How an NRI Account Helps Indian Students Abroad to Easily Manage Their Finances

Studying abroad is a long-cherished dream for many Indian students. And even the pandemic has not changed that. In only the first two months of 2021, 72,000 Indian students left the country to study in foreign universities, according to recent statistics.

One of the biggest concerns associated with an Indian student leaving the country is money management. At the outset, it may seem like a challenging task but it is rather simple. Non-Resident Indian (NRI) students are eligible to open an NRI account, making it easier for them to handle their finances. However, it is important that they acquaint themselves with Indian foreign exchange remittance policies, the rules and regulations to follow in order to get an NRI account, and the multiple benefits of having such an account.

When opening an NRI account, it is important for students to first understand the foreign exchange remittance policies. A student studying overseas has to pay multiple types of university fees. In fact, colleges approve the admission only after the student pays up the admission fees from India.

But it doesn’t end at that. After paying the college fee, he/she also needs money for daily expenses. Living outside the country can be an expensive affair, given the change in currency value. So, parents have to often send money to their children to provide for their rent, food, and several other needs. Many students take up part-time jobs to fund these expenses. They work before or after college hours, and out of their earnings, some send a part of it back home to their families.

While all the money transactions are possible, it’s important to be mindful of remittance policies and what are the rules and regulations to operate an NRI account if you are a student.

The benefits of an NRI account

Under the Foreign Exchange Management Act (FEMA), students who go to other countries for the purpose of studying are treated as NRIs. These students can avail several banking facilities, similar to what are provided to NRIs.

For an NRI, however, the process to open an account is different from that of an Indian citizen. As per the same FEMA rules that allow students going overseas to open an account, it bars them from holding a savings bank account. They either need to open an NRI account or convert their existing savings account into one.

As students eligible to open these accounts are treated as NRIs, they can use the account for money transfers similar to NRIs. While there are several types of NRI accounts available to students, the most common is the Student NRE (Non-resident External) account.

Indian banks such as ICICI Bank offer NRI students the option to open an NRE account, giving them the freedom to comfortably manage their finances. Besides allowing them to transfer money internationally at their convenience, the account also offers many other benefits.

Students do not need a large amount to open an NRI account. They can start with a minimum account balance of as low as ₹5000 per month. The owner of the NRI account is also provided with an option to have an international ATM-cum-debit card. This makes it easy for students to withdraw money or make purchases.

Besides, the account also offers good interest rates. If it’s an ICICI Bank account, you get an interest of 4 per cent per annum if the balance is ₹50 lakh and above and 3.50 per cent per annum if the balance is below ₹50 lakh.

A major reason why students want to open an NRI account is to get rid of the complications when it comes to money transfer. An NRI account ensures easy movement of funds between India and the country of residence. ICICI Bank allows online transfer to 100 banks in India. An additional feature of this account is that the interest earned is exempted from tax.

These benefits make NRE accounts a lucrative option for Indian students studying abroad.

Documents required to open a Student NRE Account

There are a few documents that are required to open a Student NRE account . In fact, these documents can vary depending on the place of application. Students who apply for account opening at a bank branch in India and abroad must submit photocopies of the relevant pages of their passport. They must also submit a valid student visa/copy of admission letter/university identity card, and address proof, as per the bank guidelines.

However, students applying for account opening from outside India require a few additional documents. Apart from the above mentioned documents, additional proof and funding documents as per specific bank policies are required. All documents must be self-attested by the applicant as well as attested by a notary/embassy or consulate officials/banker.

After submitting all the documents, NRI students can easily open an NRE account and access all the facilities provided to them.

The bottomline

Having a student NRI account can help students and their families lead a stress-free life with regard to finances. Students can seek help from bank executives at any point, if they encounter any issue. They can put all their energies behind going after their life goals and let the bank handle all their financial matters.