NRE vs NRO Account: Which NRI Account Do You Need?

NRE vs NRO Account: The Complete Comparison

NRE बनाम NRO खाता: संपूर्ण तुलना

Open an NRE account for income earned abroad — it is fully repatriable and tax-free in India. Open an NRO account for income earned in India (rent, pension, dividends) — it is taxable and only partly repatriable. Most NRIs open both.

If you are an NRI (Non-Resident Indian), the two main accounts you can hold in India are NRE (Non-Resident External) and NRO (Non-Resident Ordinary). They serve different purposes, and picking the wrong one costs you tax or repatriation freedom. Here's everything you need to know.

NRE vs NRO: Comparison Table

NRE बनाम NRO: तुलना तालिका

Feature	NRE Account	NRO Account
Full form	Non-Resident External	Non-Resident Ordinary
Funds source	Income earned abroad	Income earned in India
Repatriable?	Yes — fully and freely	Limited (USD 1 million/year)
Interest tax	Tax-free in India	Taxable in India
Currency	Held in INR, fully convertible	Held in INR
Joint holder	Only with another NRI	Can be with a resident
Best for	Salary, savings from abroad	Rent, pension, dividends in India

NRE Account Explained

NRE खाता समझाया गया

An NRE account is for money you earn outside India and bring in. Its biggest advantages:

Fully repatriable — principal and interest can be taken back abroad anytime.
Interest is tax-free in India.
Rupee convertibility — funds are held in INR but freely convertible.

Use it for your foreign salary, savings, and investments you may want to move out of India later.

NRO Account Explained

NRO खाता समझाया गया

An NRO account holds income you earn in India as a non-resident — rent, pension, dividends, interest, or funds you had before becoming an NRI. Its rules:

Not freely repatriable — limited to USD 1 million per financial year.
Interest is taxable in India (banks may deduct TDS).
Can be jointly held with a resident relative.

Which One Do You Need?

आपको किसकी आवश्यकता है?

Earning abroad, want tax-free, repatriable savings? Open an NRE account.
Have rent/pension/dividend income in India? Open an NRO account.
Most NRIs open both — NRE for foreign earnings, NRO for Indian income.

💡 Both accounts at the same branch use the same IFSC code — the code identifies the branch, not the account type. Find any branch's IFSC free here.

🔍 Find IFSC Code
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Frequently Asked Questions (FAQs)

अक्सर पूछे जाने वाले प्रश्न (FAQs)

Q1. What is the difference between NRE and NRO accounts?

प्र1. NRE और NRO खातों में क्या अंतर है?

NRE is for foreign income — fully repatriable and tax-free. NRO is for income earned in India — taxable and repatriable only up to USD 1 million per year.

Q2. Can I transfer money from NRO to NRE?

प्र2. क्या मैं NRO से NRE में पैसे ट्रांसफर कर सकता हूं?

Yes, up to the USD 1 million annual repatriation limit for NRO funds, subject to tax clearance on any taxable income.

Q3. Which account is better for NRI salary?

प्र3. NRI वेतन के लिए कौन सा खाता बेहतर है?

The NRE account — foreign salary is held tax-free and can be repatriated anytime.

Q4. Is NRO interest taxable in India?

प्र4. क्या NRO ब्याज भारत में कर योग्य है?

Yes, interest on NRO accounts is taxable in India and banks may deduct TDS on it.

Q5. Do NRE and NRO accounts have the same IFSC code?

प्र5. क्या NRE और NRO खातों का IFSC कोड समान है?

Yes. Both accounts at the same branch share the branch's IFSC code, since the code identifies the branch, not the account type.

Sources: RBI FEMA guidelines on NRE/NRO accounts. Rules can change — confirm with your bank.