Additional Financial Services for NRIs in Canada

Non-Resident Indian, or NRI, designates an Indian citizen or person of Indian origin who stays abroad for more than 182 days in a year. They play a big role in bolstering India’s economy through inward remittances back to India, which account for almost 3% of the GDP. Their significance was also captured by the International Organization for Migration’s (IOM) World Migration Report 2024, which revealed that India received over $111.22 billion in remittances in 2022- the first ever country to reach such remittance figures. In the context of NRIs, Canada is one such country that hosts a sizeable Indian diaspora, including over 1 million NRIs, according to the Government of India’s Ministry of External Affairs. Given their presence and need to carve out a life away from home, NRIs often look to Canadian financial services that cater specifically to their unique needs, including managing finances across two countries, remitting money back home, and investing in India. Canadian banks have recognized this growing market and have tailored their offerings for NRIs to efficiently manage their financial affairs. This article looks at some of the key financial services Canadian banks provide to NRIs.

NRI Accounts

Many prominent Banks, such as SBI Canada Bank and Standard Chartered, offer specialized NRI accounts that cater to the specific banking needs of NRIs. We’ll cover the most popular options, including the Non-Resident External (NRE) accounts, Non-Resident Ordinary (NRO) accounts, and Foreign Currency Non-Resident (FCNR) accounts.

• NRE Accounts: These are rupee-denominated accounts that allow NRIs to remit foreign earnings to India. The principal and interest earned on these accounts are fully repatriable and tax-free in India.
• NRO Accounts: NRIs can deposit their income earned in India into NRO accounts with interest rates linked to the Indian domestic deposit rate. While the interest earned is taxable in India, it offers a convenient way to manage Indian income.
• FCNR Accounts: These accounts allow NRIs to deposit their foreign currency earnings into Indian banks without converting them into rupees. The interest earned on FCNR accounts is also tax-free, and the principal is repatriable.

Remittance Services

Remittance services are among the most sought-after financial services for NRIs. Many Canadian banks have picked up on this trend and provide secure, fast, and cost-effective ways for NRIs to send money back to India. For example, Banks like the ICICI Bank offer preferential exchange rates when transferring to an NRI savings account in India- maximizing the value of remittances. Many Canadian banks provide direct remittance services at competitive exchange rates, often through online platforms or mobile apps that allow NRIs to initiate remittances from the comfort of their homes.

Investment Opportunities

NRIs may often look for opportunities to invest in Indian markets while residing in Canada. Hence, Canadian banks, in collaboration with Indian financial institutions, frequently provide various investment options that allow NRIs to invest in Indian mutual funds, fixed deposits, and real estate investments. An example is the HDFC Bank’s various investment options for Canadian NRIs, including mutual funds, offshore investments, and real estate. The bank also simplifies investment and allows transactions through NRE/NRO accounts.

Loans and Mortgages

NRIs can access many tailored loan products from banks like ICICI Bank and SBI, including home loans for purchasing property in India, personal loans, and education loans for children studying in India or Canada at preferential rates.

Wealth Management

The prominence of NRIs today means that there are exclusive Wealth management services tailored to help NRIs plan and manage their financial future. These services include portfolio management for NRIs, estate planning, and retirement planning.

Insurance Services

Many prominent Banks in Canada and India offer a range of insurance products tailored to NRIs, including life insurance, health insurance, and travel insurance. These products provide peace of mind, knowing that both they and their families are protected in Canada and India. NRIs can purchase life insurance policies in India through their NRI accounts, ensuring their families are financially secure in case of unforeseen events- an example being the ICICI Prudential Life insurance policies.

Conclusion

In conclusion, Banks have recognized the unique financial needs of NRIs and have developed a comprehensive range of services to meet these needs. From NRI accounts and remittance services to investment opportunities, loans, and wealth management, these services provide NRIs with the tools and resources to manage their finances effectively. As the NRI population in Canada continues to grow, the range and quality of these financial services are likely to expand, offering even more tailored and improved solutions for this vital demographic.