For Our Non-Resident Indians

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.

Non-Resident External (NRE) Accounts

The Non-Resident External (NRE) Account enables seamless transfer of foreign earnings to India. These accounts, denominated in rupees, can be opened as Current, Savings, Fixed, or Recurring Deposits. Importantly, the interest earned on NRE Accounts is tax-free and fully repatriable. They can also be jointly held with close resident Indian relatives on a Former or Survivor basis.

Non- Resident Ordinary (NRO) Accounts

Non-Resident Ordinary (NRO) Accounts are mainly used for depositing income earned in India, though foreign earnings can also be credited to this account. When an Indian citizen moves abroad for employment with the intention of long-term residence, their existing resident accounts must be converted into NRO Accounts by the bank. It is therefore important to notify the bank about the individual’s relocation 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 maintained in various currencies, including US Dollars, Canadian Dollars, Australian Dollars, Sterling Pounds, Euros, and Japanese Yen. These accounts can be opened as term deposits with 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.