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Difference Between NRE and NRO Account

The main difference between NRE and NRO Account. As an NRI you have option to open two types of saving accounts to manage income earned in India and abroad - non-resident rupee accounts (NRE), and non resident ordinary rupee account (NRO).

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

Difference between NRE and NRO Account

Basis of DifferenceNon-resident Rupee Accounts(NRE) Non Resident Ordinary Rupee Accounts(NRO)
Type of Accounts Can be opened as Savings Bank Deposit,
Current Account, Term Deposit
Vs
Can be opened as Savings Bank Deposit,
Current Account, Term Deposit
PurposeOpened by NRIs who earn income abroad
and would like to remit it back to
India.
Vs
Opened by NRIs who earn income in India
like income from rent from real estate
properties in their names or pension
etc.
Source of FundForeign funds or repatriable rupee funds
Vs
Local rupee earnings. Existing domestic
account of the residents can be
converted to NRO account on their taking
up employment/ business/immigration
abroad.
Maintained inIndian Rupee
Vs
Indian Rupee
Minimum BalanceUsually, Savings : Rs. 10,000, Term /
Fixed Deposit: Rs. 50,000
Vs
Usually, Savings : Rs. 10,000, Term /
Fixed Deposit: Rs. 50,000
Period 1 Year to 5 Years
Vs
1 Month to 10 Years
Rate of Interest 7% to 9% depending on amount, period and
bank
Vs
7% to 9% depending on amount, period and
bank
Joint Holding Allowed. Joint holders can be NRIs
residing in the same or different
countries
Vs
Allowed. Joint holder can be resident
Indians
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
Principle is not repatriable but current
income and interest earning net of taxes
is 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 taxable. Tax is deducted at
source(TDS) at 30% plus surcharge and
cess
Currency RiskCurrency risk is there, there will be a
loss in case rupee depreciates further
at time of maturity and repatriation.
Vs
Currency risk is there, there will be a
loss in case rupee depreciates further
at time of maturity and repatriation.
Loan against this accountPermitted
Vs
Permitted

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