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21 Apr 2020

All about NRE and NRO Account

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All about NRE and NRO Account

Are you an Indian living abroad? Nearly 35 million Indians live abroad, and regularly visit India, invest in India and remit money to India. To do all this, the Indian government requires non-resident Indians (NRIs) to have bank accounts known as NRE NRO Accounts. Below we will tell you all you need to know about NRE and NRO Accounts, and how North Loopmay be the best option for you.

NRE NRO Account

The NRE NRO Account is actually two accounts: NRE and NRO. These two accounts form the basis of the NRI banking system, and all NRIs are highly recommended to have both. Remember - if you’re an NRI, you are prohibited from maintaining a regular savings account that is meant for resident Indians.

Get a zero-balance, no-fee NRE/NRO account with North Loop in 5 minutes

NRO Savings Account

The NRO Savings account is a high interest (relative to Western countries) savings account. You use it to park any earnings you make in India e.g. rental income, property sales, dividends. If you inherit a property that you then rent out, that rental income must be deposited in a NRO bank account. The NRO bank account is also used for investing in mutual funds.

NRE Savings Account

Similar to the NRO Savings account, the NRE savings account lets NRIs deposit all their ‘foreign’ earnings into an Indian account. Foreign earnings are any income you make or receive outside of India. These accounts are also high interest, with the added benefit that they also are tax-exempt by Indian Tax law.
NRE account benefits include this tax exemption - you don’t have to pay any tax on your deposits and interest earned in these accounts (you may have to pay it in your home country though - speak to a tax advisor!). NRE bank accounts also have a much higher interest rate than any savings account in countries such as the US, Canada, Australia etc. Thus, you benefit twice over by depositing cash in an NRE account. Another NRE account benefits is that you can easily repatriate (send out of India) to any account.

Best Bank for NRE Account

If you’re considering opening an NRE account, here are a few things to consider when looking for the best bank for NRE account:
  • Does the bank charge fees? Is the bank transparent with the fee structure, and are the fees easy to understand? Many banks have fee schedules that are pages long, not simple and many fees are hidden!
  • Is customer service good? Banks are notorious for their terrible customer service, with unhelpful staff, long waits and irritating policies
  • Is the interest rate high? Many banks try to give you a lower rate, thinking you won’t notice!
  • Is it easy to bank? Do you have to constantly get an OTP, call customer service, print and sign forms?

North Loop solves all these problems by letting you sign up online in 5 minutes, bank 24/7 online, and has industry-leading interest rates, no fees and award-winning customer service.

NRE and NRO Account Difference

The main aspect about NRE and NRO account difference is where the money is being deposited from. For NRO accounts, deposits are made from earnings generated in India. For NRE Accounts, your income that is made outside of India is deposited here (foreign currency). You can read an in-depth breakdown on the differences here.

North Loop NRI Banking Services

North Loop simplifies NRI account opening, letting you get an account in minutes! Zero balance, zero fees. Low interest loans for NRIs. Get access to the very best in NRI banking - sign up here

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This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended be advice. You must obtain professional advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax, investment or other professional advice from North Loop or its affiliates. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date. All opinions expressed do not reflect the views of North Loop nor are endorsed by North Loop.