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 |
Purpose | Opened 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 Fund | Foreign 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 in | Indian Rupee | Vs | Indian Rupee |
Minimum Balance | Usually, 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 |
Repatriability | Principal 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 Risk | Currency 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 account | Permitted | Vs | Permitted |