NRE, NRO and FCNR accounts explained

Which Indian bank account to use for what, once you are an NRI.

Once you live abroad, Indian rules (FEMA) say your bank accounts in India must change. Here is what each account type is for.

NRE ACCOUNT (Non-Resident External)

• For money you earn abroad and send to India
• Held in rupees; money and interest can be moved back abroad freely
• Interest is tax-free in India (it may still be taxable in your country)

NRO ACCOUNT (Non-Resident Ordinary)

• For income you earn in India: rent, dividends, pension
• Your old resident savings account becomes an NRO account
• Interest is taxable in India, and tax is deducted at source
• Money can be sent abroad up to a yearly limit (currently USD 1 million per financial year), with the right forms

FCNR(B) DEPOSIT

• A fixed deposit held in a foreign currency (for example USD, GBP, EUR)
• Protects you from rupee exchange-rate swings

WHAT TO DO

• Tell your bank you have become an NRI and convert your accounts.
• Keep your PAN linked to your accounts.
• Ask your bank about the tax treaty (DTAA) between India and your country to reduce tax on NRO interest.

General information only, not financial or tax advice.

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More guides

• Your first weeks abroad: a checklist
• Renewing your Indian passport abroad
• OCI card: the basics
• NRE, NRO and FCNR accounts explained
• Taxes in India when you live abroad
• Sending money home: getting a good deal
• Parents visiting you abroad
• Help from the Indian embassy or consulate
• PAN, Aadhaar and voting as an NRI
• Finding Indian groceries, food and festivals near you

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