Non- resident Indian (NRI) is an Indian staying outside the home country. To become an NRI is a dream of many people, while for others it is just going with the flow of wind. Anyways, whatever set of reasons you carry with yourself to settle abroad, there are few things that you need to do before you become an NRI.
1) Opt for a good term insurance and health insurance plan
Before becoming an NRI it is a most recommended option to take up term insurance and a health insurance policy. Once you become an NRI and visits back India, it will be extremely difficult to comply for the formalities to get these two things done. There will be more documentation, more hassles and formalities and may even cost you more.
2) Secure your future by opening a PPF account
Before leaving, get this thing done because an NRI can keep investing money in his existing PPF account. The option is lucrative as when you will return and settle again in India, after few years you will be having additional money.
3) Arrange for NRO account and link your loan account with your bank account
You don’t have to put lot of efforts in to this. Just take your 2 passport size photographs, a copy of passport and visa and request your bank to convert your existing savings account to NRO account. The benefit of having NRO account is that you can deposit your Indian income in this account and can enter into transactions like EMIs for your loans, investments, etc. Even if you skip to open NRO account, you will have to do it later. In addition, don’t forget to link your loan account, if any with your bank account before leaving. Doing this will aid you in making payments towards your EMI through NEFT.
4) Make a Power of Attorney
In your absence, there will be lot of things that may require your presence, for example – sale or purchase of real estate, bank account operations, etc. However, not everybody is required to enter into such transactions. Weight the possibilities and if you feel the requirement, then it is advisable to make a revocable power of attorney on the name of any trusted member of your family who can deal with things on your behalf.
5) Open an Online Mutual funds Account
One of friends is in habit of investing in mutual funds. He became NRI and now he is facing problems in investing in these funds. If you are one of them who want to continue their investments in mutual funds even after becoming NRI, then it is better if you open an online account with the mutual fund’s AMC.
6) Open NRE account
This account will be useful if you expect that you will be investing your earnings in India and would like to repatriate it back to the foreign account you are going to stay in. You can deposit your interest from fixed deposits, rental incomes, etc. in this account. In fact most of NRIs choose to invest in India, being their home country.
7) Open a NRI demat account
If you are possessing shares and are already in the process of becoming NRI, then you are left with two options related to your shares. One, sell all your shares and get your money back. Two, in case you want to keep your existing shares as it is with yourself and want to trade in future as well, then it is better to open NRI demat account and transfer all your existing shares from your demat account to this account. Why you have to open a NRI demat account? Because, once you become NRI, you will not be able to transact from your existing demat account.
8) Complete all the formalities related to your KYC
By now, you must have understood that there are different financial products/ accounts and procedures for residents and NRIs. Therefore, before becoming an NRI, you should complete all the formalities related to KYC documents for your old as well as new accounts. This will smooth your transactions with banks, mutual funds, etc. in future and will save you from unnecessary botherations.
Complete your tasks before you leave India and enjoy your stay abroad.