Introduction

Moving to another country doesn't mean you have to leave your money behind. As a Non-Resident Indian (NRI), you may still have family, property, or business interests in India. If so, you need to know how to manage your money across borders. The right banking service can make a big difference, whether sending money home, saving in Indian currency, or investing in domestic opportunities. That's when NRI accounts come in.

These accounts are made just for Indians living abroad and make it easier to send money to India, make sure you follow Indian banking rules, and provide you with easy access to your money from anywhere in the globe. But here's the problem: there isn't just one "NRI account."

There are three types of NRI accounts, each with its own features, benefits, and best uses. Your choice of account can have an effect on tax obligations, interest, and ease of managing your money.

Begin Investing with an NRI Demat Account

Let’s look at each one in detail:

Non-Resident External (NRE) Account

This account is designed to hold savings from income earned abroad. The account is maintained in Indian Rupees (INR); hence, any funds you deposit into it are converted to INR at the current exchange rate.

The principal and interest are both fully repatriable, which means you can send the money anywhere in the world. One major benefit of this account is that interest earned is not taxed in India at all. You can also open a joint NRE account with another NRI or a resident Indian who is a close relative as described by the Companies Act, 2013.

Non-Resident Ordinary (NRO) Account

The NRO account is designed to manage funds from outside India in addition to income received in India, such as rent, dividends, or pensions. The account is maintained in INR, and any deposits made in foreign currency are converted to INR at the current exchange rate. This account can be used to transfer payments globally, meeting financial requirements for both domestic and international activities.

The interest received on this account is subject to Tax Deducted at Source (TDS), which is not the case with NRE accounts. You can open an NRO account with another NRI or a resident Indian.

Foreign Currency Non-Resident (FCNR) Account

An FCNR Account is a foreign currency fixed deposit account that enables you to maintain your savings without converting them to INR. It is an excellent option for NRIs who wish to protect their funds from fluctuations in foreign currencies while simultaneously generating consistent returns. International financial transfers are effortless because principal and interest are wholly repatriable.

Another benefit is that the interest on this account is tax-free in India. Since the account is maintained in foreign currency, your savings are protected from exchange rate fluctuation, making it a safe and convenient solution for long-term deposits. You can open this account jointly with another NRI, or with a resident Indian who is a close relative, as per terms and conditions.

Conclusion

As an NRI citizen, you have three account options for your NRI account. Each one has its own unique set of features, regulations, and currency terms. Choose the account that best suits your needs to access and manage your funds in your home country, regardless of where you work or earn money.

Know More - Resident to NRI Demat Account Conversion | NRI Taxation | NRE, NRO & NRI Trading Accounts | NRI Investing Guide | NRI Demat Account vs Residential Demat Account | NRI Income Tax | NRI Multiple Accounts | Mutual Fund Taxation for NRIs