NRIs Joint account with resident Indian was not possible till 2011. But now Non-Resident Indians can also operate a resident savings bank account in India on an ‘either-or ‘survivor’ basis with a resident – resident can also be a joint holder in an NRO account.
For example, a son who works abroad can open a joint bank account with his mother who is a resident. This bank account would be a residential savings bank or NRO account.
But still, it’s illegal for an NRI to hold a resident savings account as a single holder – there’s a penalty.
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Can NRI open Joint Account with resident Indian?
Key conditions :
- The joint account can be between a Non-Resident Indian and his/her resident relative. The relative includes – parents, siblings, siblings’ spouses, own spouse, children, spouses of children, grandparents, grandchildren, spouses of grandchildren.
- The accounts will be subjected to all rules and regulations applicable to a resident bank account.
- The bank should keep the relevant documentation in place, record the need for the account and also get a signed declaration from the non-resident account holder indicating that the Non-Resident Indian will not use the cash in violation of FEMA and is responsible for any repercussions in case there is a violation of FEMA.
- The NRI cannot deposit any money in the form of cash, cheque, direct credit, or remittances received in this account.
- Money cannot be transferred outside India, nor can be given as a gift. The funds cannot be transferred to NRE/NRO accounts.
- The resident Indian will be the primary/first account holder in the joint account. The NRI will be the second holder.
- It can be used to facilitate payments in India by the resident holder.
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NRI can be a joint holder in more than one savings account but only with close relatives. If due to any circumstance, the NRI holder becomes the survivor that savings account shall be categorised as NRO. wiseNRI
NRIs can open other types of accounts in India for transaction purposes. These include NRE, NRO, or FCNR accounts. NRE and NRO accounts can either be savings, or fixed deposit accounts. The FCNR is only a term deposit account.
Here are answers to some commonly asked questions –
How to open an NRI joint account with resident Indian?
Savings, Current, and Fixed Deposit accounts opened by resident individuals can have an NRI who is a close relative as a joint account holder. The account holders should file a declaration of the status of the NRI and submit the necessary documentation as per the bank’s requirements.
NRO Joint account with Resident Indian- is it possible?
Yes, the NRO account can be jointly held with resident Indians – but this account can’t be “either or survivor” – it should compulsorily be “former or survivor”.
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Can an NRI open a resident savings account?
NRIs cannot open resident accounts. After their status changes to ‘NRI, they have to close the resident accounts. They can open and operate any of the following accounts –
- Non-Resident Rupee (NRE )
- Foreign Currency Non-resident (FCNR )
- Non-Resident Ordinary Rupee Scheme (NRO ) and
- Special Non-resident Rupee (SNRR) (for business)
- NRIs can operate resident bank accounts on an “either-or survivor” basis with a resident Indian.
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How to convert resident account to NRI account?
A resident savings bank account can be converted to an NRO account. The steps are as follows –
- Inform the bank that your residency status will be changed.
- Get and complete form for conversion of resident account to NRO account.
- Get documentation required such as KYC, Visa permit, passport, etc in place
- Submit all relevant documentation.
- Bank will verify the details and if approved will redesignate the status of the resident account to an NRO account
How to convert NRI account to resident account?
The NRI has to file a declaration stating that he is returning back to India and would be a resident Indian. The declaration should ask for re-designation of the NRO account to the Resident Savings account and be submitted to the local branch of the bank.
If you have any questions or if you would like to share your experience with other readers – please add them in the comment section.