Types of Bank Accounts for Non Resident Indians

September 30, 2013 07:00
Types of Bank Accounts for Non Resident Indians

There is a great deal of confusion about the NRE, NRO and FCNR bank accounts for NRIs and the differences, comparison etc.  Here is a quick guide:                                     

Non Resident External (NRE) Account

Source of funds: It can be funded with foreign currency, inward remittances or from NRE/FCNR accounts held with any bank in India.

Currency: Indian Rupees (INR) only

Repatriability: The principal and the interest are easily repatriable (i.e. the funds can be freely transferred overseas)

Taxation: The interest earned is fully exempt from income tax in India.

Type of account: Savings and Fixed deposit accounts

Joint account with residents:  Not allowed

International debit card: Allowed           

Non Resident Ordinary (NRO) Account

Source of funds: The account can be funded with income from India or abroad

Currency: Indian Rupees (INR) only

Repatriability: Up to $1 million  is repatriable for bonafide purposes, subject to fulfilment of the prescribed documentation

Taxation: The interest earned attracts tax deduction at source (TDS)

Type of account: Savings and Fixed deposit accounts

Joint account with residents:  Allowed

International debit card: Not allowed     

Foreign Currency Non-Resident (FCNR) Account

Source of funds: The account can be funded with foreign currency, inward remittances or from NRE/FCNR accounts held with any bank in India

Currency: Foreign currencies allowed are USD, British pound, Euro, Japanese Yen, Canadian Dollar and Australian dollars

Repatriability: The principal and interest earned are fully repatriable

Taxation: The interest earned is fully exempt from income tax in India

Type of account: Fixed deposit accounts only

Joint account with residents:  Not allowed

International debit card: Not applicable

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