Difference Between NRE and FCNR Account | NRE vs FCNR Account

Non Resident External (NRE) Savings Account is an account which is maintained in Indian rupee by an NRI whereas Foreign Currency Non Resident (FCNR) account is a term deposit account that can be maintained by NRIs and PIOs in foreign currency.

There are many differences between NRE account and FCNR account as listed in the following table which would help you choosing between the two:

Difference between NRE and FCNR Account

Basis of DifferenceNon-resident Rupee Accounts(NRE) Foreign Currency Non Resident (FCNR)
Type of Accounts Can be opened as Savings Bank Deposit,
Current Account, Term Deposit
Vs
Can be opened as Term Deposit
PurposeOpened by NRIs who earn income abroad
and would like to remit it back to
India.
Vs
Opened by NRIs to park their overseas
income in foreign currency in India
without converting them into rupees.
Source of FundForeign funds or repatriable rupee funds
Vs
Foreign currency notes, Travellers
cheque, Currency Cheque, Wire Transfer
from overseas banks or Transfer funds
from an existing NRE account
Maintained inIndian Rupee
Vs
Foreign Currency e.g. USD, GBP, EURO,
AUD, YEN, etc.
Minimum BalanceUsually, Savings : Rs. 10,000, Term /
Fixed Deposit: Rs. 50,000
Vs
Usually, USD 1000, GBP 500, EUR 1000,
JPY 110000, AUD 1000, CAD 1000 - also
varies from bannk to bank
Period 1 Year to 5 Years
Vs
1 Year to 5 Years
Rate of Interest 7% to 9% depending on amount, period and
bank
Vs
For USD - 1.5% to 2.75%, GBP- 0.5% to
1.5%, etc. depending on currency, period
and bank
Joint Holding Allowed. Joint holders can be NRIs
residing in the same or different
countries
Vs
Allowed. Joint holders can be NRIs.
Nomination Allowed. Nominees can be Indian
Residents/NRIs
Vs
Allowed. Nominees can be Indian
Residents/NRIs.
RepatriabilityPrincipal as well as interest can be
entirely repatriable
Vs
Principal as well as interest can be
entirely repatriable
Tax Exemptions Interest is tax-free in India. However,
it would attract tax in the country of
residence of the account holder.
Vs
Interest is tax-free in India. However,
it would attract tax in the country of
residence of the account holder.
Currency RiskCurrency risk is there, there will be a
loss in case rupee depreciates further
at time of maturity and repatriation.
Vs
No currency risk as the investment is
made in foreign currency and is
withdrawn in the same currency.
Loan against this accountPermitted
Vs
Permitted