bank accounts for nri: Types of bank accounts an NRI can open in India

A non-resident Indian (NRI) is an Indian citizen or a person of Indian origin residing outside India. A resident is a citizen who stays in India for at least 182 days in a financial year. NRIs can maintain bank accounts in India in the form of rupee or foreign currency accounts. The latter can be maintained only with RBI authorised dealers or banks.

Types of accounts

NRIs can maintain the following types of accounts:

NRE Account

NRE account is a rupee account maintained with a bank. Funds from an NRE account are freely repatriable. Interest credited to the NRE account is exempt from tax in the hands of the NRI. NRE accounts can be opened with funds remitted from abroad or generated in India.

NRO Account

NRIs can open NRO account for the purpose of putting through bona fide transaction in rupees. Balance in the NRO account is generally non-repatriable. However, funds in NRO accounts can be remitted abroad subject to such limits and conditions as may be prescribed by RBI directives at the time of repatriation. NRO account balances need to be used only for payments within India in rupees.

FCNR Account

Such accounts can be opened only in form of term deposits of 1 to 5 years. Deposits can be made in freely convertible foreign currencies. Only NRIs can be joint holders in an FCNR (B) account.

Points to note

• When a resident Indian becomes an NRI, he/she needs to inform the bank to convert the existing savings bank account to NRO account.
• An NRI returning to India can open Resident Foreign Currency to hold balances that he/she held in NRE or FCNR accounts.

(Content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)