What are the types of NRI Accounts?
There are various types
of NRI Accounts that are available to an NRI Investor. Some of the major ones
are-
●
Non-Resident External
(NRE) Savings Account/ Fixed Deposit Account
●
Non-Resident Ordinary
(NRO) Savings Account/ Fixed Deposit Account
●
Foreign Currency Non
-Resident (FCNR) Fixed Deposit Account
NRE Savings Account /Fixed
Deposit Account :
- The NRE account is an Indian rupee-denominated account opened by an NRI in an Indian bank.
- NRI uses this account to deposit earnings in the foreign land.
- It offers savings, current, recurring, or fixed deposits.
- Interest income earned on the amount in an NRE account is non-taxable in India.
How NRE account works :
Foreign Currency earned outside India (thats why it is NRE-External)
↓
Foreign Currency converted to INR
↓
Deposits in the form of INR
↓
Repatriation of funds (Principal & Interest amount) to a foreign account on maturity .
Non-Resident Ordinary (NRO) Savings Account/ Fixed Deposit Account:
- The NRO account is an Indian rupee-denominated account opened by an NRI in an Indian bank.
- NRI uses this account to deposit income generated from within India.
- It offers savings, current, recurring, or fixed deposits.
- Interest income earned on the amount in an NRO account is taxable in India.
- The funds of NRO are easily accessible to your family members in India
- The amount deposited and the earnings on this account can be Repatriated to the country of residence up to 1 million USD per financial year.
How NRO account works :
Income generated by an NRI in India
↓
Deposits in the form of INR
↓
Repatriation of funds to a foreign account on maturity with limits .
Foreign Currency Non-Resident Account (FCNR Account):
- The FCNR account is a foreign currency denominated account opened by an NRI in an Indian bank.
- There is no risk of exchange rate fluctuations as it is foreign currency denominated account
- It offers exclusively fixed deposits.
- NRI uses this account to deposit earnings in the foreign land.
- FCNR (A) was introduced in 1975 to encourage NRI deposits. In 1993, RBI introduced FCNR (B), to replace FCNR (A).
- At present there is no FCNR (A) account and only FCNR (B) account is there.
- Interest income earned on the amount in an NRE account is non-taxable in India
How FCNR account works :
Foreign Currency earned outside India
↓
Foreign Currency converted to INR
↓
Deposits in the form of INR
↓
Repatriation of funds (Principal & Interest amount) to a foreign account on maturity .
