If you are a Non-Residential Indian (NRI) or a Person of Indian Origin (PIO), you will have different banking and investment needs. Since you are residing abroad, most of your income and savings will be in foreign denominations, e.g. US dollar, Euro, etc. As such, you might need an account that would suit your requirements.
Many major banks and financial institutions in India offer the facility of opening an NRI Account. These accounts provide numerous facilities with respect to the currency denomination, transferability of the amount, tax, etc. But do you know everything about NRI Accounts? Let’s learn in detail what is an NRI Account and the different types of NRI Accounts.
NRI Account Meaning:
AnNRI Accountrefers to the accounts opened by a Non-Resident Indian (NRI) or a Person of Indian Origin (PIO) with a bank or financial institution which is authorised by the Reserve Bank of India (RBI), to provide various services.
Here are the types of NRI Accounts that you can opt for, to meet your financial requirements.
- Non-Resident External (NRE) Accounts
- Non- Resident Ordinary (NRO) Accounts
- Foreign Currency Non-Resident (FCNR) Accounts
- Non-Resident External (NRE) Accounts
The Non-Resident External (NRE) Account allows you to transfer your foreign earnings easily to India. However, this type of account is rupee dominated and can be opened in the form of Current, Savings, Fixed or Recurring Deposits.
It is vital to know that there is no tax levied on the interest earned from these accounts, i.e. they are tax exempt, and they are also easily repatriable, i.e. transferable. These accounts can be jointly opened with close relative Resident Indian on Former or Survivor basis.
- Non- Resident Ordinary (NRO) Accounts
The Non-Resident Ordinary (NRO) Account are primarily opened for depositing rupees earned in India. Foreign earnings can also be deposited in this account. When an Indian citizen goes abroad for a job with an intention to stay there, his resident accounts should be converted into an NRO Account by the bank. Therefore, it is essential to inform the bank about the individual's departure abroad.
Also, it is vital to know that NRO Accounts are rupee dominated and can be opened in the form of Savings, Current, Recurring Deposits or Fixed Deposits. These accounts can be jointly opened with any Resident Indian on Former or Survivor basis.
- Foreign Currency Non-Resident (FCNR) Accounts
The Foreign Currency Non-Resident (FCNR) Account can be opened in different currencies such as US Dollars, Canadian Dollars, Australian Dollars, Sterling Pounds, Euro, Japanese Yen, etc. TheseFCNR Accountscan be opened in the form of term deposits for the following maturity periods:
- 1 year and above but less than 2 years
- 2 years and above but less than 3 years
- 3 years and above but less than 4 years
- 4 years and above but less than 5 years
- 5 years.
It is essential to know that the entire deposit, i.e., principal and interest is tax-free until you hold the NRI status and is easily repatriable.
Looking to open anNRI Account? Click here to get started!
Want to know about how NRIs can take advantage ofcurrency fluctuations? Read more!
* The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circ*mstances.
FAQs
An NRI Account refers to the accounts opened by a Non-Resident Indian (NRI) or a Person of Indian Origin (PIO) with a bank or financial institution which is authorised by the Reserve Bank of India (RBI), to provide various services.
What are the types of NRI bank accounts? ›
Types of NRI Accounts
As mentioned earlier, there are three types of accounts available to NRIs in India – NRE stands for Non-Resident External Account, NRO stands for Non-Resident Ordinary Account, and FCNR (Foreign Currency Non-Resident) bank Account.
What is account type NRE and NRO? ›
You should opt for NRE Accounts if you want to hold or maintain your overseas earnings in Indian currency. NRE Accounts are also suitable if you wish to keep your savings liquid. You should opt for NRO Accounts if you want to save your earnings from India in Indian currency itself.
Which NRI account is best? ›
Best NRE Savings Account for NRIs in 2024
| Name of the Bank | NRE Deposit Interest rates below Rs. 2 crores |
|---|
| Citibank | 6.75% | 7.20% |
| DBS Bank | 6.25% | 5.75% |
| HDFC Bank | 6.60% | 7.00% |
| ICICI Bank | 6.70% | 7.00% |
10 more rowsNRE accounts are used to deposit or save foreign earnings in Indian currency. NRO accounts are used to manage and save Indian earnings that are made in Indian currency. FCNR accounts can be used to deposit or save foreign currency earnings in any of the currencies that the RBI has approved.
How to identify a NRI account? ›
An NRI Account refers to the accounts opened by a Non-Resident Indian (NRI) or a Person of Indian Origin (PIO) with a bank or financial institution which is authorised by the Reserve Bank of India (RBI), to provide various services.
What is a 4 in 1 NRI account? ›
A 4-in-1 NRI account is a combination of PIS Bank, Non-PIS bank, demat, and trading account. This combination offers a hassle-free stock market investment in India to NRIs. An NRI can invest in Stocks, Mutual Funds, Bonds, NCDs, IPOs, and ETFs.
Which is better NRI or NRE? ›
Tax benefits- NRE exempts the entire fund from any Income Tax. In FCNR accounts, only the interest is tax exempted. Purpose- NRE accounts take the deposit of earnings from the country where the NRI is currently residing but denominated in INR.
Which Indian banks are best for NRI? ›
Best NRE Savings Account in India
| Name of the Bank | NRE Deposit Interest rates below Rs. 2 crores |
|---|
| DBS Bank | 6.25% | 5.00% |
| HDFC Bank | 6.60% | 7.00% |
| ICICI Bank | 6.70% | 6.90% |
| Kotak Mahindra Bank | 7.10% | 6.20% |
10 more rowsDefined NRI Minimum Balance
| Bank Name | Minimum balance in NRE/ NRO Accounts |
|---|
| HDFC Bank | Rs.10000 * Rs.5000 ** |
| SBI | Rs.3000 * Rs.2000 ** Rs.1000 *** |
| DCB | Rs.10000 |
| BOB | Rs.10000 |
10 more rowsAn NRE Account or Non-Resident External Account offers you this facility. Here, your money is converted into Indian Rupee or INR at the time of deposit. This means that you can deposit money in any foreign denomination, e.g. US Dollar and withdraw it in Indian Rupees.
Should I transfer money to NRE or NRO? ›
In summary, NRIs should opt for NRE accounts if they want to hold or maintain their overseas earnings in Indian currency and NRO accounts if they want to save their earnings from India in Indian currency itself. Both accounts provide high liquidity, allowing easy withdrawals and deposits.
Can I withdraw money from my NRE account in India? ›
The account holder can withdraw money from his/her NRE account. Other than that, his/her family members, or whoever has access to the account in India can withdraw money. This type of account is most commonly used because countless NRIs send money to their families in India.
What are the benefits of a FCNr account? ›
Here are four benefits of holding an FCNR account:
- Denominated in foreign currency, so no impact of exchange rate fluctuations.
- Better Foreign currency yields with attractive FCNR rates.
- Full repatriability of funds, whether principal or interest.
- Interest earned on FCNR deposits is tax-free.
Thus, PIOs (person of Indian origins) or NRIs returning to settle permanently in India can open an RFC account. An RFC account can be converted to FCNR(B) (Foreign Currency Non Resident (Bank) or NRE (non resident external) accounts in case the person becomes an NRI again.
What is NRE account and NRI account? ›
As an NRI or Non-Resident Indian, you might feel the need to have an account in an Indian Bank where you can deposit and keep all your foreign currency savings in Indian denomination. In such a case, an NRE Account is an ideal fit for you. An NRE Account or Non-Resident External Account offers you this facility.
Which bank account is best for OCI holders? ›
FCNR accounts are often considered the best bank account for OCI card holders by some individuals. Here are some Axis Bank account types designed for NRIs and OCIs: 1. NRE Savings Account: This account allows you to deposit foreign earnings in India tax-free and repatriate the funds seamlessly.
