Opening Foreign bank account & its benefits, fee, charges
Opening an international bank account is highly recommendable if you travel abroad frequently or have a property there. Many banks open international account with their own fees and charges. Foreign bank account advantages are also unlimited.
Bank account in any foreign country is required and useful for many purposes. You may need a foreign bank account for many purposes, like if you have purchased any property in abroad or want to lend it, and then you need a foreign bank account for the purpose of rent deposit. Other than this, foreign bank account is of great use if you travel abroad at short intervals or stay there for few days or if you or your dependent is studying there.
To open a bank account in abroad, you need to be physically present there. But your age must be at least 18 years. You have to keep money in foreign account in local currency, dollar, pound or euro. Since the money will be in foreign currency, thus it will be affected by exchange rate fluctuations at the time of your money back to India. Selection of foreign bank account
You can open a foreign (local) currency account abroad. Under Liberalized Remittance Scheme (LRS), you can deposit up to 2 lakh dollars (Rs. 90 lakhs) in a financial year. This limit includes the transactions from both current and capital account. You can open savings account, current account, term deposit etc. as per your requirement.
You can also open an offshore account in international bank like HSBC, City bank, Deutsche Bank, etc. You just need a copy of your latest income tax return. Such international bank account in abroad will not be connected to your national bank account.
You also have the option to open a checking account in any Indian bank. Most of the large scale Indian banks are also in countries like America, Britain, Singapore, Hong Kong, Dubai, etc. some of such banks have branches in other countries while others have their representative offices. Most of such banks permit you to open a checking bank account so that you can make payments in abroad. Checking account is a kind of current account in which you can withdraw or deposit money in your account through check and ATM. Checking account is different from other accounts as there is no limit on number of withdrawals and deposits in the account, whereas sometimes savings account has a limit on number of deposits and withdrawals.
You can also open a local bank in the country where you want to make investment. It has the benefit that your money will be in local currency. And if you are not in instant need of money then you can wait for the favorable exchange rate. Another bank of local bank in abroad is that the bank possesses more knowledge of rules and regulations of that country in such a case. How to open foreign bank account
To opening a foreign bank account, you have to follow following steps:
1. Contact your bank centre:
Contact the overseas booking centre of your bank. Relationship manager can help you for this purpose.
2. Deposit of documents:
You need to deposit some documents to open bank account in abroad. Required documents are residential proof, latest income tax return and the proof that the entire amount which you will deposit in your bank account shall be earned by legal means only. Some foreign banks also demand letter of reference from local bank.
3. Opening of account:
Overseas branch will verify your portfolio. Some banks lay emphasis to deposit a minimum amount in the bank such as you have to deposit at least Rs. 3 lakhs in HSBC India. this amount could be an aggregate of savings account balance and investments. If your application gets approved, then you just need to fill up a deposit slip and your account will be activated.
4. Minimum balance:
Money will transfer in your foreign bank account through your local bank account. You have to keep a minimum amount in your international bank ac and investments. This amount is Rs. 25,000 pounds (Rs. 18.86 lakhs) in case of HSBC bank international account.
5. Investment:
Bank can help you if you want to do investment in abroad. For example, if you want to purchase a property in Russia, then bank will provide you the contact details of such a broker who will be having a tie-up with the bank. Fees and charges of foreign bank account
The fees of the banks may vary according to the location in the country. Here is the list of HSBC advance account of HSBC international.
a.) Monthly fees: £ 15 (Rs. 1131)
b.) Under funding fees (for each month when your relationship balance is less than £ 25000 or Rs. 18.86 lakh) : £ 10 (Rs. 755)
c.) Stopped check payment excluding the lost or theft checks: £ 10 (Rs. 755)
d.) Each statement for more than once in a year: £ 1 (Rs. 75.5)
e.) Fund transfer charge in case of bank account in some other bank: £ 20 (Rs. 1509)Benefits & facilities of foreign bank account
1. Phone and Internet banking:
You get round the clock facility through phone and internet. You can also get information of statements and deposited amount in your foreign account though net banking.
2. Daily banking:
You can withdraw money from any of the worldwide available ATMs of the bank. You don't have to pay any transaction fees for this. But if you withdraw any such currency which is not the currency of your account (like you deposit money in INR and withdraw it in dollars), then you have to pay 2.5% conversion fees along with the foreign exchange rate.
3. Fund transfer:
You can transfer funds easily in your accounts. You must have the knowledge of International Bank Account Number (IBAN) for this purpose. It's better if you know Swift number as it makes process faster. However, you have to pay fees for each transfer.
4. Credit and Debit card:
You get a debit/ credit card from bank in international currency (dollar or pound).