NRE and NRO Accounts: Six Points of Difference
16 Oct 2020

NRE and NRO Accounts: Six Points of Difference

Open an NRI Savings Account

Reading Time: 4 Minutes

Key Takeaways: We understand that Non-Resident Indians like you have several financial needs. These include managing wealth and saving for the future. If you have the right bank account, you can utilise your savings for investments, sending money to India and repatriation. The best way to carry out these transactions is through NRE and NRO accounts. Let us take a look at the features of both these accounts.

NRE and NRO accounts help NRIs like you to keep your money safe and give you seamless access to it, wherever you are. Each account has a different objective.

Six differences between NRE and NRO accounts

  1. Definition: Short for Non-Resident External, an NRE Account is a bank account held by NRIs to park their foreign earnings. A Non-Resident Ordinary or NRO Account is a one where NRIs can deposit both INR and foreign currencies, and manage their earnings and expenses in India.
  2. Taxability: A significant difference between NRE and NRO accounts is that the interest earned in an NRE account is tax-free in India, while you have to pay income tax on interest earned from an NRO savings account in India.
  3. Withdrawals and Deposits[1]: An NRE savings account allows deposits in foreign currencies. An NRO savings account is primarily for deposits in INR; although it enables deposits in other currencies as well. You can make withdrawals only in INR from both accounts.

Open an NRI Savings Account

  1. Repatriability: You can repatriate funds (principal and interest) from an NRE account freely and completely. If you want to repatriate funds from an NRO account, the limit is USD 1 million in a financial year.
  2. Account opening purpose: You may want an NRE account if you have family back in India and wish to take care of their expenses. It makes the remittance transactions seamless and the account also allows you to get better interest rates than what is currently prevailing in most developed countries. An NRE account will also come handy if you intend to repatriate the funds to your current country of residence.

    An NRO account is great if you wish to deposit your income from India. This could be rent from your residential property in India or interest from Indian fixed deposits and other assets. You can also use the account to make investments and pay for bills or other purchases in India.

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  3. Holding Structure: You can hold an NRE account jointly with another NRI family member; you can also have a resident joint account holder only in former or survivor mode of operation. You can hold an NRO account jointly with another NRI or resident Indian relative.



Non-Resident External (NRE) Account

Non-Resident Ordinary (NRO) Account


Only foreign currency

Foreign and Indian Currency


Indian Rupees

Indian Rupees


Tax-free interest

Taxable interest


Fully repatriable

Partially Repatriable

Account Purpose

To manage funds earned in foreign country

To manage funds earned in India and overseas

Holding Structure

Can be held jointly by 2 NRIs

Can be held jointly by 2 NRIs or an NRI and Indian Resident


Final Note: Though there are several differences between an NRE and NRO account, you will need both to manage your funds. An NRE account proves useful for your foreign earnings and you can even send money back to your country of residence freely. An NRO account helps keep your income earned in India safe and within India.

Why miss out on a signature banking experience at DBS Treasures? Open your NRI accounts with us today!

References: 1

Open an NRI Savings Account