NRI Savings Accounts (NRE/NRO)

Non-Resident Indians (NRIs) have specific types of savings accounts available to them, known as NRE (Non-Resident External) and NRO (Non-Resident Ordinary) accounts. These accounts are designed to meet the banking and financial needs of NRIs, providing flexibility in managing income both in India and abroad. Here's an overview of each account type:

NRE (Non-Resident External) Account

 

Overview:

The NRE account is primarily used by NRIs to park their foreign earnings in India. The funds deposited in this account are fully repatriable, meaning the principal and interest can be transferred abroad freely, without restrictions.

 

Key Features:

• Currency: The account is held in Indian Rupees (INR).

• Repatriation: Both principal and interest earned are fully repatriable.

• Tax Benefits: Interest earned on the NRE account is tax-free in India (no income tax, wealth tax, or gift tax).

 

Ideal For:

NRIs who want to maintain their foreign earnings in Indian Rupees and need full repatriation benefits for both the principal and interest.

NRO (Non-Resident Ordinary) Account

 

Overview:

The NRO account is used by NRIs to manage their income earned in India, such as rent, dividends, pension, or any other source of Indian income. Unlike the NRE account, repatriation of the principal amount is restricted, though interest can be freely repatriated.

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