How to open a Bank account in India

How to open a bank account in India

As the fastest growing economy in the world, India is much more than a vacation destination. People are attracted to India in order to invest in its multi-sector thriving economy, work in its multi-disciplinary business landscape and to go to school as well.

In short, India is an amazing place and for those that need to move there need a bank account in order to start their financial life. Luckily, it is super easy and there are plenty of options including the ability to open an account in a foreign currency such as Euros or US Dollars. Here is our guide on how to open a bank account in India.

Documents needed to open a bank account in India

You will be required to prove your identity when opening a account and you will also be required to present proof of residence regardless if you are a resident or a non-resident. It should be easy regardless.

For non-residents:

Passport
Utility bill or government correspondence
Bank statements

For residents:

Utility Bill or Bank statement as proof of address
Aadahaar Card
Some banks will accept a PAN Card

Can I open a bank account in India as a non-resident?

Yes, and it is as easy as selecting a type of account and you aren't even required to have many types of documents with you. See the types of accounts below and choose what you need. For example with a "small account" all you need is a passport.

Types of accounts

As previously mentioned, there is a few options available to you as a non-resident and you need to understand these options properly in order to make a sound decision

Non-resident external account: this is the normal account and you can use it as much as you want including for international transfers. Accounts usually come with a debit card which is handy if you are looking for way to keep your money safe and be able to take cash out when you want. There is no taxation on interest earned.
Non-resident ordinary account: this account is in rupees and it is more suited for those staying long in India and it can only opened for a maximum of 6 months. This is an account that if you are working in India for a short period you will be required to deposit into it and any interest you earn will be taxed accordingly. There are limits on how much you can transfer back home.
Foreign currency non-resident account: this is an account that is only in a foreign currency and it is useful if you are using dollars or euros a lot during your stay. This accounts pays regular interest.
Small account: without any proof of address at all, you can open a small account. It has a limit or 50 thousand rupees, you cannot deposit more than 1 million over the course of a year and most importantly you cannot take out more than 10 thousand rupees per month.

Best banks in India

As you know, India is a large country and so are its banks. The market are dominated by the largest banks namely the State Bank of India, ICICI Bank, Punjab National Bank and Canara Bank. These are fairly normal banks with pretty good service and a decent selection of perks. If you require more custom banking, there are dozens of other options to choose from but these should take care of the needs of most people.

State Bank of India: with over 9000 branches across India, this is a behemoth of a bank and it is all over the country. ATMs are also numerous but do not expect western type coverage. They have accounts for residents which offer good perks such as free debit card usage for a year and a lot of options for businesses and investments including accounts that you earn interest on.
ICICI Bank: with a great offer on cashback even for non-residents, this may be a good option for those in India only for a while. Special offers also include accident and air travel insurance. If you are a business or a high net worth individual, they offer tailored accounts with advice from experts. Click here to find a branch or ATM.
Punjab National Bank: as a non-resident you will have a full selection of accounts options as the other banks. As a resident the offers are better and include accounts with free debit cards and free internet banking. ATMs and branches are of course numerous and you can find them by clicking here.
Canara Bank: with basic account offers for non-residents including accounts for businesses, they will be able to serve you accordingly. They also offer an account for youths tailor made for children as an educational tool. All accounts have options for debit cards, cashback offers may be available and there are branches and ATMs everywhere.

Nationalized Banks

There are 21 Nationalized banks in India, more or less, all the banks provide the same features and pricing also stays within the same level as these banks follow the guidelines for Nationalized banks from RBI. The list of Nationalized banks in India are:

Allahabad Bank
Andhra Bank
Bank of India
Bank of Baroda
Bank of Maharashtra
Canara Bank
Central Bank of India
Corporation Bank
Dena Bank
Indian Bank
Indian Overseas Bank
IDBI Bank
Oriental Bank of Commerce
Punjab & Sindh Bank
Punjab National Bank
Syndicate Bank
UCO Bank
Union Bank of India
United Bank of India
Vijaya Bank
State Bank of India

Good Reasons to Choose a National Bank:

Minimum account balance
Penalties are lower
Demand Drafts from National Banks are accepted all over the country
Wide acceptance
Lower interest on mortgages and Loans
Cheap on Forex transfers. Better currency conversion and cheap transfer fees in comparison to private banks

Why you should have a second thought:

Lengthy queue in Nationalised banks
Less focus on customer service
Online banking infrastructure is not so good
More hierarchies

Private banks in India

Here is a list of private banks of India

The private banks in India have a different fee structure than the nationalized banks. To open a normal savings bank account with a private bank, the usual Minimum account balance stays 10000 rupees in Metropolitan cities, 5000 rupees in suburban and rural areas. The list of the private banks available in India are:

Axis Bank
Bandhan Bank
Catholic Syrian Bank
City Union Bank
DCB Bank
Dhanlaxmi Bank
Federal Bank
HDFC Bank
ICICI Bank
IDFC Bank
IndusInd Bank
Jammu and Kashmir Bank
Karnataka Bank
Karur Vysya Bank
Kotak Mahindra Bank
Lakshmi Vilas Bank
Nainital Bank
RBL Bank
South Indian Bank
Tamilnad Mercantile Bank Limited
Yes Bank
Equitas Small Finance Bank
Capital Small Finance Bank
Coastal Local Area Bank
Krishna Bhima Samruddhi Local Area Bank
Subhadra Local Area Bank
Ujjivan Small Finance Bank
Fincare Small Finance Bank

Good reason to choose a Private Bank

Customer service
Loan options are quick
Less hierarchy
More options in Banking with more sophisticated services
Personalized offers for every customer based on their credit history

Why should you have a second thought?

Even though the loan option is quick and sexy, it comes with the high rate of interest
Penalties are high to the extent they take a chunk of your salary as a penalty for maintaining a less MAB
Not widely accepted. Some Government institutions have nausea towards private banks in acceptance

Post Office Savings Account

Most of the people are not aware of the banking service provided by India post. Postal department owned by Government of India. It is one of the cheapest options with all the basic functions needed for a bank account. You don’t need a recommendation for opening an account in Post Office. The documents required for opening an account in Post Office are:

Copy of Address proof
Copy of ID proof
Copy of Aadhar Card

The minimum amount required to open an account stays 20 rupees and average MAB stays 50 rupees. If you want chequebook and ATM card features, the average minimum account balance is expected to be 500 rupees only. You can also avail the internet banking options as well. 4% Interest is provided on the deposits. Interest earned is tax-free till the amount of 10000 rupees. A savings account can be opened for kids above the age of 10.

Good reason to open a bank account with India Post

Inexpensive when compared to all the banking options available in India

Why you should have a second thought

I don’t really have a second thought to open an account, but a smallest of my concern would be it is not a traditional bank

There are plenty of fees with Indian banking and you have to choose carefully especially as an expat. You will be required to pay about 500 rupees a month to keep an account and cards are not free. ATM fees can be high if outside the network and even if inside the network you only get 3-4 free withdrawals a month. After that, expect to pay up to 50 cents for a transaction.

Watch out for all fees and we suggest you request a copy of the list of fees with your relationship manager. Read the fine print carefully and look for account closing fees, minimum balances and fees to even see your own statement.

The virtual bank account alternative

Sending money out of India is very expensive if you use a bank

India is one of the world's most expensive countries to transfer money in and out of. If you need to send money anywhere to or out of India, it is normal to pay nearly 10% in currency conversion and some banks are so slow it takes 2 months to have money available in your accounts. If you need to send 10 thousand dollars to India, you will get about 9000 dollars worth of rupees back home. This is because they have to cover outrageously high operational costs thanks to outrageously complex and old technology including sending faxes around for approvals.

With B2B Pay, you save 900 euros in this transaction. You read that right, you get 9900 euros worth of rupees back home. Plus, you get a IBAN account in Europe you can use just like a bank account to send and receive money within Europe for free and send money anywhere in 30+ currencies for a 1% flat fee.

Page content

1. How to open a bank account in India
2. Documents needed to open a bank account in India
3. Can I open a bank account in India as a non-resident?
4. Types of accounts
5. Best banks in India
6. Nationalized Banks
7. Good Reasons to Choose a National Bank:
8. Why you should have a second thought:
9. Private banks in India
10. Here is a list of private banks of India
11. Good reason to choose a Private Bank
12. Why should you have a second thought?
13. Post Office Savings Account
14. Good reason to open a bank account with India Post
15. Why you should have a second thought
16. The virtual bank account alternative
17. Sending money out of India is very expensive if you use a bank

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