What is the difference between NRE, NRI and NRO accounts?
NRO means the amount is kept in rupees and cannot be converted or repatriated back into foreign currency
NRI means Non Resident Indian. NRE and NRO are 2 types of NRI accounts.
A person who is eligible to open these accounts is called an Non-Resident Indian (NRI). It is defined as a person who has lived out of INdia for a period not less than 180 days during the previous year. It only signifies the resident status of an individual and not an account.
NRE account allow only remittances in foreign currencies. The account can be retained in designated foreign currencies viz USD, Pd stg, Euro and Yen. Alternatively the rupee equivalent of the amount converted at the exchange rates prevailing on the date of conversion is placed in the account. It is to be noted that the amounts lying in these accounts are freely repatriable, i.e the account holder is free to remit them out of the country. Transfer from one NRE account to another NRE account is allowed now. However remitting indian rupees into this account is not allowed. The cash withdrawals from this account are co ...more
2. NRE - Non Resident External - is a type of account, in which only "external money" that is foreign currency can be deposited. Thus, even while the account holder has an account in India, rupee can not be deposited, though it can be withdrawn.
3. NRO - Non Resident Ordinary is the account by a Non- resident Indian in India, in which rupee as well as foreign currencies can be deposited. Withdrawal is only in Indian rupee.
The Government of India has permitted NRIs to open rupee accounts in India in order to repatriate funds from their home countries. The two most common accounts are the NRE and NRO accounts. Lets take a closer look at them.
Whats an NRE account?
A Non-Resident External (NRE) account is a bank account thats opened by depositing foreign currency at the time of opening a bank account. This currency can be tendered in the form of travelers checks or notes.
Whats an NRO account?
A Non-Resident Ordinary (NRO) account is the normal bank account opened by an Indian going abroad with the intention of becoming an NRI. An NRI can also open this account by sending remittances from his home country or ...more
NRO- Nonresident ordinary It is non Repraitable A/C
Secondly here in case of NRE only foregin deposit is possible and rupee withdrawal is possible. In case of NRO both foreign and rupee deposit is possible but only rupee withdrawl is possible.
NRO account is to be redesignated as resident account immediately upon return.
NRE account is to be redesignated as resident account immediately upon return, or Funds be transferred to Resident Foreign Currency (RFC) Account immediately upon return.