Today, it is common for people who have the opportunity to enhance their income, working in abroad thanks to recently appreciate dollar in terms of Indian rupee. Before moving abroad, there are certain aspects that you must see and to do home work to keep your existing finances in order. Because, it is very difficult to handle and manage same in India from abroad, as most banks, brokerage firms and insurers do not have functional online services. In this respect, you must know what you should do to organise your financial portfolio at home before leaving the country.
Convert your Saving Account into NRO Account
Before leaving India, you should to get your saving account converted into Non-resident ordinary (NRO) account where you, being a non-resident Indian (NRI) can deposit your Indian income such as rent, dividend and pension into NRO accounts and make payments. To get earn higher interest, you can check the offer of a sweep-in facility with your bank, under which any amount above a threshold is put into a fixed deposit from your bank. In this way, you can earn higher interest than from the saving account.
Open a non-resident external (NRE) Account
It is like a domestic saving bank account, called as external saving account for NRIs. Being an external saving account, you can transfer your funds freely between India and the country where you plan to live. This account would help you to invest your money earned abroad in India and get this money back after some time. It means money deposited can be taken outside the country as the money is fully repatriable and its interest earned on money in NRE account is not taxed in India.
If you want to invest in Indian Stock markets, you should open a portfolio investment schemes (PIS) of the Reserve Bank of India (RBI), where you can trade, buy and sell stocks in Indian equities but not mutual funds.
Organise your Insurance Policies
While moving abroad, you must review your existing life and health insurance policies. In case you have endowment plans, one can continue the policy and set the auto debit mode in your bank account so that premium payments get automatically paid on its due date. However, you must check your term insurance plans with your insurer which may provide the cover in the country where you are relocating to. If not, you should surrender the policy and buy a fresh term plan abroad.
Similarly, it is best to surrender the existing health insurance policy and buy a new one in the country where you are moving. Health and medical care regulations vary from country to country. Read also: How many life insurance policies should you have?
Maintain your domestic credit score
In some countries, a prospective employee’s credit report is part of a background check during recruitment, keep in mind that you need to clear all your financial dues such as pay off credit card dues and surrender the cards, make arrangements for loan repayments and inform your bank that you are moving abroad and update your new communication address as soon as possible. To maintain good credit report, you should keep track of your credit history in India, even when you are abroad, it can access your credit report and score online.
Assign the authority on your behalf
You should make sure that all your financial data like credit and ATM cards, user name and passwords keep secure and assign trustworthy person like father the authority to sign on your behalf preferably on a registered stamp paper so that one can be assessed at a later date. Also make arrangements with bank or with people who might stay behind regarding physical bank statements and credit card bills, otherwise you must activate email options for these.
Nominate your Financial Assets
A nominee is important as in the event of any unfortunate incident the fate of your financial assets will be uncertain in the absence of any person who can lay claim to them. You should make sure that all your financial assets have tagged with nominee. Read: What will happen to your wealth, After you?
Finally, before the flight, always consider the real cost of moving and living abroad while evaluating your expenditure. The expenses that will arise before moving out relate to visa, legal clearance, long-distance shipping and travelling. After reaching your destination, you may have to make big-ticket purchase such as cars and furniture too.
Last but by no means least, it is essential to consider in securing an emergency fund which should not less than be six-seven months of living expenses.
Suresh Kumar Narula is founder and Principal Financial Planner at Prudent Financial Planners. He has earned the professional CERITIFIED FINANCIAL PLANNER and got registered with SEBI as Investment Advisor. He writes on personal and financial planning articles and got published in Dainik Bhaskar, Business Bhaskar and The Financial Planner’s Guild, India. He is also a member of Financial Planner’s Guild India ( An association of practicing SEBI registered Investment advisers) to create awareness about Financial Planning in general public, promote professional excellence and ensure high quality practice standards. Suresh received his an M.com from Himachal Pardesh University and an MFC from Punjab University, Chandigarh. He can be reached at info@prudentfp.in