NRE vs NRO vs FCNR Account Picker
Answer three quick questions about your income and preferences to see which NRI account type suits your situation, and why.
This decides which account you're legally required to use -- income earned in India can only go into an NRO account.
This affects which caveats apply to your recommendation, not which account type you're eligible for.
Only relevant for foreign-sourced income -- an NRO account is always held in INR regardless.
Your recommended account type
NRE
Since this money comes from abroad, it qualifies for NRE or FCNR. You're comfortable with INR exposure, so NRE is the simpler choice -- an INR account funded by your foreign remittances, with principal and interest fully and freely repatriable, and interest that's tax-free in India.
NRE (Non-Resident External) Account
- Currency
- Indian Rupees (INR)
- Funded by
- Foreign income/earnings remitted to India from abroad
- Repatriation
- Principal and interest are fully and freely repatriable, with no cap
- Tax on interest
- Interest is tax-free in India
NRO (Non-Resident Ordinary) Account
- Currency
- Indian Rupees (INR)
- Funded by
- Income earned or accrued in India -- rent, dividends, pension, sale proceeds, etc. (can also hold remitted foreign income)
- Repatriation
- Repatriation capped at USD 1 million per financial year, after taxes and with a CA certificate (Form 15CA/15CB)
- Tax on interest
- Interest is taxable in India, with TDS deducted at source
FCNR (Foreign Currency Non-Resident) Account
- Currency
- Held in a foreign currency (USD, GBP, EUR, etc.) as a term deposit -- not INR
- Funded by
- Foreign income/earnings remitted to India from abroad
- Repatriation
- Principal and interest are fully and freely repatriable, with no cap
- Tax on interest
- Interest is tax-free in India
This picker explains the general FEMA/Income-tax rules for NRE, NRO, and FCNR accounts, but individual banks may add their own conditions (minimum deposit, tenure, documentation). Confirm the specifics with your bank before opening an account, and consult a tax advisor for your personal situation. This is not financial or legal advice.
How the Account Picker Works
NRE, NRO, and FCNR accounts are each built for a different purpose, and picking the wrong one is a common, easily avoidable mistake. This tool asks a few plain questions -- where your money comes from, whether you need to repatriate it, whether you want to avoid rupee exchange-rate risk -- and recommends the account type (or combination) that actually fits, then shows the full side-by-side comparison so you can see why.
The short version: NRE holds foreign earnings in rupees, is fully repatriable, and its interest is tax-free -- but it carries INR exchange-rate risk. NRO is where India-sourced income (rent, dividends, a pension) must go, is taxable with TDS, and repatriation is capped at USD 1 million a year with a CA certificate. FCNR holds your money in a foreign currency itself, avoiding rupee risk entirely, with tax-free interest, but is only available as a fixed-tenure deposit, not a regular savings/current account.
Frequently asked questions
Do I need all three account types?
Most NRIs end up with at least an NRO account (mandatory for any India-sourced income) and often an NRE account too (for remitting and holding foreign savings tax-free). FCNR is more of an optional addition for those specifically wanting to avoid rupee depreciation risk on a fixed deposit.
Can I convert my existing resident savings account instead of opening a new one?
No -- once your residential status changes to NRI, RBI/FEMA rules require you to convert your resident savings account to an NRO account (or close it); you cannot continue operating a regular resident savings account.
Which account should my rental income from an Indian property go into?
NRO. Rent is India-sourced income, so by FEMA rules it cannot be credited to an NRE or FCNR account -- it must go through NRO, where it will also be subject to TDS.