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Money Know-How

NRE & NRO Accounts — Breaking It Down For NRIs

The most challenging part of being a non-resident Indian (NRI) is managing your own finances abroad and back home. It’s quite natural to be hassled by the fluctuating exchange rates, tax systems of two different countries and the million nitty gritties of the best possible way to save money.

So, here we are, with all the information you need to keep your finances in order, even when you are busy building a fortune miles away from home.

NRI’s are an influential community that makes India proud. NRI’s contribute a sizeable chunk to India’s net income. As per a recent World Bank report, in the year 2016, India received a whopping US$ 62.87 bn from NRIs, the largest piece of pie of total global remittances worth US$ 575 bn (of which US$ 429 bn was remitted to developing countries). All credit goes to the hard-working NRIs across the globe, NRI remittances constituted 3.3% of India’s Gross Domestic Product (GDP) in FY16.

With the Indian rupee constantly falling against the US Dollar and lower interest rates in the US, Canada, Australia, Middle East, etc. (these are countries where a large population of NRIs reside), it could makes sense for NRIs to keep their savings in a rupee account in India.

For that, there are two types of bank accounts an NRI can have in India:

  1. Non-Resident Rupee (NRE) account and/or
  2. Non-Resident Ordinary (NRO) account.

You can open both accounts in the form of Savings, Current, Recurring or Fixed Deposit accounts.

Here’s a lowdown on all that you need to know about these accounts.

What Is An NRE (Non-Resident Rupee) Account?

An NRE account is a freely-movable rupee-denominated bank account. In this account, you transfer money only in foreign currency like SGD, EUR or AUD and the banks use the current exchange rate at the time to convert that to Indian Rupees. Also, you can repatriate the principal amount and the interest accumulated to a foreign account.

What Is An NRO (Non-Resident Ordinary) Account?

An NRO account is designed to help NRIs manage their income such as rent, interest, dividends, or pension earned in India. Foreign currency deposited in NRO accounts is also converted into Indian rupees. You can convert your existing resident savings account into an NRO account when your status changes from Resident Indian to NRI. Also, the interest amount can be repatriated from this account; however, in case of the principle amount, you can remit only up to USD 1 million in a financial year.

What is the difference between NRE and NRO account?

So summing up.

You can opt for an NRE account to:

  • park your overseas earnings remitted to India converted to INR.
  • maintain savings in INR, but keep them liquid.
  • freely repatriate your NRI earnings.

On the other hand, you can opt for an NRO account to

  • maintain your Indian earnings (rents, dividends etc.) in INR
  • maintain ​the account with a relative who is a resident Indian.

Since NRIs share a strong bond with their families, India receives a huge chunk of global remittances. At InstaReM, we are committed to helping expats send money back home in a smart and cost-efficient manner. At InstaReM, we understand your need of being there for your family back in India during times of need. Thus, we are committed to helping NRIs send money back home through fast, cost-efficient and hassle-free transfers. That’s not all, we help you save big. Check out how.

You can check live FX rate of :- 1 AUD to INR| Live Rate of SGD to INR| HKD to INR Conversion


NRE AND NRO ACCOUNTS — BREAKING IT DOWN FOR NRIs was originally published in InstaReM on Medium, where people are continuing the conversation by highlighting and responding to this story.

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