NRE vs NRO: What’s the Difference?| North Loop Official Blog
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21 Apr 2020

NRE vs NRO: What’s the Difference?

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North Loop NRI Banking Services

The Indian banking system can feel overwhelming, with its myriad rules and various requirements. None more so than the NRI banking system, which requires non resident Indians (NRIs) to have different accounts to regular savings accounts held by resident Indians. There are two types of NRI bank accounts: NRE and NRO. It is natural to wonder what’s the difference between NRE vs NRO. We’ll show you what the two accounts are, their differences, and the best NRE and NRO accounts.

NRE Account

Non Resident External Accounts are most commonly known as NRE Accounts. These accounts are offered by Indian banks. These NRE accounts can be either savings or current accounts. NRE accounts are used by NRIs for their foreign earnings e.g. foreign salary. If you want to deposit your foreign income or earnings into an Indian account, you can use an NRE account. You can then easily transfer this money to other Indian accounts as required. NRE accounts are also tax exempt, so the interest you earn on these accounts isn’t taxable by Indian tax law.

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

Best NRE account

The best NRE account should have the following features:
  • No minimum balance
  • No fees
  • High level of service and care
  • Easy to set up
  • High interest rate

If you’re interested, you can check out North Loopwhich ticks all the above boxes - it’s free, has no account minimum balance, provides 24/7 global customer care and you can sign up in 5 minutes - with industry-leading interest rates.

NRO Account

The ‘sister’ account to NRE Accounts is the Non Resident Account (NRO Account). NRO Accounts serve to complement NRE Accounts - they are used by NRIs to deposit their Indian earnings. If you have income in India, you will need an NRO Account to deposit these earnings. From real estate transactions to rental income to dividend income, NRO accounts are a requirement for all NRIs if they have any Indian income. You can repatriate these funds abroad (up to $1 million a year), and interest earned in these accounts is taxable by Indian law.

Best NRO account

When you’re looking at the best NRO account, it should have the following features:
  • Sign up quickly and online
  • Zero balance
  • No transaction fees
  • Debit card shipped globally

You can try North Loop which provides you with all the requirements listed above - no fee , no account minimum balance, and you can sign up in 5 minutes anywhere the world from the comfort of your home.

NRE and NRO difference

We highly recommend having both an NRE and NRO account (and since North Loop has free, zero balance accounts, it won’t cost you anything to have both!). You can then transfer funds into either account as you need, earn interest, diversify your portfolio and invest in the Indian stock market.
You will also need an NRE and NRO Account if you want to invest in Indian mutual funds and the Indian stock market. Here’s a quick overview of the differences between the two accounts:
NRO AccountNRE Account
UsageDomestic Indian EarningsForeign Earnings
Repatriation of fundsUp to $1 million every year.
Requires RBI Approval after that
Freely Repatriable
TaxTaxable as per Indian lawTax-exempt
Debit CardYesYes
Interest on DepositsYesYes

NRE Account Minimum Balance

Many banks have a high NRE account minimum balance - even though they say INR 10,000 for minimum balance- the best accounts require far higher amounts (ranging from Rs. 50,000 onwards). Wouldn’t it be nice to have an NRE account that had industry leading service, features, interest rates and no minimum balance?

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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No-fee banking, investments, remittances & insurance for the global Indian

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.