NRO, NRE and FCNR Accounts: Key Differences between NRI Accounts

Are you aware that you need to open a non-resident Indian (NRI) account if you reside abroad (outside India) for around 182 days? You can open NRO, NRE and FCNR accounts based on your requirement, to park your funds in India in different currencies.

Explore the key differences between NRE, NRO, and FCNR accounts here to determine which one to open. Additionally, check out the eligibility criteria, documents required and benefits of these accounts to make an informed decision. 

Key Highlights

• NRO and NRE accounts can be savings, current accounts, recurring deposits or fixed deposits
• FCNR accounts are solely fixed deposits.
• The fixed deposit rates for NRO, NRE and FCNR accounts can be the same or different from resident accounts.

Key Differences Between NRO, NRE and FCNR Accounts

NRO, NRE and FCNR accounts (Non-resident Ordinary, Non-resident External and Foreign Currency Non-resident accounts) differ in terms of taxability, deposit and withdrawal currency. Here are the differences between these 3 NRI accounts in detail:

Eligibility Criteria to Open NRI Accounts

The primary eligibility criteria to open NRI accounts are that you should be employed abroad, own a business or carry out trade in any foreign country. Here are the other eligibility criteria:

• You need to be employed with the Indian Navy, an oil rig, an airline registered to a foreign country, or a shipping company abroad for at least 182 days.
• In case you are a government employee carrying a diplomat passport, you will be eligible.
• If you are a student residing abroad for education, you will be eligible.

Documents Required to Open NRI Accounts

You might have to provide photocopies of multiple pages of your passport to open an NRI account. The other documents that you need to present are as follows:

• Proof of employment
• Employment Visa, student visa, employment permit or residence visa
• KYC documents, such as identity and address proof

Benefits of Opening NRO, NRE and FCNR Accounts

One of the benefits of opening NRO, NRE and FCNR accounts is that you can use the funds to participate in stock market trading or invest in the Indian market. Here are the other benefits:

• If you hold an NRE or FCNR account, you can earn tax-free interest in India.
• You can earn high interest from fixed deposits in India to maximise your wealth.
• FCNR and NRO accounts allow you to avoid foreign exchange rate fluctuations for money deposited in the respective accounts.

Final Words

NRO, NRE and FCNR accounts differ significantly in terms of taxability. While interest income from NRO accounts is taxable in India, you can earn tax-free interest on NRE and FCNR accounts. 

If you are an NRI who returned to India recently, you can convert your NRI accounts to resident Indian accounts and open fixed deposits. You can check out the Stable Money-partnered banks offering DICGC-insured fixed deposits at up to 8.10% interest per annum.

Download the Stable Money app now to book fixed deposits 24*7!