Understanding NRE and NRO Accounts| North Loop Official Blog
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17 Apr 2020

Understanding NRE and NRO Accounts

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Understanding NRE and NRO Accounts

Are you an Indian living in the US? Or the UK or in the Middle East? Or are you about to leave India to live abroad? If you are, you will need to get an NRE NRO Bank account! These bank accounts are specifically designated for NRIs (Non Resident Indians) as you are not allowed to use your regular savings accounts once you are no longer a resident of India. NRI banking services are available to Indian citizens and Persons of Indian Origin.

NRE Account

Non Resident External accounts, also known as NRE account, are bank accounts for NRIs to deposit their foreign earnings. So if you have a salary or some income in the US, you can transfer this and deposit it into an NRE Account. Here’s all about NRE and NRO accounts. NRE accounts offer high interest rates and are tax exempt by Indian tax law - this means the interest you earn from these accounts isn’t taxable!
You can easily repatriate your NRE account earnings or deposits to any account worldwide.
Profile image2: NRE Account
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Get a zero-balance, no-fee NRE/NRO account with North Loop in 5 minutes

NRO Account

The NRE Account’s partner account is called the Non Resident Ordinary Account, or NRO Account. The NRO account is used for deposits for any income you earn in India (while you are living abroad). For example, if you are earning rent on a property, receiving stock dividends or selling a house, you will need to use an NRO account to deposit your proceeds. NRO Accounts are taxed as per Indian law, so you will have to calculate your tax liability by speaking to a tax advisor.

NRO accounts are commonly used by NRIs when they need to sell real estate in India - read more about your TDS obligations on NRO accounts here.

You can get an NRO Savings account, or a NRO current account - though the most common is the NRO savings account. NRO account benefits include the fact that you can easily withdraw money from it, and deposit any Indian income into it as if you had a regular savings account. NRO account benefits also include the fact that you can invest in mutual funds through them - you don’t need a demat or PIS account. You can invest in mutual funds with North Loop’s Mutual Fund Investing Services. .

Difference between NRE and NRO account

The core difference between NRE and NRO accounts is that one is used for your foreign earnings, and is tax exempt (NRE) and one is used for your Indian earnings and isn’t tax exempt (NRO). Your NRO account can be used for Mutual Fund investments. Finally, NRE accounts have unlimited repatriability. On the other hand, if you try to repatriate more than $1 million from your NRO account in a financial year, you will need to get RBI approval.

Read our in-depth analysis about the difference between NRE And NRO Accounthere.

Open NRE Account Online

At present, there is only one way to open NRE account online - that is through North Loop. All you need to do is either download the North Loop app or visit nolobank.com and you can sign up for a free, zero balance NRE account in 5 minutes. If you look at other banks, they will let you input your email and contact details on their websites, and then a bank representative will contact you to start the paper-based NRE account opening process. So instead of spending weeks emailing and speaking to a bank representative, printing forms, self-attesting them and couriering them to India - sign up online in 5 minutes with North Loop.

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.