Bank Accounts for NRI: NRO, NRE, FCNR| North Loop Official Blog
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15 Apr 2020

Bank Accounts for NRI: NRO, NRE, FCNR

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Bank Accounts for NRI: NRO, NRE, FCNR

If you’re an NRI looking to open an NRI bank account, it may seem overwhelming at first the number of accounts and terms there are! NRO, NRE, FCNR - these are all different types of accounts. If you’re an NRI and NRO account is what you are opening - that is to help deposit your earnings in India. Here is an overview of the difference in NRE NRO accounts, as well as information on FCNR accounts:

NRE Accounts

Non-Resident Earnings Accounts, also known as NRE Accounts, can be savings or current accounts. These are tax-exempt accounts used to deposit any foreign earnings by an NRI. Their denomination is Indian Rupee i.e. if you transfer dollars to them, it will be converted and stored as Indian Rupees.
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NRO Accounts

Non Resident Ordinary Accounts, also known as NRO Accounts, can also be savings or current accounts. These are accounts that are used by NRIs to deposit their Indian earnings from sources such as real estate sales, rent, stock dividends etc. NRO accounts are taxable as per Indian tax law.

NRE NRO Account Difference

The two core accounts that form NRI banking - NRE and NRO - serve different purposes. At its core, the answer to NRE NRO Account difference is that NRE is for foreign earnings, and NRO is for Indian earnings. Here is a brief overview of the difference between NRE and NRO account:
NRE AccountNRO Account
TaxabilityTax free InterestTaxable Interest
RepatriabilityFreely repatriableRepatriable up to limits
Main PurposeFor foreign earningsFor domestic (Indian) earnings
Account HoldingJoint Account can be held with
any NRI who is a close relative
You can open an NRO account with
an NRI as well as any Indian resident.

Common Misunderstandings Accounts

NRI Banking is an umbrella term that encompasses all banking services for NRIs - there is no specific account called an NRI account. Here are a few other misunderstandings of NRI banking services:
NRI and NRE Account Difference - there is no such difference, as there are no NRI accounts!
There is no difference between NRE and NRI account as an NRE account is part of the suite of services for NRIs. So if you see a bogus article claiming there is a difference between NRI and NRE, it is mistaken.
I won't have to pay tax on any of my earnings - NRE accounts aren’t a tax haven! Just because the Indian tax authorities don’t tax you on the account’s earnings doesn’t mean you won’t pay taxes in your local country. For example, if you are a resident of the US holding a green card, you will have to pay tax on all worldwide income.

FCNR Accounts

Foreign Currency Non Resident Accounts (FCNR) are fixed term accounts for NRIs in a non-rupee denomination. You will earn interest on FCNR accounts, and they are for a fixed term e.g. 1 year. For example, if an NRI wants to move their foreign earnings to India, but doesn’t want to convert to Indian rupees, they can use a FCNR Account. FCNR accounts are usually available in the following currencies:
  • British Pound Sterling (GBP)
  • Euro (EUR)
  • Japanese Yen (JPY)
  • Australian Dollar (AUD)
  • Canadian Dollar (CAD)
  • US Dollar (USD)

FCNR accounts have a minimum 1 year term, and a maximum 5 year term. It’s important to note that the interest earned is tax-exempt by the Indian authorities! So you can deposit into an FCNR, earn interest, and then withdraw when you are ready and the term is up.

North loop NRI Banking Services

North Loop offers the next generation of NRI banking - free, zero balance, and a quick and easy online sign up process in 5 minutes. 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.