Three different types of NRI bank accounts

For non-resident Indians (NRIs), managing finances across borders can be a complex task. The Reserve Bank of India (RBI) has formulated specific guidelines and banking products to cater to the unique needs of NRIs, ensuring seamless financial operations. Here is an overview of the different bank accounts NRIs can open and their specific use cases.

NRE account
A non-resident external account is ideal for those who want to remit their foreign earnings to India. Both the principal and interest earned are fully repatriable. The interest earned in NRE accounts is tax-free in India, making it an attractive option for NRIs. Deposits in NRE accounts are made in foreign currency and converted to rupee, helping NRIs manage their Indian expenses.


NRO account
The non-resident ordinary account is best suited for NRIs who have income sources in India, such as rental income, pension, dividends, or any other earnings. This account is useful for managing day-to-day expenses and payments within India. Unlike NRE accounts, the interest earned in NRO accounts is subject to income tax in India.

FCNR account
The foreign currency non-resident accounts are designed to protect NRIs from foreign exchange risk. Deposits are maintained in foreign currency and there is no conversion to rupee. These accounts are available as fixed deposits in various foreign currencies, including USD, GBP, Euro, and others. The interest earned is tax-free in India and the funds are fully repatriable.

Points to note

• Opening any of these accounts requires submitting specific documents like proof of NRI status, passport, visa and overseas address proof.
• NRE and NRO accounts can be held jointly with other NRIs or with residents on a ¡¥former or survivor¡¦ basis, while FCNR accounts are usually held individually or jointly with other NRIs.

Content courtesy Centre for Investment Education and Learning (CIEL).
Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.