Cash lying idle in your bank account?
Invest as low as Rs. 1,000 in Mutual Funds and enjoy higher returns.
  • Fixed Deposit BYTES FROM OUR KITCHEN

    Difference between NRE and NRO FDs

    Many Non-Resident Indians (NRIs) hold either NRO or NRE accounts, which is a popular term deposit options that allows them to earn a good rate of return and park funds in India. NRE, or Non-Resident External accounts and NRO or Non-Resident Ordinary account, are special account options that are only available to NRIs. They come with a number of benefits including tax exemptions, full repatriability, etc. In this article, we will explore the difference between an NRE and an NRO account.

    What is an NRE account?

    An NRE FD is a type of term deposit account where the NRI makes deposits from overseas and remit the same in an Indian account, where the currency will be converted into rupees. An NRE deposit is basically a term deposit account held to transfer foreign earnings.

    What is an NRO account?

    An NRO account is usually opened by an NRI in order to manage the income that is earned in India. This income can be in the form of rent, pension or other types of dividends. The interest earned from these deposits are taxable.

    Difference between an NRE and an NRO account:

    NRE NRO
    Taxable Taxfree
    Fully repatriable (principal and interest) Restricted repatriability
    Cannot be opened jointly with Indian resident Can be opened jointly with an Indian resident
    Cannot deposit income earned in India Can deposit income earned in India

    Taxation

    NRO fixed deposits attract taxes as per Indian laws. The interests earned from an NRO FD are taxed according to the Income Tax Act, 1961 at around 30%, which is quite high when compared to domestic FD tax rates.

    NRE fixed deposits do not attract taxes on the principal or interests earned from the deposits. Consequently, NRE fixed deposits are completely tax free. This difference makes an NRE FD a better option than its NRO avatar.

    Repatriation

    NRO FDs do not offer repatriation option on the principal investment. Only the interest earned from your NRO FD can be transferred to a foreign account.

    NRE fixed deposits offer the option for full repatriation of funds including both principal and accrued interests to a foreign account. These accounts therefore simplify the process of transferring principal and earned interests from an Indian account to a great deal.

    Joint accounts

    Any two NRIs can opt for either a NRO or an NRE joint account without any complications. However, an NRI can only open an NRO account jointly with an Indian resident citizen.

    NRE fixed deposits cannot be opened jointly with a resident Indian citizen, even if that person is a direct family member.

    Deposit and withdrawal

    Only funds originating in India can be used to open an NRO account, and consequently an NRO fixed deposit. You cannot transfer funds from abroad to start a fixed deposit from your NRO. However, funds from an NRE account can be transferred into an NRO account for the purpose of opening a fixed deposit.

    NRE accounts are opened by remitting foreign currency earned from abroad directly into the fixed deposit account. NRE fixed deposits are restricted from being opened by transferring currency from an NRO account or a resident savings account.

    Withdrawals from both these accounts can be done only in Indian Rupees.

    Interest rates

    The rate of interest in NRO and NRE accounts may vary according to the bank you are applying in. As such, it is imperative that you check the available rates to find the option with the highest returns for you. Typically, an NRE or NRO FD is offered with maturity between 1-20 years.

    Overall, the choice between an NRE and an NRO fixed deposit boils down to your preferences according to the benefits that you can avail out of the two types of accounts. A point to remember here is that NRE accounts are used to park foreign earnings in Indian accounts and in INR, while an NRO account is used to park funds earned from India.

    Should you choose NRE or NRO account?

    Go for an NRE FD is you want to mainly park funds from foreign countries and want the currency to be fully repatriable.

    On the other hand, it is best to go for an NRO deposit if you want to park your Indian earnings.

    Customer Reviews

    • Bank of Baroda Fixed Deposit
      "Need improvement on customer support"
      0.5 4.0/5 "Great!"
      I have done one time investment fixed investment in Bank of Baroda, it has five year of locking period. The interest is nominal for the FD, I believe BOB give the interest around 8% , however there was no proper information regarding the interest. My father have taken this FD on my name, every year I deposit the amount.
      Was this review helpful? 0
      , noida
      Reviewed on Mar 25, 2019
    • Citibank Fixed Deposit
      "Its Good"
      0.5 3.0/5 "Satisfactory"
      I have converted saving maintenance into FD account for the term of one year. I can prolong period based on my convenience, the rate of interest is average for the fixed deposit. However I have online option to open and close the fixed deposit account at any time.
      Was this review helpful? 2
      , bangalore
      Reviewed on Mar 11, 2019
    • ICICI Bank Fixed Deposit
      "Satisfactory"
      0.5 5.0/5 "Blown Away!"
      My fixed deposit is with ICICI Bank. I can open and close this account online. The interest I earn is satisfactory. The customer services and response is good and in all it is a smooth process and there are no unwanted charges taken for the same.
      Was this review helpful? 4
      , chennai
      Reviewed on Mar 10, 2019
    • ICICI Bank Fixed Deposit
      "Attractive interest with best saving"
      0.5 5.0/5 "Blown Away!"
      As per the current financial year they are providing 7.2% of interest on the fixed deposit, I can deposit minimum of Rs. 5000 to upto 5 crores. I have activated ICICI Fixed deposit through online, the account got activated on the same day. There is no charges for prematurity .
      Was this review helpful? 3
      , thane
      Reviewed on Mar 08, 2019
    • HDFC Bank Fixed Deposit
      "Very Good Service"
      0.5 4.0/5 "Great!"
      I had just started this investment couple of months back and the services which they had provided has been good. I had started this investment through one of the brokerage nearby. Their customer support has been helpful and has been guiding me through out and the interest rate which they are offering has also been quite good.
      Was this review helpful? 5
      , new delhi
      Reviewed on Mar 03, 2019
    • andhra Bank Fixed Deposit
      "Its Good"
      0.5 5.0/5 "Blown Away!"
      Last year I had fixed deposit with Andhra Bank this January it got matured, the interest was good. The bank staffs are very cooperative on my queries it located in home town. I invested the amount of Rs.50,000 then I got the total amount of Rs. 55,000.
      Was this review helpful? 5
      , hyderabad
      Reviewed on Mar 02, 2019
    • Union Bank of India Fixed Deposit
      "Good Savings"
      0.5 4.0/5 "Great!"
      I done one time investment of fixed deposit with Union Bank of India. As per the current financial year the FD interest gone down around 6.75% for per annum. I opened the account through bank, they taken 3 to 4 for activation. The customer support is good I don' t have any issues.
      Was this review helpful? 4
      , mumbai
      Reviewed on Feb 26, 2019
    • SBI Fixed Deposit
      "Trusted Saving with SBI"
      0.5 3.0/5 "Satisfactory"
      All we know, SBI is a government bank, that is the reason I have availed fixed deposit from them. As per the current financial year they are providing the interest around 6%, I opened the account through online, but for the closure I think I need to visit the bank.
      Was this review helpful? 6
      , pune
      Reviewed on Feb 25, 2019
    • Oriental Bank of Commerce Fixed Deposit
      "Excellent"
      0.5 5.0/5 "Blown Away!"
      I have opened my fixed deposit in Oriental Bank of Commerce and am depositing every year in the month of June. The interest rate is reasonable, they are offering 6.65% even other banks are giving the same interest. I don't have customer service experience. Mostly am using their online service for transactions.
      Was this review helpful? 3
      , hyderabad
      Reviewed on Feb 21, 2019
    • SBI Fixed Deposit
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have taken my fixed deposit with STATE BANK OF INDIA, their service is good they provide me good interest rate,my deposit is good in growth, and I am making payment through on line like it get auto debited, and till now experience with this bank was good.
      Was this review helpful? 12
      , hyderabad
      Reviewed on Feb 20, 2019
    • Kotak Fixed Deposit
      "Best investment Plan"
      0.5 5.0/5 "Blown Away!"
      I have taken fixed deposit account in kotak mahindra Bank . They are not charging any charges for the account . I used to get income tax benefits . Am satisfied with the customer service and response.They are giving good rate of interest . Overall am happy with my account .
      Was this review helpful? 3
      , bangalore
      Reviewed on Feb 20, 2019
    • Axis Bank Fixed Deposit
      "Services are good"
      0.5 5.0/5 "Blown Away!"
      I also bank with Axis Bank for the fixed deposit. The customer support and response is good. There are no hassles in the process. I could open this account online. The lock in period is for one year. The rate of interest they provide on my savings is also satisfactory.
      Was this review helpful? 9
      , pune
      Reviewed on Feb 15, 2019
    • SBI Fixed Deposit
      "Good service"
      0.5 4.0/5 "Great!"
      I have fixed deposit with SBI,As per the bank norms rate of interest is up to 6.88%. I opened the account through bank, There is no maturity period, like it is no fixed period, i can keep on deposit whenever i want and i take whenever i need it is unlimited, Their service is good.
      Was this review helpful? 7
      , bangalore
      Reviewed on Feb 14, 2019
    • SBI Fixed Deposit
      "Good saving for future"
      0.5 4.0/5 "Great!"
      SBI FD account is good, 2 months back I opened this account through offline, I have invested some amount its good, the interest rate is around 8% per annum. The customer support is very good . I can access account through online banking its fine.
      Was this review helpful? 4
      , bangalore
      Reviewed on Feb 09, 2019
    • ICICI Bank Fixed Deposit
      "Need to increase the interest rate"
      0.5 5.0/5 "Blown Away!"
      I do have a fixed deposit account with ICICI and it was taken recently. I have chosen ICICI because my salary and saving account was maintained with them. I am getting good response from the customer service. They are giving average interest rate. I do monthly deposit of less than 50K.
      Was this review helpful? 5
      , mumbai
      Reviewed on Feb 09, 2019
    • Kotak Fixed Deposit
      "Good features"
      0.5 5.0/5 "Blown Away!"
      Kotak Mahindra Bank is good in their customer services. I bank with them for the fixed deposit. I could open this account online. The lock in period is for one and half year. The rate of interest is really good. I could also close the account online.
      Was this review helpful? 4
      , hyderabad
      Reviewed on Feb 07, 2019
    • SBI Fixed Deposit
      "Safe and secured investment"
      0.5 5.0/5 "Blown Away!"
      Currently FD interest rate is around 6.5% for per annum. I deposited one time amount of Rs. 2 lakhs for one year, I have activated the service through online, I have netbanking option to track the details, before expiry if we withdraw the amount but there will be interest various applicable.
      Was this review helpful? 5
      , bangalore
      Reviewed on Feb 07, 2019
    • HDFC Bank Fixed Deposit
      "Good"
      0.5 4.5/5 "Excellent!"
      I have a fixed deposit with HDFC which was started 2 years back. I have chosen it mainly for the interest rate and also its convenient to open this account online also am a salary account holder. The locking period is 5 years. I never faced issues with the customer service. They need an improvement on interest rate because I think it could be better.
      Was this review helpful? 4
      , bangalore
      Reviewed on Feb 01, 2019
    • SBI Fixed Deposit
      "Good for savings"
      0.5 4.0/5 "Great!"
      I have fixed deposit with SBI, I deposited one time amount of Rs. 2 lakhs. As per the bank norms rate of interest is 11.50%, I opened the account through bank, on time they activated the fixed deposit. There is no proper coordination with the staff end.
      Was this review helpful? 15
      , hyderabad
      Reviewed on Feb 01, 2019
    • review Fixed Deposit
      "Need scope of improvement on the online tech"
      0.5 4.0/5 "Great!"
      I have FD account with Janakalyan Sahakari bank, the interest rate is quite good. We can invested the minimum amount from Rs. 20,000 to max amount. I have term of one year, I opened the FD through branch, but for the activation they taken 48 hours. To track the FD details I need to visit to the bank.
      Was this review helpful? 5
      , mumbai
      Reviewed on Jan 28, 2019
    Common Loader Icon

    Display of any trademarks, tradenames, logos and other subject matters of intellectual property belong to their respective intellectual property owners. Display of such IP along with the related product information does not imply BankBazaar's partnership with the owner of the Intellectual Property or issuer/manufacturer of such products.

  • reTH65gcmBgCJ7k
    This Page is BLOCKED as it is using Iframes.