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One thing I wanted to mention here is that accounts held with Citibank India are not subject to FATCA reporting, nor do they count towards FATCA thresholds. Citibank will ask you for your SS# and will send you 1099-INTs.

The advantage of holding CitiNRI accounts is that this saves you from the hassle of FATCA reporting, and of computing interest yourself. And if you are resident in the US, it's easier to contact a CitiNRI manager (there are specific CitiNRI personnel in places with a lot of Indians like NJ, NY etc.)

The disadvantage is that CitiNRI FD rates tend to be 1-2% point lower than Indian banks. Also, if you are a US person resident in India, there are far fewer branches of Citibank than there are of Indian banks like Axis or HDFC. Even in the major metros, Citibank may have only 3-4 branches in major business hubs.

There is a form 8938 that is filed along with the Tax returns, and then there is the FINCEN-114 form that is filed online (this is often called FBAR reporting). Both forms have total balance amount thresholds, below which one need not file the form.
Those that maintain financial accounts at a foreign branch of a US financial institution are not required to file form 8938.

Having a Citi-India account of whatever sort, does not exempt the US-Tax Filer from the FinCEN114 online reporting each year, when the total balance threshold is reached.
Here is the reference table from the Internal Revenue Service showing who files what:

FATCA is the abbreviation of the name of a US law. [QUOTE]The Foreign Account Tax Compliance Act (FATCA) is a United States federal law whose intent is to enforce the requirement for United States persons (including those living outside the U.S.) to file yearly reports on their non-U.S. financial accounts to the Financial Crimes Enforcement Network (FINCEN). see Wiki page on FATCA

greyfri;627467One thing I wanted to mention here is that accounts held with Citibank India are not subject to FATCA reporting, nor do they count towards FATCA thresholds. Citibank will ask you for your SS# and will send you 1099-INTs.

The advantage of holding CitiNRI accounts is that this saves you from the hassle of FATCA reporting, and of computing interest yourself. And if you are resident in the US, it's easier to contact a CitiNRI manager (there are specific CitiNRI personnel in places with a lot of Indians like NJ, NY etc.)

The disadvantage is that CitiNRI FD rates tend to be 1-2% point lower than Indian banks. Also, if you are a US person resident in India, there are far fewer branches of Citibank than there are of Indian banks like Axis or HDFC. Even in the major metros, Citibank may have only 3-4 branches in major business hubs.

Having an account in the Chicago Branch of the State Bank of India would be a better idea, if one were to be so bent on not wanting to file a couple of additional forms each year.

okonomi;627542
Having an account in the Chicago Branch of the State Bank of India would be a better idea, if one were to be so bent on not wanting to file a couple of additional forms each year.

Yes, a CitiNRI account still has FBAR filing requirements. That is why I referred only to FATCA (form 8938)

I don't believe SBI's US branches open NRI accounts. They only open regular US accounts -- in which case, one might as use any regular US bank.

it's not a matter of being bent out of shape (although form 8938 can involve a lot of work for very small sums of mpney, and potentially huge penalties). For someone who is primarily a US resident, it may make sense to hold a CitiNRI account (especially if one is already a CitiGold customer in the US) and avoid unnecessary paperwork and still have access to worldwide banking services in India. For a US person resident in India, or an NRI residing in (say) the middle east, it likely makes less sense to hold Citi Accounts.

greyfri;627543Yes, a CitiNRI account still has FBAR filing requirements. That is why I referred only to FATCA (form 8938)

I don't believe SBI's US branches open NRI accounts. They only open regular US accounts -- in which case, one might as use any regular US bank.

it's not a matter of being bent out of shape (although form 8938 can involve a lot of work for very small sums of mpney, and potentially huge penalties). For someone who is primarily a US resident, it may make sense to hold a CitiNRI account (especially if one is already a CitiGold customer in the US) and avoid unnecessary paperwork and still have access to worldwide banking services in India. For a US person resident in India, or an NRI residing in (say) the middle east, it likely makes less sense to hold Citi Accounts.

For US tax residents*, the form 8938 is relevant only when the combined year-end foreign "specified financial asset" balances go above $50K (single), and $100K (married, filing tax-returns jointly). If Citibank-India is paying 1 or 2% per year less on this level of money in FD, compared to, say, a local bank branch, that would be a $500 to $2000 less in interest earnings a year. Significant money -- enuf to take one's significant-other to dinner a couple of times.

As for paperwork, a person ought to look at the number of characters a TuboTax like software will compose on form 8938 telling the IRS about the bank name, address, and balance amount. It will be a tweet that one may take to the bank.

*for India tax-residents, who are required to file US tax returns, the 8938-form requirements are much higher.... MFJ tax-filing status persons may have year-end balance of $400K, or anytime-during-year-temporary balance of $600K.

I used to be a local Citibank customer. And they sold their retail banking business to Sumitomo-Mitsui-Banking-Corp., and voila - enter form 8938.

okonomi;627560For US tax residents*, the form 8938 is relevant only when the combined year-end foreign "specified financial asset" balances go above $50K (single), and $100K (married, filing tax-returns jointly). If Citibank-India is paying 1 or 2% per year less on this level of money in FD, compared to, say, a local bank branch, that would be a $500 to $2000 less in interest earnings a year. Significant money -- enuf to take one's significant-other to dinner a couple of times.

As for paperwork, a person ought to look at the number of characters a TuboTax like software will compose on form 8938 telling the IRS about the bank name, address, and balance amount. It will be a tweet that one may take to the bank.

You're taking the most extreme comparison (and even in that case, you're ignoring the impact of taxes, which would depending on state knock off up to 40-45 % of interest earnings).

1) You're assuming that all Indian financial assets are in FDs. That is rarely the case. Stocks, regular savings accounts, cash balance life insurance policies etc. are very often part of Indian financial assets, and FDs may be only a small portion.

2) The other thing is that 1-2% is probably an extreme example -- comparing the best Indian FD maturities available to Citi FD rates. But for US residents, it's rarely possible to make use of the best Indian FD because you have to open an account at the bank that is offering the best FD rates at that time and be willing to lock FDs up for that maturity. For US residents, that sort of best FD chasing involves a lot of logistical issues, although for a US person resident in India its different. Actually, quite often I've seen maybe 0-0.25% differential with SBI for the periods I'm interested in.

2) Besides, in many cases money in an account may come in and go out fast -- it may be only needed to (say) pay for a flat in India or to be used as a checking account by an Indian relative or funds that are intended to be repatriated. In that case, the interest amount is small (and savings deposit rates are pretty much the same for all banks). That is another case where a Citi account could be useful

3) Also, for people who are just over the FATCA limits, it may make sense to put the overage in a Citi NRI account.

Also If you're already a CitiGold US customer, its easier to transact with Citi NRI given their branches and presence in the US. There are times when some particular transaction may require a physical visit to a bank branch, and that's much easier with Citi NRI. I'm not saying that using CitiNRI accounts is right for all people (indeed, I said earlier that for US persons resident in India, it's not a good idea), but certainly for US residents, it's a viable option.

As far as paperwork goes, I can point to the case of an acquaintance of mine who held several financial assets in India in paper work (for various reasons, they could not be demated). For each asset (some worth barely $50- $100 or so), he had to fill out several lines in form 8938, and link it to 1040, and explain why many life insurance policies did not show income (or something like that). He was also concerned that Form 8938 may be an audit trigger (not sure if that's correct).

Well, it looks like Citi heard me. They removed all Citi NRI reps in the US, and wouldn't even accept checks for NRI accounts in the US any more (but will do so in India). I'm not sure what this means for CitiGold status. Needless to say, this is quite annoying.

I also heard that Citibank is shutting down its retail broking biz in India. I suppose this may be part of a general cost cutting spree. Maybe they're even planning to sell of their retail banking business in India (like they did in Japan). I doubt that though, because they have a long history in India and their Indian business is profitable overall.

In general a lot of foreign banks (HSBC, StanChart etc.) seem to be trimming operations in India. The banking business in India (especially retail banking) is highly competitive and some of these banks are clearly deciding it's not worth it.

greyfri;628163Well, it looks like Citi heard me. They removed all Citi NRI reps in the US, and wouldn't even accept checks for NRI accounts in the US any more (but will do so in India). I'm not sure what this means for CitiGold status. Needless to say, this is quite annoying.

I also heard that Citibank is shutting down its retail broking biz in India. I suppose this may be part of a general cost cutting spree. Maybe they're even planning to sell of their retail banking business in India (like they did in Japan). I doubt that though, because they have a long history in India and their Indian business is profitable overall.

In general a lot of foreign banks (HSBC, StanChart etc.) seem to be trimming operations in India. The banking business in India (especially retail banking) is highly competitive and some of these banks are clearly deciding it's not worth it.

You had already presented arguments as to why Citibank, India is not all that useful, except for a small number of people who can put up with the various difficulties that Citi proffered.

For those resident "US persons" with a tax-home in India, they need to maintain their total "specified" financial assets between US$599999 (max during the year) and USD$399999 on Dec 31. It would be a simple matter to do the usual brokerage account house-cleaning (take profits, sell dogs etc..) during the fourth quarter and wire the "excess" money to some USA bank to sleep until January 1 of the next tax year. International wire transfer is not all that difficult these days.

As they say "aaall eeesss vell"

greyfri;628163Well, it looks like Citi heard me. They removed all Citi NRI reps in the US, and wouldn't even accept checks for NRI accounts in the US any more (but will do so in India). I'm not sure what this means for CitiGold status. Needless to say, this is quite annoying.

If you have Citi Account in US local branch and a Citi India NRE/NRO, you can deposit the check into US account and then use global transfer to instantly transfer into Citi NRE/NRO. CitiGold Status gets you better rates too.

1. Are there any other banks besides Citibank which issue 1099? This is because Citibanks service and rate of interest is simply horrible, compared to many others.
2. I wonder if bank has 1099-INT why is even FBAR a requirement. It is no different than say investing in a Bank of America or Wells Fargo over here in the US.

greyfri;627467One thing I wanted to mention here is that accounts held with Citibank India are not subject to FATCA reporting, nor do they count towards FATCA thresholds. Citibank will ask you for your SS# and will send you 1099-INTs.

The advantage of holding CitiNRI accounts is that this saves you from the hassle of FATCA reporting, and of computing interest yourself. And if you are resident in the US, it's easier to contact a CitiNRI manager (there are specific CitiNRI personnel in places with a lot of Indians like NJ, NY etc.)

The disadvantage is that CitiNRI FD rates tend to be 1-2% point lower than Indian banks. Also, if you are a US person resident in India, there are far fewer branches of Citibank than there are of Indian banks like Axis or HDFC. Even in the major metros, Citibank may have only 3-4 branches in major business hubs.

Only US-based banks follow this rule. I am not aware of any other american bank doing business in India so Citibank is unique in that regard.