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Hello,

For folks who dont know what NRI means, it stands for Non-Resident-Indians.

NRI accounts are offered by banks such as HSBC, Citibank etc for people who live here in the USA(or anywhere in the world) and wish to open a bank account in India. The benefits derived from such accounts are many such as no-fee money transfers etc.,

I am looking to open a NRI account and would really appreciate some advice on choosing the right bank.

I am leaning towards HSBC right now, I am a bit biased coz I have a Checking, Savings and Credit card account with them and my parents in India also have similar accounts.

Thanks for looking ! expecting some smart Desi advice <img src="i/expressions/face-icon-small-smile.gif" border=0>





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Yes You have to pay tax if u are not a Student in F1 or J1 visa catagory

ohtrap (Jul. 17, 2006 @ 4:37p) |

Any interest earned on deposits in India (or anywhere else) is taxable in the US if you are considered a resident for ta... (more)

stanguy (Jul. 17, 2006 @ 5:51p) |

My horrow stories of Citibank NRI account. They have never been able to match the signatures and always the money is st... (more)

davneil (Oct. 06, 2006 @ 10:49a) |

List of Banks offering NRI Banking....Click here
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I have my account with ICICI bank, they have extensively network and plenty of ATMs where ever you go. Though I must admit it was not easy to open the account over the net, it took a while, but once you are set, you don't want leave them.

The most important thing for me is the vast network of ATMs, during my last trip to India, I didn't have to search for ATMs for long time (at least in Tamilnadu), but I didn't see much ATMs from HSBC though...

Thanks Junky123. I am from Hyderabad and ICICI has a good presence in my city too.

I was just looking at HSBC and the minimum balance is Rs.25000 !!!!. What is the min balance in ICICI ?.

I second your opinion on HSBC ATM's <img src="i/expressions/face-icon-small-shocked.gif" border=0>, I am moving to SoCal in a week and HSBC has no ATM's there except in LA. Haha...but I found SBI in SoCal.


I have both ICICI and citibank. Good think about citibank, they will deliver a money order anywhere in India in 24 hours. This service is free of cost. I like this service because I can send money to anyone in India whenever there is a need. I keep ICICI bcos I like the network of ATMS in India.

Minimum balance at CITIBANK - 500
ICICI - No balance.



My girlfriend is from India; we plan to get married. She is an NRI. After marriage I will qualify for the PIO card. Will this qualify me for NRI Account ?

Also, could you please specify what kind of "NRI Account" you guys are using ? I found a lot of types: NRE, NRO, FCNR (and also RFC, which is what happens to FCNR if account holder becomes resident in India).

Our needs are as follows: We plan to make investments in India (buying apartment/house). We probably will also want to sell them at some point and repatriate (investment, profits might be hard to repatriate) money back to USA(*). We also want to send money to her family.

(*)The profits earned in India can be kept in India; that's not a problem for us because she has enough people close to her in India who can hold or use the money. We might relocate to India at some point in the future (maybe in 10 years).

I'm thinking it is best to open NRE and FCNR, and keep only money that needs to be immediately spent in India in NRE (to avoid loss due to weakening rupee) and the rest in FCNR (in USD dominated account).

I want to avoid private banks like Citibank or ICICIBank etc because their NRI accounts are (as far as I know) not insured by anybody (either FDIC or Govt of India). The only Indian bank that looks like a reasonable choice seems to be State Bank of India.

I'm not concerned about keeping small amounts in Citi bank or ICICI Bank to use their money transfer or ATM facilities. But the larger amounts (USD 100K or more) must stay in safe banks insured by some government.

Is it safe to keep USD 100K to USD 500K in State Bank of India ? Is there any limit to insurance provided by government of India ? I have not found this information anywhere. I don't trust SBI CSR's (or any CSR of any bank, for that matter) to tell me this info reliably. I'd like some definite information from a reliable source (not a bored CSR who may just tell me something to get me off his back).

Thanks in advance for your help.

Anakin


Before you open any NRI account - COMPARE the exchange rates (at any given day). Thats where these banks make the money.

When I had compared (3-4 years back), CITI used to be a max rip-off.

ICICI was good... but they screwed up the application process... so I ended up opening an account with HDFC.

I like HDFC so far.

One thing which I hated about my NRI account was that it took almost 5 weeks for my check from my acct here to get deposited in my acct in India.
But then I used the HDFC quick remit service and my money was in India in barely 3 days.

HDFC has been pretty incompetent so far, sending my parents the wrong pin for my acct (don't know why they don't mail it to my US address). Then refusing to reset it, then finally taking another 3 weeks to send me a replacement pin which finally worked.

Although everything above is pretty negative, I guess I am not unhappy. I have heard way too many horror stories from ICICI to put my money there.
One thing we all have to realize that the concept of good(competent) customer service does not seem to exist in India, its like hitting your head against a wall. I remember when my mom had a check she deposited which didnt show up in her bank balance and she had to make 20 phone calls, 10 trips and almost 5 weeks before anyone helped her figure it out.

To the poster thinking about putting that much $$ in a Indian bank acct, why would you want to do that? I would just leave it in an acct here and move it there if you move. The other option would be to buy stocks or properties, but in my opinion the real estate market is in a bubble. I understand that there is not enough housing in the country, but still.. the prices are insane.. I don't understand how even a middle or upper middle class indian family can afford to own over there. I have my money on the market crashing or atleast stagnating for a while. So not worth to buy to invest, but if you think you may go back, its never really a bad time to buy..

Phew.. and oh yea.. being a PIO basically gives you the same rights as a NRI (so even if the bank doesnt spell it out, a PIO holder can open the same accts a NRI can at any indian bank).


And yea, the exchange rates by HDFC seem pretty competitive.
Although I hear SBI is the best. But then again customer service at private banks is bad enough, it drops off even more if you go with a national bank like SBI.. Fun Fun Fun


One time I transferred $1000 using Citi and ICICI NRI on the same day to get an accurate comparison on the rate offered by these 2 banks. ICICI offered a much better exchange rate than Citi. There was a difference of almost 50 paisa. Since that day I have been using ICICI NRI account.

Thanks for the replies guys.

Yes, customer service is just non-existent in India. But, I think what ultimately matters is how far your dollar is stretching. If ICICI and Citi exchange rates differ by a whooping 50 paisa then I think I will go with ICICI. Also, because of its vast ATM network in Hyderabad and India.

If folks back home need money real quick then we can always use the remit2india or other services.

Anybody agree?

pnukala said: [Q]

I was just looking at HSBC and the minimum balance is Rs.25000 !!!!. What is the min balance in ICICI ?.



That works out to less than $600. If you are not putting in at least that much why even bother with the NRI account?

arib0nd said: [Q]One thing which I hated about my NRI account was that it took almost 5 weeks for my check from my acct here to get deposited in my acct in India.
But then I used the HDFC quick remit service and my money was in India in barely 3 days.

HDFC has been pretty incompetent so far, sending my parents the wrong pin for my acct (don't know why they don't mail it to my US address). Then refusing to reset it, then finally taking another 3 weeks to send me a replacement pin which finally worked.

Although everything above is pretty negative, I guess I am not unhappy. I have heard way too many horror stories from ICICI to put my money there.
One thing we all have to realize that the concept of good(competent) customer service does not seem to exist in India, its like hitting your head against a wall. I remember when my mom had a check she deposited which didnt show up in her bank balance and she had to make 20 phone calls, 10 trips and almost 5 weeks before anyone helped her figure it out.

To the poster thinking about putting that much $$ in a Indian bank acct, why would you want to do that? I would just leave it in an acct here and move it there if you move. The other option would be to buy stocks or properties, but in my opinion the real estate market is in a bubble. I understand that there is not enough housing in the country, but still.. the prices are insane.. I don't understand how even a middle or upper middle class indian family can afford to own over there. I have my money on the market crashing or atleast stagnating for a while. So not worth to buy to invest, but if you think you may go back, its never really a bad time to buy..

Phew.. and oh yea.. being a PIO basically gives you the same rights as a NRI (so even if the bank doesnt spell it out, a PIO holder can open the same accts a NRI can at any indian bank).

Thanks for the helpful reply arib0nd. I really appreciate the information, and your advice.

I too agree the real estate market right now is overvalued in most big cities like B'lore etc. I was thinking of smaller cities around big ones, where maybe buying an apartment now could be a good investment. I've not yet done much research about this though.

Right now I'm just collecting information; not going to make a big investment right now before doing more research...

You mentioned moving money to India. I have identified the following options:
1. write a check on my US bank (like Washington Mutual) and send it by mail to India to be deposited in an Indian bank (like State Bank of India) account.

2. Online money transfer services like remit2India, money2India, etc etc.

3. Western Union money transfer

4. NRI (NRE, I think, not NRO) account with Citibank, ICICI Bank, State Bank of India, etc. Put USD into account from USA, take INR out in India.

5. Wire transfer.
[Feel free to add more options I may have forgotten of.]

I have also identified the following parameters which seem important:

1. Speed of transfer. If it happens in days, vis-a-vis a month.

2. Exchange rate.

3. Fees.

4. Convenience of money availability in India. Do they send a bank draft to your house in India, or the money is automatically deposited into your Indian account (as in case of NRE) etc etc.
[Feel free to add additional parameters I may have neglected to mention that you consider important.]

Could those of you who have used these services please write from your experiences which of these 5 options above are the best in terms of each of these 4 parameters above ?

For example, if I write a Washington Mutual check and FedEx it to India, how long will it take after the check is deposited till the money is available in Indian rupees ? Will any fees be charged (to cash an overseas check, for example) ? How does the exchange rate compare with that offered by other options as listed above ?

Maybe we could create a good repository of this information here.

Another question. Not creating a separate thread for it because it is related to NRI issues and not of general interest to the entire FWF community.
[Everything below is hypothetical. I am not really moving to India in a year, nor do I have a house as yet <img src="i/expressions/face-icon-small-smile.gif" border=0>; I'm collecting information to plan for the future.]

Say I am moving to India in a year. Say that I plan to come back to USA after a gap of say 5 to 15 years (maybe when my children finish school in India and are ready to go to college in USA, or for job reasons, or for other personal reasons).

Say I have a house in the USA that I may or may not want to sell. Say I have brokerage accounts with stock holdings I may or may not want to sell. Also I-Bonds. 401(k). IRA.

Say I move my cash holdings to India (through FCNR -> RFC route) because IRA is not interest-friendly and I don't want to pay 30% tax on the interest. I just keep one US checking account open. I also keep all my US credit card accounts open.

Say I keep the rest of my holdings in USA as before. I find a real estate management company to rent out my house and pay me 80% of the earnings.

Say I don't want to maintain a US address. Maybe I could get a large PO Box to have all my bank statements etc come to, but I don't want the headache of having to come here every 6 months just to empty the PO Box.

Say I don't want to use a friend's address because I'm not sure of the legality of doing so (could it be considered fraudulent to use an address I don't really live at ?).

What are my best options in such a case ? Which banks and brokerages are best with this kind of "International Banking" facilities ?

Anakin

While we are at this topic -- some friends are currently trying to make some money using the dollar fluctuations in an NRI account. The idea is to deposit money considerable amount of money in the NRI account when dollar's strong (say Rs. 46 to a $) and then withdraw the same amount from the account when the dollar is weak (say Rs. 43 to a $). The moot point is that the money is stored in Rs and hence with rate at 46, say 10k$ translate to 460k Rs. When withdrawn at 43, 10k$ becomes 460k/43 = 10697$.

To think of it, it looks really lame, something that banks would definitely have some caveat on or just plain disallow it. Any ideas? Anyone tried?
Any fees I am missing? Or is it a good money making way?

Thanks!

agarpiyush said: [Q]While we are at this topic -- some friends are currently trying to make some money using the dollar fluctuations in an NRI account. The idea is to deposit money considerable amount of money in the NRI account when dollar's strong (say Rs. 46 to a $) and then withdraw the same amount from the account when the dollar is weak (say Rs. 43 to a $). The moot point is that the money is stored in Rs and hence with rate at 46, say 10k$ translate to 460k Rs. When withdrawn at 43, 10k$ becomes 460k/43 = 10697$.

To think of it, it looks really lame, something that banks would definitely have some caveat on or just plain disallow it. Any ideas? Anyone tried?
Any fees I am missing? Or is it a good money making way?

Thanks!

It is called forex trading, there are brokers you can do it at... If you think you can predict the market, go for it...

with citibank, you need to pay your interest income in US tax.

with ICICI, tax in India with NRI excepmt

RadagastMOD said: [Q]agarpiyush said: [Q]While we are at this topic -- some friends are currently trying to make some money using the dollar fluctuations in an NRI account. The idea is to deposit money considerable amount of money in the NRI account when dollar's strong (say Rs. 46 to a $) and then withdraw the same amount from the account when the dollar is weak (say Rs. 43 to a $). The moot point is that the money is stored in Rs and hence with rate at 46, say 10k$ translate to 460k Rs. When withdrawn at 43, 10k$ becomes 460k/43 = 10697$.

To think of it, it looks really lame, something that banks would definitely have some caveat on or just plain disallow it. Any ideas? Anyone tried?
Any fees I am missing? Or is it a good money making way?

Thanks!

It is called forex trading, there are brokers you can do it at... If you think you can predict the market, go for it...

Yes, if you think you can predict the market, skip all the hassle, just open a forex acct and trade. I am sure the spreads etc are much more efficient in forex trading than anything you will get by transferring in and out of bank accts (I am sure the bank has a heftier spread than a trading acct + possible fees)

In terms of money transfers, I have limited experience but here is what I have found so far.

1) Sending a check drawn against my US bank acct to India... After the bank received it in India (I mailed it to my parents and they handed it over to the bank so I know exactly when), it took them around a week to debit my US bank account of the $$. But the money did not show up in my NRO acct for almost 3-4 weeks after being debited from my US acct. I was obviously pissed as heck, but apparently this is the norm. So for that 3-4 weeks, some intermediary (or my bank) was earning the interest on my $$, which pisses me off. Also the exchange rate I received was about avg plus they have a fee (most banks will tell you the set percentage.. mine was around .5% I think)

2) HDFC quick remit service (which is powered by the timesofmoney remit2india service) - Easy process, took a few days to verify my US bank acct ( by making small test deposits/withdrawals). Then I sent the $$ to a Indian bank acct and I believe it took 3-4 days only to have the money credited to the Indian acct. Also the exchange rate was more competitive than most of the other ones I saw online. And the spread wasn't too bad on the exchange rate compared to the real rates I found online. I think on a $1000 transfer I ended up probably losing $2-$5 on the spread (but again I didnt find any better rates online, but I didn't look very hard.

3) Western Union - I used this once during an emergency, fast and relatively easy (although if I remember right, due to security concerns sending to India, they called me on the phone to verify the transfer although I did everything online). When I did this, I wasn't smart enough to check the exchange rate and spreads (i can't believe they are very good), but the fees were horrible. I think I paid almost $30 dollars in fees on a $250 transfer.

Again everything above is from memory, and mine isn't very good, a lot of these rates/fees/spreads can be found out online, just be prepared to spend a lot of time. For some reason us Indians are taking all the IT jobs, but no company can design a good website with all the clear answers up fronts. Also you will find discrepancies all over the place, where one section says something and another totally contradicts it.. Sigh..

arib0nd said: [Q]In terms of money transfers, I have limited experience but here is what I have found so far.

1) Sending a check drawn against my US bank acct to India... After the bank received it in India (I mailed it to my parents and they handed it over to the bank so I know exactly when), it took them around a week to debit my US bank account of the $$. But the money did not show up in my NRO acct for almost 3-4 weeks after being debited from my US acct. I was obviously pissed as heck, but apparently this is the norm. So for that 3-4 weeks, some intermediary (or my bank) was earning the interest on my $$, which pisses me off. Also the exchange rate I received was about avg plus they have a fee (most banks will tell you the set percentage.. mine was around .5% I think)

2) HDFC quick remit service (which is powered by the timesofmoney remit2india service) - Easy process, took a few days to verify my US bank acct ( by making small test deposits/withdrawals). Then I sent the $$ to a Indian bank acct and I believe it took 3-4 days only to have the money credited to the Indian acct. Also the exchange rate was more competitive than most of the other ones I saw online. And the spread wasn't too bad on the exchange rate compared to the real rates I found online. I think on a $1000 transfer I ended up probably losing $2-$5 on the spread (but again I didnt find any better rates online, but I didn't look very hard.

3) Western Union - I used this once during an emergency, fast and relatively easy (although if I remember right, due to security concerns sending to India, they called me on the phone to verify the transfer although I did everything online). When I did this, I wasn't smart enough to check the exchange rate and spreads (i can't believe they are very good), but the fees were horrible. I think I paid almost $30 dollars in fees on a $250 transfer.

Again everything above is from memory, and mine isn't very good, a lot of these rates/fees/spreads can be found out online, just be prepared to spend a lot of time. For some reason us Indians are taking all the IT jobs, but no company can design a good website with all the clear answers up fronts. Also you will find discrepancies all over the place, where one section says something and another totally contradicts it.. Sigh..

Thanks for writing such an informative post....

Anakin

klm123 said: [Q]with citibank, you need to pay your interest income in US tax.

with ICICI, tax in India with NRI excepmt

That's an interesting point. Is interest earned in FCNR accounts with ICICI Bank free from US govt taxation ?

If so, this would be a strong reason to put a lot of money in USD in FCNR accounts to keep the interest tax free from both USA and India.

Anakin

I have had a account with citi for few years now...but just this year ONLY did they send me a 1099-INT to file. So yes I was taxed for my interest. Mind you this never happend in earlier years.

The worst part was I got my 1099-INT after the Feb end (the last day before one should have recevied all tax documents from financial institutions) and I had filed my taxed. Just for citis INT , I had to file an ammendement and that itself was/is a pain....so there you go.


sorry but whats an FCNR account? where can i find on these various accounts info AND on NRI interest fees payable to US banks/indian banks?

sorry but i am new to usa NRI...

thanks.

What about for Non-Resident Filipinos ?
HSBC or Citi ?

aviator said: [Q]sorry but whats an FCNR account? where can i find on these various accounts info AND on NRI interest fees payable to US banks/indian banks?

sorry but i am new to usa NRI...

thanks.

ICICI FAQ
Citi FCNR

I have accounts with ICICI and Citibank (and am from HYD/Vijayawada).

Citibank - relatively easy to open, online and account open in 4 or 5 business days. ICICI - took time, requested additional documents, took about 3 weeks on the whole.
Citibank - interest rates are lower. ICICI - very good, particularly if you look at the obu (overseas bank unit CD rates). Also ATMs, ICICI is the best in that, lots of them around hyderabad and also vij.
Customer service from ICICI is OK as far as I know. Never went to citibank till now. ICICI allows you to transfer money from one internal account to another say to your parents.

Money transfer service - Simply put Citi sucks as they make a lot in exchange rate. So I use ICICI only. But as some one pointed the best rates are by Remit2India and I think you can use that service to credit your ICICI account as well (the receving account need not be HDFC). I use Money2India and it takes 5 business days exactly for your money to be in India. If you want it fast you can do a wire using money2india and they claim 48hrs, never used it.
But if you have a Wamu checking account you can send a free wire assuming there are no fees from the receving bank.

Online banking is relatively straight forward with both of them. If you have to pay bills thats also allowed. And I think both of them have investement arms if you are interested. But Citi is integrated more globally and you can easily transfer money between your citi global accounts (sometimes immediately, but you loose money in exchange).

I prefer ICICI personally becuase they have more branches and more ATMs.

Forex trading - Dont think of doing it on your NRI accounts. Take a separate forex account and time it. Remember when you buy dollar you have to pay more and when you sell dollar you get less than the exchange rate in general (most of the times) if you use your NRI account. So unless there is big difference between rates its not going to be profitable. With a forex account it is different story.

hope that is useful


I wonder if it will be advisable to actually have 2 bank accounts - one for money transfer from here to india and the other for using while in India.

Since HDFC seems to be the best in terms of money transfer etc... it lacks the retail convenience. There are not as many ATMs, service centers etc. as CITI or ICICI

So maybe a better idea will be to Open a NRI HDFC account - transfer $ to Rs.
Then when in India, open a ICICI or CITI (normal) account - Transfer Rs from HDFC to ICICI / CITI

Also, when leaving India... you can deposit Rs back to ICICI or CITI (which cannot be done in NRI account)

Good thread !!
I will share my experience. I have opened an NRE Account with SBI and I use their online service for remitting money to India. I have opened this account while I was in India so I am not sure how convinient it is to open an account online. I have also used ICICI Money transfer service to transfer money to my parents account and I would say both service are great in terms of duration of money transfer (Approx 5 days for ACH Transfer). I would say that the exchange rate is much better with SBI.

I came to know from some websites that it's not legal to hold Resident Account as an NRI. Although we all know that everything works in India..<img src="i/expressions/face-icon-small-smile.gif" border=0>

I am looking for some good FCNR Deposite rates and banks with conviniency of opening online so that I can save some tax from US Gov and still keep the money in $$ to avoid fluctation in currency rates. Any inputs will be appreciated. I was surprised to read that someone who reported that they got 1099-INT for FCNR.


Bulldawg said: [Q]I wonder if it will be advisable to actually have 2 bank accounts - one for money transfer from here to india and the other for using while in India.

Since HDFC seems to be the best in terms of money transfer etc... it lacks the retail convenience. There are not as many ATMs, service centers etc. as CITI or ICICI

So maybe a better idea will be to Open a NRI HDFC account - transfer $ to Rs.
Then when in India, open a ICICI or CITI (normal) account - Transfer Rs from HDFC to ICICI / CITI

Also, when leaving India... you can deposit Rs back to ICICI or CITI (which cannot be done in NRI account)

BullDawg, the HDFC quickremit (which is powered by timesofmoney remit2india, does not require you to have a HDFC bank acct. So if the only reason you want HDFC for transferring money using that service, you can just go to HDFC's website and create a quickremit account. It will probably take a total of 5 business days to get setup and your accounts verified.
And as others have said, it takes around 3-5 business days to ACH the money from any US bank account to (almost) any Indian bank account.

Beware of ICICI Bank.

If you have to convert your resident saving a/c to NRO a/c make sure there is only a minimum balance left in it.

In my case I had a significant balance and during the conversion process they took all my check leaves and old debit card and told me that the signature in the conversion letter doesnít match, Since then in the past 2 months I have sent 3 requests with signature authorized by Notary Public and sent it to their US PO Box address which they say never received and there is no tracking since it is a PO Box. Now it looks like I have to send the request directly to their Mumbai address in an overseas courier with signature confirmation.

If this the safety of the US PO Box (Where the doc's could be sent instead of sending it to India), what is the safety of the personal info being sent there?

Now my money is locked up for months and they are refusing to issue a new Debit Card as I have initiated an NRO conversion process on that a/c. For an extra 50 ps of exchange rate I donít want to take chances with ICICI any more instead I will better deal with a nationalized bank like SBI. For now I have to get my money out of ICICI.

I am thinking of opening a Rupee based NRE A/C with Citibank. Since it is a US Based bank, for the interest earnings it looks like they would send the Form 1099 to IRS. Do I have to pay tax or show it in the tax returns on those interest earnings? Please advice

Yes You have to pay tax if u are not a Student in F1 or J1 visa catagory

Any interest earned on deposits in India (or anywhere else) is taxable in the US if you are considered a resident for tax purposes here. It is a different matter that they might not find out if the bank does not issue a 1099-INT.
But, *you* are responsible for paying all your taxes and if the IRS/state tax board somehow finds out about this additional unreported income you will be subject to penalties and interest on the amount not paid.

My horrow stories of Citibank NRI account. They have never been able to match the signatures and always the money is stuck. We had to talk to them for 3 months to make the change in the name.

I hate CitiNRI service and then there is a discriminatory statement in their application form which in Civil world should let CEO to be jailed.

Are you a Senior Public Figure or Related to One. (e.g. Dr. Manmohan Singh).

I am reseraching options and I came across this thread and thought of ranting.



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