You can open NRE savings account at private as well as a host of PSU banks. The average monthly balance that you have to maintain at NRE savings account in most of the private sector banks is Rs. 10,000. You must be very careful in maintaining this balance as banks like HDFC Bank charge a penalty fee in case you fail to maintain the same.
If the balance dips below the stipulated amount and is in between Rs. 5,000 to Rs.10,000 you have to pay a penalty of Rs. 250 per month. If it dips further below Rs. 5,000 then a penalty fee of Rs. 350 will be levied every month.
However, if you open an NRE account in a public sector bank like State Bank of India then the monthly average balance you have to maintain is only Rs. 1,000. So, its better to open an account in public sector banks as you can maintain the account by keeping a nominal amount which is much lesser than the private sector banks.
State Bank of India has recently revised its requirements for maintaining the average quarterly balance. It is possible that the requirements are also applicable for NRE accounts. HDFC Bank at the moment seeks an average quartrely balance of Rs 10,000 in the NRE savings account. ICICI Bank also requires an individual to maintain an average quarterly balance of Rs 10,000 in the NRE savings Account. It is important to note that there are no taxes that are applicable for the balance in the NRE account. It is better to maintain larger balances in the NRE account rather than the savings account.
Documents needed to open NRE account
To open an NRE account the applicant must fill the NRE and the following documents must be submitted:
1. Photocopy of the pages of passport containing details like personal and passport details.
2. Copy of valid visa or work permit.
3. One passport photograph of the applicant.
4. One document for address proof (either overseas address or address in India). The address must match the address entered in the form.
Eligibility for opening the account
If you are a non-resident individual of Indian nationality or Indian origin then you can open an NRE savings account.
Click to read 4 risk free investment options for NRIs.
You have to remember the average monthly balance you are required to keep in your NRE account. It's better if you check the balance from time to time and ensure it does not dip from the minimum balance required.