If you maintain a bank account in an institution not located within the territorial boundary of your residence country, such a bank account comes under the category of an overseas bank account. An overseas bank account is also called an offshore bank account. It is important to know the various charges apart from the eligibility criteria before you open an overseas bank account. So, if you are a senior citizen and planning to open an overseas bank account, here are some important points that you need to be aware of.

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Overseas Bank Accounts And Variants

“Overseas bank accounts are typically used for managing finances abroad, including transactions and savings in foreign currencies. Depending on its use, such as for savings, investments, and transactions in foreign currencies, overseas bank accounts can be of different types such as NRE (Non-Resident External), NRO (Non-Resident Ordinary), and FCNR (Foreign Currency Non-Resident) accounts”, says Adhil Shetty, CEO, BankBazaar.com.

Experts point out that a senior citizen with NRI status can open an overseas bank account in India. Having an overseas account in India can help such senior NRIs get access to various investment instruments and perform multi-currency transactions. An overseas bank account can help seniors to get a loan from the banks in India. Overseas bank accounts can also be used to purchase properties or assets in other countries.

Things To Keep In Mind When You Plan When You Plan To Open Account

“Maintaining an overseas bank account typically involves charges such as monthly maintenance fees, transaction fees, and charges for converting currency. The exact fees will depend on the bank and the type of account held. Make sure to review the fee structure carefully to understand all potential costs before you open an overseas account”, adds Adhil Shetty.

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Here are some important points to keep in mind when you plan to open an overseas bank account:

• Understand the Fee Structure: Before opening an account, make a note of all the charges involved, including transaction and maintenance fees.
• Stay Informed About Regulatory Requirements: Be aware of the regulatory requirements in both India and the country where the account is held, especially for tax implications.
• Choose the Right Account Type: Select the right account type based on your financial needs and goals and consider factors like currency, ease of access, and investment options while making a decision.

This type of account can be useful if you live abroad and have assets in India. It can be used for purposes such as investments, receiving maturity amounts of investments and getting the proceeds from the sale of assets in India. If you are looking to invest in an Indian property or other asset class and are not concerned about repatriation, you may choose an NRO account. However, if you need a free repatriation of money then you may go for an NRE account. As a non-resident, if you want to park your fund in an Indian bank in a foreign currency, you can do so through an FCNR account and also earn a decent interest on your fund.

Seniors get various bank account options in India, depending on their needs they may choose the appropriate account type.

The author is an independent financial journalist.