Key takeaway
Use an NRE account for money you bring from abroad and want to take back freely. Use an NRO account for income earned in India, such as rent, dividends, pension or sale proceeds. FCNR deposits keep your money in foreign currency.
At a glance
| Feature | NRE | NRO | FCNR (B) |
|---|---|---|---|
| Currency | Indian rupees | Indian rupees | Foreign currency |
| Money in | Funds from abroad | Indian income and funds from abroad | Funds from abroad |
| Repatriation | Freely repatriable | Up to USD 1 million per financial year, with tax compliance | Freely repatriable |
| Interest tax in India | Generally exempt for non-residents | Taxable, with TDS | Generally exempt for non-residents |
| Type | Savings, current, term | Savings, current, term | Term deposits only |
When you become an NRI
Under FEMA rules, resident savings accounts must be redesignated as NRO accounts once you become a non-resident. Tell your bank promptly.
Joint accounts
- NRE accounts can be held jointly with other NRIs, and with a resident close relative on a “former or survivor” basis.
- NRO accounts can be held jointly with residents.
Moving money between accounts
Transfers from NRO to NRE are allowed within the USD 1 million annual limit, after tax compliance — usually with Forms 15CA/15CB.
When you return to India
NRE and NRO accounts must be redesignated as resident accounts, or foreign currency balances moved to a Resident Foreign Currency (RFC) account.
Tax note
Interest on NRE and FCNR deposits has traditionally been exempt from Indian tax for non-residents, subject to conditions. Confirm the position under the Income-tax Act, 2025 and check how your country of residence taxes it.
Frequently asked questions
Where should rent from my Indian flat go?
Into an NRO account.
Can I deposit Indian income into my NRE account?
Generally no; Indian-source income goes to the NRO account.
Can I keep my old resident account?
No, it should be redesignated as an NRO account.
Related LegalCops services
References
- Foreign Exchange Management (Deposit) Regulations, 2016
- Foreign Exchange Management (Remittance of Assets) Regulations, 2016
- Income-tax Act, 2025
Last reviewed: November 2026.
The information provided is for general educational purposes only and does not constitute legal advice. Applicable laws and procedures may vary depending on the facts, jurisdiction, and circumstances of each matter. Consult a qualified legal professional before taking action.
