5 smart financial steps to take before settling overseas
Are you settling overseas as a permanent NRI (Non-Resident Indian) within a few months? What have been in your to-do list? Packing the backpacks, getting the visa, last moment shoppings, meeting your relatives and friends - the list is often so long that we tend to overlook a very important sector. Yes, your personal finance is something that must be taken care of properly before you become an NRI, because you can never do those good things again. Once you settle permanently, these little financial jobs might become impossible or impermissible to do, or might involve colossal paperworks. Pay a little attention today to save a lot of troubles tomorrow! Here are five very important financial steps every Indian should take before permanently settling down in another country.
Remember to take your term and health insurances
Term and health insurances are something that every individual must take, are not they? If you have to take them, take them now before becoming a non resident. Once you leave India, getting insured by an Indian insurance company will be a mammoth paperwork. Once you relocate it is difficult to get an offline term insurance plan; you have to go for online term plans which means trouble. You must also visit India in person for the necessary health check ups and other procedures that might follow. The same applies for health insurances as well. If you take your term and health insurances while in India, you will save a lot of hassles and possibly some money as well. As far as I know, term insurance premiums for non resident Indians for Indian insurance companies are often relatively higher. This is a mandatory financial work before moving overseas as an NRI.
Open your Public Provident Fund
Did you know that the Public Provident Fund is exclusively for Indian nationals living in India? A non resident Indian is not permitted to open a fresh Public Profident Fund account so it is advisable to open one to harvest future benefits. Yes, if you open a PPF account while still in India, you can enjoy the benefits just like a resident Indian even after permanently settling abroad. Nevertheless, once you relocate, you are not allowed to create a fresh PPF account as already mentioned. A PPF account can be opened in post offices or with State Bank of India (SBI) and ICICI bank branches.
Store your mutual funds in the ether!
In plain words, go online for mutual funds investments. It is not a smart idea to shut all your mutual funds investments in India down abruptly only because you are moving abroad. These days, it is possible for non resident Indians to invest in Indian mutual funds; but transacting offline includes lots of procedural troubles. If you take your mutual funds online while still in India, you can access them and stay invested from any part of the world that has an Internet connection. You can open online accounts with the AMCs of the mutual funds concerned; but I would advise you to open an account with FundsIndia instead to conveniently manage all of your mutual funds through one dashboard.
Your old demat account will not be valid overseas
Yes, you read it correctly. Your old demat account for trading shares in India (if any) will not be accessible any longer after you move overseas. If you had invested in shares, it is time to sell them irrespective of their performances. Sell off your existing demat account shares; you will be allowed to create a new one (NRI demat account) as you migrate.
Open an NRE account
If you want to repatriate your Indian investments, an NRE account is mandatory. Thus, if you want to invest in fixed deposits or recurring deposits in Indian banks, and want the fruits of your investments back in your residing country, you must open an NRE account. These days, most Indian nationalized public sector banks are offering handsome interest rates for non resident Indians, so I would consider opening an NRE account is a compulsory financial step to take before becoming a diaspora.
I proposed to talk about 5 financial steps to take before moving overseas, but here is a sixth one that applies to all of your mutual funds investments, bank deposits and insurances. Do update your KYC. Making sure that all your investments are KYC compliant will save an unnecessary flight back to India, coupled with enormous hassles. Yes, settling overseas is often an exciting time we all look forward to, or a pensive compulsion to be separated from the friends and the family; but do not allow excitement or grief anyway make you forget these compulsory financial tasks to complete before relocating. Bon voyage!
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