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Difference?

RAHUL (Student) (206 Points)

12 October 2019

what is the difference between NRI, NRE and NRO account.?

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 12 October 2019

An NRI Account refers to the accounts opened by a Non-Resident Indian (NRI) or a Person of Indian Origin (PIO) with a bank or financial institution which is authorized by the Reserve Bank of India (RBI), to provide various services.

Here are the types of NRI Accounts that you can opt for, to meet your financial requirements.

Non-Resident External (NRE) Accounts
Non- Resident Ordinary (NRO) Accounts
Foreign Currency Non-Resident (FCNR) Accounts

Non-Resident External (NRE) Accounts

The Non-Resident External (NRE) Account allows you to transfer your foreign earnings easily to India. However, this type of account is rupee dominated and can be opened in the form of Current, Savings, Fixed or Recurring Deposits.

It is vital to know that there is no tax levied on the interest earned from these accounts, i.e. they are tax exempt, and they are also easily repatriat-able, i.e. transferable. These accounts can be jointly opened with close relative Resident Indian on Former or Survivor basis.

Non- Resident Ordinary (NRO) Accounts

The Non-Resident Ordinary (NRO) Account are primarily opened for depositing rupees earned in India. Foreign earnings can also be deposited in this account. When an Indian citizen goes abroad for a job with an intention to stay there, his resident accounts should be converted into an NRO Account by the bank. Therefore, it is essential to inform the bank about the individual's departure abroad.

Also, it is vital to know that NRO Accounts are rupee dominated and can be opened in the form of Savings, Current, Recurring Deposits or Fixed Deposits. These accounts can be jointly opened with any Resident Indian on Former or Survivor basis.

Foreign Currency Non-Resident (FCNR) Accounts

The Foreign Currency Non-Resident (FCNR) Account can be opened in different currencies such as US Dollars, Canadian Dollars, Australian Dollars, Sterling Pounds, Euro, Japanese Yen, etc. These FCNR Accounts can be opened in the form of term deposits for different maturity periods of 1 year and above upto 5 years.

More details refer::: nri-types-of-accounts-faqs

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Kapadia Pravin (17249 Points)
Replied 17 October 2019

An NRE account is a bank account opened in India in the name of an NRI, to park his foreign earnings;

whereas, an NRO account is a bank account opened in India in the name of an NRI, to manage the income earned by him in India.

NRI is Non Resident Indian. NRI has been defined differently in various Acts.

Under income tax -----

The current tax law states that an Indian citizen who stays abroad for employment or is carrying on business for an uncertain duration is a non-resident. However, an NRI becomes a 'resident' of India in any financial year, if he stays in India for 182 days or more.