NRIs can’t operate savings bank accounts that Indian residents typically use. In fact, NRIs are required to convert their savings bank accounts into NRO accounts when they leave India.
But there’s not just NRO account for NRI. There’s also NRE, FCNR, EEFC, RFC accounts that NRIs can maintain and use.
However, NRE and NRO bank accounts are two of the most important bank account types that NRIs should know about.
In this article, we help you understand each of these bank account types in depth. But more importantly, we compare them across various aspects so that you know which works better for what purpose.
NRE or Non-Resident (External) Account allows you to deposit foreign currency like USD, GBP and Euros into it. It then gets converted into INR at the prevailing exchange rate and sits in the account in INR domination.
The primary use of this account is to be able to deposit your foreign income and use it in India for transactions, payments and investments that need to be made in INR.
We discuss a few more use cases of NRE accounts in the comparison table later in the article.
✅ Interest earned by NRE accounts (as well as NRE FDs) is fully tax exempted
✅ 100% of money in NRE accounts can be repatriated out India
✅ You can transfer money from NRE accounts to NRO accounts
The comparison table later in the article discusses more advantages and aspects.
NRO bank accounts for NRIs are identical to savings bank accounts for resident Indians. In fact, when someone leaves India to become an NRI, they are required to convert their existing savings bank accounts into NRO bank accounts.
NRO or Non-Resident Ordinary Account allows you to deposit and manage your income (like interest and rent) earned within India.
We discuss different aspects of NRO accounts and compare them with NRE accounts for your understanding in the following table.