Things That Needs To Be Taken Care of Before Becoming An NRI

In this article, we have tried to cover those points which are required to be followed by an individual, while becoming an NRI which could have saved them from lots of worries and paperwork.

Things to Complete Before You Become an NRI and Leave India

• Give power of attorney to someone in India – There can be many things which require your presence in India after you have become an NRI, like if you want to make any real estate transaction or want to operate your bank account etc. It’s always a good idea to have a bit of foresight and see if you might want to prepare a power of attorney. Power of attorney is a legal way of giving power to someone to act on your behalf. Just choose some trusted family person or a friend. You can also make a power of attorney which expires at some stipulated time.

• Open NRE Account If You May Have Substantial Repatriation Requirements – If you want to invest your earnings into India and want to get it back in the foreign country (repatriation), then you would need a NRE account. You cannot deposit the local money like interest from FD, rental income etc into the NRE account. So if you have this kind of requirement, then better open a NRE account. The Fixed Deposits rates on NRE accounts are quite attractive in Indian Banks.

• Obtain a Term Insurance – Issues faced by an NRI’s involves term plan through an Indian insurance company. It’s always a good plan to take a term plan and then leave the country, otherwise later it gets really difficult to get a term plan, for which you would need to have visit India and also gets quite difficult to opt for online term plan.So before you become a NRI (Non Resident Indian), complete this step. The premiums you will pay will be lower.

• Connect Your Loan Account With Your Banking Account For Online Payment – A lot of people who become NRI (Non Resident Indian), have a home loan running, for which they have to still pay EMI’s. At times, they want to prepay home loan as fast as possible, because they earn more money outside India. But then the issue is – how to make prepayment when they are outside India? The best option here is to connect your home loan account with your bank account, so that you can make prepayment to your home loan using NEFT transfer. It’s a good idea to do this before your leave India and try some prepayment just to make sure it works. It might happen that you might need to visit the bank for this, so better complete this before you leave India.

• It is Beneficial to have Health Insurance – Just like term plans, it’s difficult to get health insurance once you become an NRI. After becoming an NRI, you will have to visit India for health checkups and there is more documentation and hassles in the process. Health Insurance is something; you should take anyways, so why wait? Just take it anyway.

• Open PPF Account – As fresh PPF Account cannot be open by NRI, so before you become an NRI and leave India, open a PPF account. PPF account can be opened in the ICICI bank, SBI bank or at the Post office. NRI’s can always invest money in their existing PPF account which was already opened by them before leaving India.

• Convert your saving bank account into NRO account – A lot of people leave India only to realize later, that they need to open a NRO account in India, and then get into the whole process. Rather than doing it later, it is better to convert the existing saving bank account into NRO account just before leaving India. NRIs can deposit all the Indian income into their NRO account and also make payments like EMI payments, and other kind of investments from their NRO account. It will require is 2 photographs, and a copy of your passport and visa.

• KYC should be Updated – There are different processes for residents and NRIs for various kinds of financial products. Like, if you become an NRI and want to do something with banks, mutual funds, life insurance policies (traditional or ULIPs), you will first have to update your KYC and only then can you do something. So it’s always a good idea to update your KYC, before you become an NRI. This will save you with lots of hassles.

• Make your mutual funds accounts online – A lot of people still want to transact in mutual funds after they become NRI, but they have no easy way out at that time. It’s always a great idea to make sure that you open a online account for mutual fund investing while you are in India. For this, you can open an online account with the respective mutual fund AMC’s or the best thing you can do is to open account with Funds India. They support Indian as well as NRI investors.

• Close your existing demat account, open an NRO demat account – You will not be able to sell off your existing demat account shares which you bought before, once you become an NRI. You can open & operate a NRI demat account. So before you become an NRI, it is better to sell off the existing shares and take back the money or open a NRI demat account and transfer your existing stocks to this new account.

If you follow these before you become an NRI, you will enjoy a peaceful time abroad and will not have to get involved into the mess of carrying out the things, most NRIs miss. You might be excited to go abroad, better not to miss out on these points.