Different Types of NRI Accounts in India

1. Non – Resident External (NRE) Savings Account – NRE accounts come handy for the Indians who are residing in foreign countries. This type of account helps you to transfer foreign currency to India for your loved ones with ease.

• NRE Account is opened in order to keep foreign currency. You cannot deposit Indian currency in this account.
• These accounts do not qualify for any kind of wealth tax. Interest earned from these accounts is also exempt from taxes. These exemptions are applicable only to individuals who maintain these NRE accounts in the country and are not applicable for Overseas Company Bodies (OCB).
• NRE accounts are maintained in Indian Currency.
• You can open these accounts as savings and fixed deposit accounts.
• Transfer of money to India becomes easy and convenient.
• You can add a nominee in your NRE Account.
• This account can be opened in joint names with a Non-Resident Indian but opening NRE account in joint names with and Indian Resident is prohibited.
• The amount that is kept in these accounts can further be easily transferred to any other account say NRO or a Resident account or to any other NRE account as well.
• All those who are residing in Pakistan or Bangladesh cannot operate NRE accounts in the country without seeking the permission of RBI.
• Once you decide to return back to India, this account gets converted into Resident Account.

2. Non-Resident Ordinary (NRO) Account – NRO accounts solve purpose of NRIs who have their property given on rent and they have a constant flow of income in rupees or pension or dividends rolling in on regular basis while they are residing in a foreign land. For making local payments or other genuine needs in India NRO accounts prove very useful to NRIs.

• The very first requirement of this account is that the source of funds that are deposited in this account need to be from within the country. The source of fund should not be from abroad.
• If you wish to send money outside India you cannot do it without prior adhering to the norms laid by Reserve Bank of India.
• This account involves Indian currency thus this account is maintained in Indian Rupee.
• You can open these accounts as savings and fixed deposit accounts.
• You can open NRO account in joint names with a Resident or an NRI.
• Once you decide to return back to India, this account gets converted into Resident Account
• The amount that is kept in these accounts can further be easily transferred to any other account say NRO or a Resident account but transfer of funds to any NRE account is prohibited.
• If the account holder signs a Letter of Authorization also referred to as Letter of Mandate than a local representative can operate the account.
• Interest that is earned through NRO account falls under the taxation slab. 30 percent along with 3 percent education cess is deducted as TDS. This charge is applicable to fixed deposits as well as savings account.
• You can add a nominee in your NRO Account.

3. Foreign Currency Non-Resident (FCNR) Fixed Deposit Account – This account helps you in keeping your foreign currency earnings in the same denomination. This helps you to curtail the loss that maybe incurred by you due to currency fluctuations.

• These accounts operate only in foreign currency - you can deposit currency other than Indian rupee in this account.
• The account operates only in foreign currency thus the sources of fund are bound to be from abroad.
• The interest that gets accrued in these accounts is paid in the same foreign currency as it is being maintained in.
• The interest earned through these accounts does not fall under the income tax head in India - there is no income tax charged in India on the earnings through this account.
• You can open an FCNR account in joint names with an NRI. However, opening this account in joint names with Indian Residents is prohibited.
• If you tend to make any deposits in these accounts then the period of deposit will be from one year and to a maximum of five years.
• You can also avail the facility of getting an overdraft on your Savings or Current account against the FCNR Fixed Deposit.
• You can add a nominee in your FCNR Account.
• The currencies in which FCNR account can be maintained and operated are as follows

1. EURO
2. Canadian Dollars
3. US Dollars
4. Australian Dollars
5. Pounds Sterling
6. Japanese Yen