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NRE Savings Account v/s NRO Savings Account

Savings Account
  • Instant money transfer
  • 24x7 ATM withdrawals
  • Attractive rate of interest

Managing one’s income is a crucial matter which must be dealt with utmost care and knowledge. However, when it comes to NRIs or Non-resident Indians, managing their income may be a little more complex. It often happens that an NRI may be earning income not only in the country they are residing but also in India in form of rent, pension, dividends, etc. Keeping them in mind, banks offer specialized deposit accounts which are NRE (Non-resident External) Accounts and NRO (Non-resident Ordinary) Accounts. Both these types of accounts are designed keeping the special financial needs of NRIs in mind and help them manage their income earned abroad as well as in India. There are several leading banks, public as well as private, like SBI, ICICI, HDFC, Kotak Mahindra, etc., which offer this facility of NRE and NRO Accounts.

NRE Savings Account

An NRE Savings Account opened in India will allow the account holder to safely and conveniently deposit funds that come from foreign earnings / transferred foreign earnings to India. All funds coming into an NRE Account, whichever currency they may be in, are converted into INR or Indian currency, hence allowing an NRI to maintain foreign currency earnings in Indian Rupees. The funds collected as well as the interest earned on NRE accounts is exempt from tax and account holders can repatriate the money any time.

NRO Savings Account

An NRO Savings Account opened in India serves the purpose of allowing NRIs to manage their income earned in India from sources like rent, pension, dividends, etc., while they are abroad. NRO account holders can also transfer foreign currency into an NRO account, which will be converted to Indian Rupees or INR. It is important to know that an NRO Account is not exempt from tax laws. Though it may only be opened by NRIs, an individual may also convert their existing resident savings account to an NRO account, when their residential status changes. So, a when I resident becomes an NRI, they have the option of converting their existing savings account held with a certain bank in India to an NRO account.

Distinguishing Factors - NRE Savings Account & NRO Savings Accounts

Both NRE and NRO Savings Accounts, though similar in many aspects, do have some major differences. In order to better understand the function and working of both these accounts, here is a low down about some major factors which distinguish an NRE Account from an NRO Account.

Currency Option For Fund Deposit

One of the major difference between an NRE and NRO Savings Account is the option each of them offer for deposit of funds. An NRE Savings Account will only allow you to deposit funds in a foreign currency while in an NRO Savings Account, you can also deposit funds in Indian Rupees.

Purpose

An NRE Savings Account basically serves the purpose of allowing you to transfer funds earned abroad to India and maintain them. An NRO Savings Account on the other hand serves the purpose of allowing you to accumulate and maintain the regular flow of income you may be earning in India by way of rent, dividends, pension, etc.

Repatriation of Funds

In simpler terms, repatriation means the inflow or outflow of currency to a foreign country. In this regard, NRE and NRO Savings account differ to some extent. One can conveniently repatriate funds, including the interest earned, from an NRE Savings Account. However, the RBI has imposed certain restrictions regarding repatriation from NRO Accounts. NRO Savings Account holders may only be allowed to remit up to USD 1 million during one financial year i.e. April to March.

Interest Rates

It is likely that interest rates offered on NRE and NRO Accounts may differ with different banks offering that facility. However, currently, most banks are offering rather similar rates of interest on both these accounts.

Tax Imposition

One of the major differences between NRE and NRO Savings Accounts could be the taxation laws which are applicable on each. NRE accounts are exempted from tax. Not only is the income but also the interest earned on these accounts is tax exempted. Hence, taxes like income tax, wealth tax, gift tax, etc., are not applicable in India.

However, following the Indian Income Tax Laws, NRO Accounts are not exempt from tax. Taxes like income tax, wealth tax, gift tax, etc., are applicable to NRO Accounts. Also, interest earned on an NRO Account is taxable as well. NRO Account holders, do, however, have the reduced tax benefit which they may avail under the Double Taxation Avoidance Agreement (DTAA).

Account Holding

An NRE Joint Account or an NRO Joint can be opened by two NRIs. However, an NRE Joint Account cannot be opened by an NRI along with a resident Indian. This is only allowed in the case of a joint NRO Account.

Exchange Rate Fluctuation

Exchange rates can result in considerable loss of currency. Keeping that in mind, NRE accounts are open to two kinds of loss due to exchange rates which are, daily fluctuations in the value of the rupee or INR, as well as conversion loss. However, NRO Accounts are safe from both these exchange rate fluctuations. 

Fund Transfer

When opening an account, one of the primary concerns one may have are regarding transfer of funds, may it be to a family, friend or for any work related purpose. As an NRE Account holder, you can transfer money not only to another NRO account but to n NRO account as well. However, as an NRO account holder, you may only transfer money to another NRO account. You cannot transfer money to an NRE account from an NRO account.

Deposit / Withdrawal of Funds

Deposit or withdrawal of funds is also one of the more important factors differentiating an NRE Account from an NRO Account. Funds originating from a foreign country (foreign currency) can be deposited in both NRE and NRO accounts. However, funds originating in India i.e. in Indian Rupees or INR can be deposited only in NRO Accounts and not an NRE Account. Withdrawals, however, can only be made in Indian Rupees or INR from both NRE and NRO Accounts.

Choosing the right account which best addresses one’s financial needs can make a world of a difference. Keeping in mind the differences which define an NRE Account from an NRO account, it would help if you can evaluate your requirements before choosing between any of these two accounts. However, since both these accounts have been designed after giving due consideration of an NRIs financial needs, they will undoubtedly offer a convenient and secure solution to help manage funds from across the globe.

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Savings Account Reviews

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  • Bank Bazaar Debit Card
    "sam review"
    YES BANK
    0.5 4.0/5 "Great!"
    maximam or minimam 5 to -8 step to get loan deatils andalso credite socre in yor mobile or pc in 5mints so esaily to get cridet socre and detials in your mobile and also if you esily to kinow your detils in your hands and also its safty and also trustabule
    Was this review helpful? 0
    , chennai
    Reviewed on Jul 18, 2019
  • YES Bank
    Bank Bazaar Debit Card
    "Easy to bank process helping the bankbazzar..."
    YES BANK
    0.5 5.0/5 "Blown Away!"
    Super very fantastic.... bankbazar are helping Easy in bank process......wow wonderful bankbZar.. itâ??s very nice bankbazar... very smoothly in bank bazar ..... it is benefit in this generation.... we are bank process using must used in the bankbazar.... it is very simple, less time, no pressure, no loss money, and save in time and money..... the generation is very using this bankbazar.com.......
    Was this review helpful? 3
    , chennai
    Reviewed on Jul 14, 2019
  • Bank Bazaar Debit Card
    "veeras review"
    YES BANK
    0.5 4.0/5 "Great!"
    maximam or minimam 5 to -8 step to get loan deatils andalso credite socre in yor mobile or pc in 5mints so esaily to get cridet socre and detials in your mobile and also if you esily to kinow your detils in your hands and also its safty and also trustabule
    Was this review helpful? 10
    , chennai
    Reviewed on Jul 04, 2019
  • Bank Bazaar Debit Card
    "May bnak account"
    YES BANK
    0.5 2.0/5 "Expected more"
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    , surat
    Reviewed on Jul 01, 2019
  • Bank Bazaar Debit Card
    "Seving account "
    YES BANK
    0.5 5.0/5 "Blown Away!"
    Bankbazaar customer service good and awesome ð??? mujhe bahut atcha laga kiyu ki kotak Mahindra bank open kiya tha jaldi ho gaya good work aur aaj mainne yes bank open Kar liya Sayed jaldi ho jaye kiyu ki mujhe Thora jaldi chahiye atcha bahut hi atcaha hain
    Was this review helpful? 0
    , guwahati
    Reviewed on Jul 01, 2019
  • Bank Bazaar Debit Card
    "simple to get"
    YES BANK
    0.5 4.5/5 "Excellent!"
    maximam or minimam 5 to -8 step to get loan deatils andalso credite socre in yor mobile or pc in 5mints so esaily to get cridet socre and detials in your mobile and also if you esily to kinow your detils in your hands and also its safty and also trustabule
    Was this review helpful? 0
    , guntur
    Reviewed on Jun 28, 2019
  • Bank Bazaar Debit Card
    "dc review"
    YES BANK
    0.5 3.0/5 "Satisfactory"
    VERY GOOD, I KNOW MY SCORE BY BANKBAZAAR, ITS GOOD AND RESPONSIVE SITE, I ITS GOOD FOR EVERYONE, HELLO FRIENDS IT NOW AND TRY KNOW TO YOUR CREDIT SCORE. THANKS YOU BANK BAZAAR FOR SHOW MY CREDIT SCORE.......HELLO FRIENDS IT NOW AND TRY KNOW TO YOUR CREDIT SCORE. THANKS YOU BANK BAZAAR FOR SHOW MY CREDIT SCORE......................................
    Was this review helpful? 3
    , chennai
    Reviewed on Jun 27, 2019
  • Bank Bazaar Debit Card
    "Good service"
    YES BANK
    0.5 5.0/5 "Blown Away!"
    Very nice and online process Very easy to apply and intrastate this only See all of opening a account in yes bank via bankbazaar.com Very easy to apply for further savings. So apply for the account in our bank in okok good very much for you
    Was this review helpful? 4
    , chennai
    Reviewed on Jun 25, 2019
  • Bank Bazaar Debit Card
    "Very good"
    YES BANK
    0.5 5.0/5 "Blown Away!"
    This is helpful great job good service by this side it was a good experience good service i know my score by bankbazar bas haan hoon kaitna hi kehna chahta hoo. Isse zyada kuch nhi but haan bhuot achi service hai is side ki i thanfull for this side
    Was this review helpful? 3
    , jaipur
    Reviewed on Jun 23, 2019
  • Bank Bazaar Debit Card
    "good service by the this site and its help forthe future hel"
    YES BANK
    0.5 5.0/5 "Blown Away!"
    good service by the this site and its help forthe future help for more and the its help custmers in the athis section and also its provide the loans in term of our business is good time, its help for the business its was gooid experince the customer suport are good the was help to me.
    Was this review helpful? 7
    , meerut
    Reviewed on Jun 22, 2019
  • Bank Bazaar Debit Card
    "good service"
    YES BANK
    0.5 5.0/5 "Blown Away!"
    good service by the this site and its help forthe future help for more and the its help custmers in the athis section and also its provide the loans in term of our business is good time, its help for the business its was gooid experince the customer suport are good the was help to me.
    Was this review helpful? 7
    , hubli
    Reviewed on Jun 18, 2019
  • Bank Bazaar Debit Card
    "VERY GOOD, I KNOW MY SCORE BY BANKBAZAAR"
    YES BANK
    0.5 5.0/5 "Blown Away!"
    VERY GOOD, I KNOW MY SCORE BY BANKBAZAAR, ITS GOOD AND RESPONSIVE SITE, I ITS GOOD FOR EVERYONE, HELLO FRIENDS IT NOW AND TRY KNOW TO YOUR CREDIT SCORE. THANKS YOU BANK BAZAAR FOR SHOW MY CREDIT SCORE......................................
    Was this review helpful? 5
    , faridabad
    Reviewed on Jun 12, 2019
  • Bank Bazaar Debit Card
    "Great Service "
    YES BANK
    0.5 5.0/5 "Blown Away!"
    It was a good experience with Bankbazaar as they contacted me on time and informed me the details. The website is also good and supportive. The customer support and response is timely and I had no hassles to get connected with the bank. The bank was also helpful to me.
    Was this review helpful? 10
    , bhubaneshwar
    Reviewed on Jun 06, 2019
  • Bank Bazaar Debit Card
    "Best bankbazar"
    YES BANK
    0.5 4.5/5 "Excellent!"
    Is it a awesome application to get any kind of transection. I love it . This is 100% real. I will give an advice if you need urgent money or any kind of loan go and resister you account with your contact number. It will very helpful to you . Thank you
    Was this review helpful? 10
    , mumbai
    Reviewed on Jun 04, 2019
  • Bank Bazaar Debit Card
    "Great "
    YES BANK
    0.5 5.0/5 "Blown Away!"
    Very easy concept Simple method any body can understand easily execellent Fabulous awesome work ur team members very impressive n attractive work every thing is superb Thanks a lot . I requesting you all ladies and gentlemen kindly at least one time visit in bank bazaar website
    Was this review helpful? 14
    , visakhapatnam
    Reviewed on May 30, 2019
  • ICICI Bank Debit Card
    "Good"
    ICICI BANK
    0.5 5.0/5 "Blown Away!"
    I am using ICICI debit card for almost 10 years. They have provided me a domestic card. There is no yearly charges because of my salary account. There is no benefits and the accessibility of the card is good. The daily withdrawal limit is sufficient. ATM's are pretty good.
    Was this review helpful? 23
    , kolkata
    Reviewed on May 12, 2019
  • Bank Bazaar Debit Card
    "Working good"
    YES BANK
    0.5 4.5/5 "Excellent!"
    Bank Bazaar Working is good, This app is so cool Good working this app download the App now for shopping and banking loan purpose also for car loans bike loan Health Insurance and credit scores and saving bank account all in one and good app download now working will be good.
    Was this review helpful? 17
    , jamshedpur
    Reviewed on May 08, 2019
  • Bank Bazaar Debit Card
    "Experience is good"
    YES BANK
    0.5 4.0/5 "Great!"
    The experience at Bankbazaar has been good and there are no hassles in the process. The customer support and response is good. They were on time to reach out and give me the necessary details. The website is good and it is easy to use and understand as well.
    Was this review helpful? 5
    , pondicherry
    Reviewed on May 07, 2019
  • Bank Bazaar Debit Card
    "Loan & credit card"
    YES BANK
    0.5 4.5/5 "Excellent!"
    I applied for personal loan ,but so late.same as to credit card.so processing is too slow.if you take it speedy than we will very happy.plz give me My personal loan & credit card.I m in so much problem.I updated all documents.thanks bank bazaar.
    Was this review helpful? 23
    , bangalore
    Reviewed on Apr 30, 2019
  • Bank Bazaar Debit Card
    "Response"
    YES BANK
    0.5 5.0/5 "Blown Away!"
    Thank you so much yes bank Your bank accept my details to provide my account . So please my accounts number and details to provide me fast. I am very exited because my account open in your bank . So next time always do my help . Thank you so much
    Was this review helpful? 21
    , indore
    Reviewed on Apr 29, 2019
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