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Key Takeaways
- NRE accounts are ideal for investing foreign income
- The sums deposited are converted to INR
- You can deposit cash in RBI-accepted foreign currencies
- Keep in mind the permissible credits before investing your money
- Other than cash, deposits in the form of traveller's cheques, drafts, etc., are also permitted
Introduction
As an Indian living away from home, chances are you may have some lingering ties to India, in the form of family members, bank accounts, investments, property and more. But no matter what corner of the world you are in, you can meet your financial obligations with NRI accounts. As such, you should be up to date with the changing policies for NRI bank accounts. As an NRE account holder, you should know the cash deposit limit in NRE accounts and the types of credits permitted.
Can I deposit cash in my NRE account?
Yes, you can deposit cash in your NRE account, provided the deposits are in specific foreign currencies, as permitted by the RBI. Since the NRE account is rupee-dominated, the deposits are converted to INR. And while there isn't any specific NRE account deposit limit, you cannot deposit cash in INR into your NRE account.
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Permissible Credits in the NRE Account
While there is no restriction on the NRE account limit, only a few specific types of credits are allowed. These include:
- Inward remittances from other foreign currencies, as permitted by the RBI.
- Interest accruing on the funds deposited in the account.
- Fund transfers from other NRE and/or FCNR accounts.
- Proceeds of personal cheques drawn on the account holder's foreign currency accounts
- Bank drafts payable in permitted currencies, including instruments expressed in INR, which may be deposited when the NRE visits India. Account-holders intending to deposit INR instruments should provide proof of their NRI status to make the deposit.
- Foreign currency notes and traveller's cheques issued outside India. Suppose the total value of the foreign currency notes deposited into the NRE account exceeds USD 5000 (or its equivalent). In that case, they must declare the same to the Customs Authorities by filling a Currency Declaration Form upon arriving in India. The same rule applies if the total value of the foreign currency and traveller's cheques exceeds USD 10,000 or its equivalent.
- Current income such as rent, pension, dividend, interest etc. or those credits that have not lost repatriable character may be considered permissible credits to the NRE account.
Final Note
NRE accounts are the perfect option for people looking to save their foreign income into a rupee-dominated account. And while there is no cash deposit limit in NRE account, it helps to stay aware of the changing policies regarding deposit limits, permissible credits and debits, and other RBI regulations.
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*Disclaimer: This article is published purely from an information perspective and it should not be deduced that the offering is available from DBS Bank India Limited or in partnership with any of its channel partners.
The purpose of this blog is not to provide advice but to provide information. Sound professional advice should be taken before making any investment decisions. The bank will not be responsible for any tax loss/other loss suffered by a person acting on the above.
I'm an enthusiast with extensive knowledge about NRE (Non-Resident External) accounts in India, specifically regarding cash deposits and permissible credits. I have a deep understanding of the Reserve Bank of India (RBI) regulations and policies related to NRE accounts. Let's dive into the concepts used in the article you provided:
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NRE Accounts (Non-Resident External Accounts): NRE accounts are bank accounts in India designed for Non-Resident Indians (NRIs) to park and manage their foreign income in Indian Rupees (INR). These accounts offer several advantages, including tax-free interest and full repatriability of funds.
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Cash Deposit in NRE Accounts: The article explains that cash can be deposited into an NRE account, but there are specific conditions. The deposits must be in specific foreign currencies allowed by the RBI since NRE accounts are rupee-denominated. Cash deposits in INR are not permitted in NRE accounts.
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Permissible Credits: The article outlines the types of credits allowed in an NRE account. These include:
- Inward remittances from other foreign currencies as permitted by the RBI.
- Interest earned on the funds deposited in the NRE account.
- Fund transfers from other NRE and/or FCNR (Foreign Currency Non-Resident) accounts.
- Proceeds of personal cheques drawn on the account holder's foreign currency accounts.
- Bank drafts payable in permitted currencies, including instruments expressed in INR, with proof of NRI status.
- Foreign currency notes and traveler's cheques issued outside India with specific reporting requirements.
- Current income such as rent, pension, dividend, and interest, as long as they have not lost their repatriable character.
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Reporting Requirements: The article mentions that if the total value of foreign currency notes deposited into the NRE account exceeds USD 5000 (or its equivalent), it must be declared to Customs Authorities by filling a Currency Declaration Form upon arriving in India. The same rule applies if the total value of foreign currency and traveler's cheques exceeds USD 10,000 or its equivalent.
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Regulatory Awareness: The article emphasizes the importance of staying informed about changing policies, deposit limits, permissible credits, debits, and other RBI regulations related to NRE accounts. This awareness is crucial for NRI account holders to manage their finances effectively.
In summary, NRE accounts are a valuable financial tool for NRIs to manage their foreign income in India. Cash can be deposited in NRE accounts, but it must be in specific foreign currencies. Understanding the permissible credits and staying aware of RBI regulations is essential for NRE account holders to make informed financial decisions.
