Whoever said wishes don’t come true hasn’t explored our offers!

Difference between NRE and NRO Accounts

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, HDFC, Kotak Mahindra, etc., which offer this facility of NRE and NRO Accounts.

NRE 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 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 Account & NRO 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.

Other Useful Reads :

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.

Savings Account Reviews

Page 1 of 3 1 2 3
  • Kotak
    "Worst bank ever"
    KOTAK MAHINDRA BANK
    0.5 0.5/5 "Unacceptable"
    Itâ??s not even worth one star rating. This is the second time I had applied and got an atm card and itâ??s again showing itâ??s various way to not trust again. After few months the card will start declining wherever I have to pay, will say that the mpin is wrong even if itâ??s right, if you want to pay through google or paytm also it wonâ??t work. This was the last time I got any card from this bank.
    Was this review helpful? 194
    , bangalore
    Reviewed on Mar 15, 2020
  • YES Bank
    YES Bank
    "Good"
    YES BANK
    0.5 4.0/5 "Great!"
    I think its nice to apply, it has been very fast and easy let's see what happens next if its open means I'll be very much happy person, pleas let me no soon that I can be a customer of this bank I had pan card permanent account number and I didn't have addar card though.
    Was this review helpful? 207
    , hyderabad
    Reviewed on Mar 20, 2019
  • Kotak
    "Better"
    KOTAK MAHINDRA BANK
    0.5 4.0/5 "Great!"
    I am having a Platinum Debit card from Kotak Mahindra Bank. The daily withdrawal limit is sufficient. I don't get any benefits on the card but its easily accessible everywhere. I got a hidden charges of 150 rupees which was debited from my account. There is no charges for other ATM swipes and there is no limitation.
    Was this review helpful? 238
    , mumbai
    Reviewed on Jan 28, 2019
  • Kotak
    "Worst Kotak 811 services"
    KOTAK MAHINDRA BANK
    0.5 0.5/5 "Unacceptable"
    Opened an account in December 2018 not received any call from customer care for document completion till yet also visited the nearest branch and no action has been taken . Worst services of this bank . Even the executive and staff has not been responsible and their behavior is also very rude.
    Was this review helpful? 242
    , new delhi
    Reviewed on Jan 16, 2019
  • YES Bank
    "Good"
    YES BANK
    0.5 4.0/5 "Great!"
    I think its nice to apply, it has been very fast and easy let's see what happens next if its open means I'll be very much happy person, pleas let me no soon that I can be a customer of this bank I had pan card permanent account number and I didn't have addar card though.
    Was this review helpful? 156
    , bangalore
    Reviewed on Oct 03, 2018
  • YES Bank
    "SUPER BANK"
    YES BANK
    0.5 5.0/5 "Blown Away!"
    I've been using the YES BANK Edge credit card for a while. The Value of the points are really good. I've already accumulated more than 15000 reward points. I am really impressed with the card and their services. I never had any issues with them.
    Was this review helpful? 125
    , hyderabad
    Reviewed on Sep 19, 2018
  • YES Bank
    "What to write? You can write a review about any Loan produc"
    YES BANK
    0.5 5.0/5 "Blown Away!"
    awesome great job i like your services i feel happy u provided help to need a urgent way tnq so much tnq bankbazar first time i am online visitor i cant explain how much i m happy bankbazar i would like too u say thnku bankbazaar your service is too much fast rapid
    Was this review helpful? 95
    , bangalore
    Reviewed on Mar 11, 2018
  • Kotak
    "Good Bank"
    KOTAK MAHINDRA BANK
    0.5 4.0/5 "Great!"
    I have a Kotak Bank i opened through Online portal. It is Very Easy to Open .Zero Rupees Charges.I ordered for a Debit card of kotak bank i got it delivered.Kotak App is Very User Friendly to Everyone.Zero balance maintain No Extra Charges..Quite Good App
    Was this review helpful? 156
    , bangalore
    Reviewed on Feb 16, 2018
  • Kotak
    "Decent Credit Card"
    KOTAK MAHINDRA BANK
    0.5 4.0/5 "Great!"
    I have a Salary account with them and the bank has offered a complimentary Credit card on the basis of this account. They have given me a Credit Limit of Rs.2.5 Lakhs, which I felt is quite a good one to have. One thing which let me down over here is their high interest rate. Also an added advantage is, they have good reward points system available with them.
    Was this review helpful? 105
    , chennai
    Reviewed on Jan 23, 2018
  • Kotak
    "Good"
    KOTAK MAHINDRA BANK
    0.5 4.0/5 "Great!"
    I am using domestic debit card of Kotak Mahindra Bank. The daily withdrawal limit was 25,000 rupees which was satisfactory. I am using this debit card for the last six months. There is no charge for other ATM swipe. ATM facilities are good and enough.
    Was this review helpful? 104
    , navi mumbai
    Reviewed on Jan 04, 2018
  • Kotak
    "Good service"
    KOTAK MAHINDRA BANK
    0.5 4.0/5 "Great!"
    Within 4days of time I got the car loan from Kotak Mahindra bank. The customer support is good with Kotak mahindra bank. The rate of interest which they have offered was low, when compared with other banks. The required loan amount has been disbursed and I am happy with it.
    Was this review helpful? 104
    , hyderabad
    Reviewed on Oct 16, 2017
  • RBL Bank
    "Ratnakar Bank Debit card "
    RBL BANK
    0.5 5.0/5 "Blown Away!"
    Ratnakar Bank debit card facility is too good. Very useful options for using debit cards at different pos and online payment system. Bank customers care facilities are also prompt in service with customer. RBL is rising bank in all villages.
    Was this review helpful? 228
    , pune
    Reviewed on Aug 21, 2017
  • Kotak
    "Kotak Mahindra Bank Fraud Services"
    KOTAK MAHINDRA BANK
    0.5 0.5/5 "Unacceptable"
    Kotak Mahindra Bank has **fraud banking services**. Rs. 800+ charge for other ATM Withdraws. 10000+ Charge for not maintaining minimum balance. 1000+ for delayed credit card payments. One Purchase = Service Tax+Conversion Charge+Interest Charge+Actual MRPâ?¦. **Close all your accounts** of Kotak Mahindra Bankâ?¦
    Was this review helpful? 234
    , bangalore
    Reviewed on Apr 06, 2017
  • Kotak
    "GOOD BANK BEST SERVICES GOOD JOB NICEBANK GOODRELATIONSHIP "
    KOTAK MAHINDRA BANK
    0.5 5.0/5 "Blown Away!"
    SUPPORTING WITH A MINIMUM WORKING TIME BANK QUICK DESISION WONDERFUL JOB GOOD PROVIDED BY OTHER BANKS LIKE ICICI, HDFC , IDBI , AXIS AND MORE NATIONALIZED BANKS FUTURE GOOD BANK MANAGMENT GOOD ALSO SUPPORT AND THANKS TO ALL THEY ARE HELPING PEOPLE THANK YOU AGAIN..
    Was this review helpful? 86
    , vadodara
    Reviewed on Mar 26, 2017
  • Kotak
    "Share a experience with Kotak Mahindra Bank on line service"
    KOTAK MAHINDRA BANK
    0.5 4.0/5 "Great!"
    I like Kotak Mahindra Bank because this bank replied fast comparing with another bank.The process was comleted process on line with in a five minute.its pleasant experience when compared with other bank services I like Kotak than another private sector banks.
    Was this review helpful? 46
    , ahmedabad
    Reviewed on Mar 25, 2017
  • Kotak
    "zero use for kotak rupay debit card"
    KOTAK MAHINDRA BANK
    0.5 0.5/5 "Unacceptable"
    i applied for a kotak mahindra rupay debit card after surrendering my existing visa debit card. firstly for some strange reason kotak doesnt allow rupay debit card as a addon card to my existing visa card. hence they automatically blocked my visa debit card on applying for rupay card. next i tried using the kotak rupay debit card on various POS terminals and online transactions. but it was declined everytime. later i got to know that they mention that it cant be used online. but there is no mention of non usage at POS too. after i tried it at around 20-30 machines i wrote them an email. to which they replied that there rupay card is not enabled for POS yet. and its not happening anytime soon. WHILE OTHER BANKS' RUPAY CARD WORKS EASILY ONLINE AS WELL AS AT POS, KOTAK CHOSES NOT TO ENABLE THESE. this card is only usefull for taking out cash from atm and that too only 10000. i was left bitterly dissapointed and have finally blocked it for reissue of visa debit card.
    Was this review helpful? 76
    , new delhi
    Reviewed on Mar 09, 2017
  • YES Bank
    "Average Experience"
    YES BANK
    0.5 4.0/5 "Great!"
    At present, I dont have an interest to take YES Bank debit card, Because I am an existing customer of HDFC and SBI bank, So I thought not to process with new bank. YES bank service was good and prompt. I hope YES Bank saving account processing fee would be Rs.15,000 to Rs.20,000.
    Was this review helpful? 20
    , warangal
    Reviewed on Dec 16, 2016
  • Kotak
    "Very Poor service - Dont go for it - i am frustrated ."
    KOTAK MAHINDRA BANK
    0.5 0.5/5 "Unacceptable"
    Deducted money, I tried to communicate with them, but I didnt get any response. having many features of KOTAK bank is not good when it comes to customer service. Do not open your account in Kotak bank they will not give you service. I am frustrated with Kotak bank. Very bad feelings.
    Was this review helpful? 74
    , pune
    Reviewed on Dec 15, 2016
  • Kotak
    "Make False Offer"
    KOTAK MAHINDRA BANK
    0.5 0.5/5 "Unacceptable"
    I'm a Kotak Platina Salary account holder which comes with a Kotak Platinum Debit Card. The Platinum Card holders has no withdrawal limit from Kotak and Non-Kotak ATM in india. Everything was going fine for last 1.5 year. I have been happily withdrawing cash around 10-15 times a month from Non-Kotak ATM. Suddenly they charged me with some CW Fee. Querying on that, I get to know that they downgraded my account upto five ATM transaction/Month. The reason of downgrading my account is many number of withdrawal of 300-400 INR. But still they are showing in the charges page the same unlimited Kotak and non-Kotak transaction. The link of the charges page is : http://www.kotak.com/service-charges.html
    Was this review helpful? 56
    , bangalore
    Reviewed on Dec 10, 2016
  • Kotak
    "Good overall"
    KOTAK MAHINDRA BANK
    0.5 5.0/5 "Blown Away!"
    I am happy with the services and response I received from Kotak Mahindra Bank for the debit card application. They contacted me and informed me all the details and the procedure as well. Since I went ahead with another bank, I cancelled my application with them. I do not wish to comment on the charges.
    Was this review helpful? 32
    , mumbai
    Reviewed on Dec 05, 2016
Common Loader Icon
Page 1 of 3 1 2 3
reTH65gcmBgCJ7k
This Page is BLOCKED as it is using Iframes.