• 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

  • Page 1 of 32 1 2 3 4 5
    • Bank Bazaar Debit Card
      "Best"
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      , new delhi
      Reviewed on May 20, 2018
    • Bank Bazaar Debit Card
      "Very helpful"
      INDUSIND BANK LTD
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      , new delhi
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    • Bank Bazaar Debit Card
      "VERY NICE .ACCESS TO EASY AND EASY TO TRANSACTION.THANK YOU."
      YES BANK
      0.5 5.0/5 "Blown Away!"
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      , chennai
      Reviewed on May 18, 2018
    • Bank Bazaar Debit Card
      "FANTASTIC"
      INDUSIND BANK LTD
      0.5 5.0/5 "Blown Away!"
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      , hyderabad
      Reviewed on May 18, 2018
    • Bank Bazaar Debit Card
      "Nice Work"
      YES BANK
      0.5 3.0/5 "Satisfactory"
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      , chennai
      Reviewed on May 17, 2018
    • Bank Bazaar Debit Card
      "FANTASTIC"
      INDUSIND BANK LTD
      0.5 5.0/5 "Blown Away!"
      REALLY FANTASTIC. VERY EASY TO CREATE NEW ACCOUNT...CREATED WITHIN 5 MINS, CONGRATS AND THANK YOU FOR YOUR KIND SUPPORT BANK BAZAAR. AM SEARCHING FOR A ZERO BANK BALANCE ACCOUNT AND FINALLY I GOT THAT WITH THE HELP OF BANK BAZAAR. THANK YOU
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      , pondicherry
      Reviewed on May 16, 2018
    • Bank Bazaar Debit Card
      "Thank you "
      INDUSIND BANK LTD
      0.5 5.0/5 "Blown Away!"
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      , bangalore
      Reviewed on May 15, 2018
    • Bank Bazaar Debit Card
      "NICE "
      INDUSIND BANK LTD
      0.5 4.5/5 "Excellent!"
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      , jaipur
      Reviewed on May 13, 2018
    • Bank Bazaar Debit Card
      "Good"
      INDUSIND BANK LTD
      0.5 5.0/5 "Blown Away!"
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      , bangalore
      Reviewed on May 08, 2018
    • Bank Bazaar Debit Card
      "V good and good service"
      INDUSIND BANK LTD
      0.5 4.5/5 "Excellent!"
      Thank bank bazzar Nice work bank and bank bazar Bank bazaar service is very good, it would be good if bank bazaar gives the exact update on the bank partner. I know bank bazaar for more than 6 months time. The customer support service is excellent with the bank bazaar team and they will give immediate response to the customers.
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      , noida
      Reviewed on Apr 29, 2018
    • Bank Bazaar Debit Card
      "HELPFUL IN OPENING ACCOUNT"
      YES BANK
      0.5 5.0/5 "Blown Away!"
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      , manipal
      Reviewed on Apr 26, 2018
    • Bank Bazaar Debit Card
      " Life Insurance, Health Insurance and Car Insurance etc.You "
      INDUSIND BANK LTD
      0.5 5.0/5 "Blown Away!"
      Bank products like Savings Account, Credit Card, Fixed Deposit etcBANK BAZAAR is a good platform for all the financial products .I am not satisfied with the customer service and responses. The process was taking a long time other than that The website is user friendly .The web portals accuracy and speed is very good otherwise I am very much comfortable accessing this site.
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      , new delhi
      Reviewed on Apr 24, 2018
    • Bank Bazaar Debit Card
      "Band and bank bazar"
      INDUSIND BANK LTD
      0.5 5.0/5 "Blown Away!"
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      , gurgaon
      Reviewed on Apr 16, 2018
    • Bank Bazaar Debit Card
      "Not to say good or bad"
      YES BANK
      0.5 4.5/5 "Excellent!"
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      , noida
      Reviewed on Apr 14, 2018
    • Bank Bazaar Debit Card
      "Better for open new savings account and credit card"
      YES BANK
      0.5 4.0/5 "Great!"
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      , new delhi
      Reviewed on Apr 11, 2018
    • Bank Bazaar Debit Card
      "Awesome appreciate your help with this is a good though."
      YES BANK
      0.5 5.0/5 "Blown Away!"
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      , nellore
      Reviewed on Apr 11, 2018
    • Bank Bazaar Debit Card
      "its awesome "
      YES BANK
      0.5 5.0/5 "Blown Away!"
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      , ahmedabad
      Reviewed on Apr 02, 2018
    • Bank Bazaar Debit Card
      "Same family life settlement Bank are currently debit card "
      INDUSIND BANK LTD
      0.5 5.0/5 "Blown Away!"
      Personal Bank saving Lifestyle ok ,family savings account life settlement issues etc. but no problem I love bankbaaar live family savings personal account currently no problem AFI general welcome please lifestyle same welcome Bank Bazaar..
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      , coimbatore
      Reviewed on Apr 02, 2018
    • Bank Bazaar Debit Card
      "Bank bazzar is very platform in total service "
      YES BANK
      0.5 5.0/5 "Blown Away!"
      Bank bazaar is a very important process and very fast process in terms of loan& Other service, Bank bazaar is a very short process are credit score and process my experience is very help in my life with bank bazaar,,my friend is very interested in this service .
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      , nasik
      Reviewed on Mar 31, 2018
    • Bank Bazaar Debit Card
      "good"
      YES BANK
      0.5 4.5/5 "Excellent!"
      bank bazaar helped me to get the credit score.. even banks are not ready to disclose about this. and its free too.. and easy to choose best debit/credit cards. so i really refer bank bazaar to everone who is looking for credit or debit cards.. thank you
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      , new delhi
      Reviewed on Mar 31, 2018
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