutual fund investments in India, you may have to relook at those too. You might get double taxed if your country of residence has not signed the Double Taxation Avoidance Agreement (DTAA). 

Do thorough research on NRI taxations

As an NRI, you are required to pay taxes in your country of origin as well as your country of residence. The tax deduction in India is somewhat similar for resident Indians and NRIs. However, ensure that you have cleared all your tax matters before leaving the country. You could even consult a cross-border specialist or tax advisor for these matters to make your job easy. 

 

Buy health insurance

Many NRIs return to India to perform medical procedures since they have a family to take care of them. In such a scenario, it’s wise to have active health insurance in India to ensure smooth medical procedures back home.

 

Ensure timely payment on life insurance premiums

Life insurance can take care of your family, long after you’re gone. Many NRIs choose to keep their life insurance active in India even after they’ve moved abroad. Some might close theirs and open a new one in their country of residence due to better premium options. However, you won’t be able to open one as soon as you move there. So ensure that you make timely premium payments of life insurance back home, at least until your new life insurance policy is up and running.

 

Get a Forex card

It’s is important to get a Forex card before you leave India. This card enables you to withdraw cash in foreign currency, check your account balance, and shop abroad. Before your bank accounts in your new country of residence are ready, you will need a Forex card to make money matters easy for you.

Watch out for currency rate fluctuation

Many NRIs choose to keep investments in India and even take loans for properties and various other reasons. It’s crucial to keep a check on INR value against foreign currency since even slight fluctuations can cause a significant impact on your returns. 

A new chapter of your life awaits you, and SBM Bank India is here to help make turning the page over easier. With SBM Bank India’s range of NRI Accounts and offerings, you know your hard-earned money is being well taken care of so that you can live your new and improved life to the fullest.