Difference between NRO and NRE Account
24 December 2018 by Hope Curran
NRIs can open two types of accounts: NRO (Non-Resident Ordinary) and NRE (Non-Resident Rupee) account. NRO accounts are used to normally make payments locally and funds can be remitted from India (in rupees) or abroad. NRIs who are travelling abroad can convert their normal domestic account to NRO account. On the other hand, NRE account is maintained through remittances in foreign currency.
Another major difference is that NRE has tax advantages. No tax is deducted interest earned and principal amount from savings or NRE fixed deposit accounts. In the case of NRO account, there is a TDS that is deducted on interest income.
If you have a rented-out house in India, NRO is needed as you cannot deposit Indian rupees in an NRE account. If you make frequent transfers from India to abroad, NRE is a better option, as NRO has a limit on how many transfers you can make abroad.
Things to note while choosing the best NRE account
Look for a host of things. The first thing to look when opening the best NRE savings account is whether you can avail the service in the country of your residence. Check the interest rates also, as these are important if you have large sums of money. We have highlighted a few of the best NRE savings accounts. However, you should know that these could change over time, especially the interest and other facilities that these banks offer. In any case, here they go.