Difference between NRE and NRO Savings Account
| NRE Savings Account | NRO Savings Account | |
|---|---|---|
| Who can open an account | NRIs (individuals / entities of Bangladesh / Pakistan nationality / ownership require prior approval of RBI) | Any person resident outside India (other than a person resident in Nepal and Bhutan). Individuals / entities of Pakistan nationality / ownership, entities of Bangladesh1 ownership and erstwhile Overseas Corporate Bodies2 require prior approval of the Reserve Bank. |
| Who can be a joint holder | Account can be held jointly by a Non-Resident Indian (persons of Indian nationality or origin) / by a Resident Indian (Former or Survivor basis). A Resident Indian can operate the account only as a Mandate / POA holder. |
Account can be held jointly by a Non-Resident Indian (Persons of Indian nationality or origin) / by a Resident Indian (Former or Survivor basis). |
| Nomination | Permitted | Permitted |
| Mandate Holder | An Indian resident can be authorised to operate the account and provided with a Debit Card* for the account |
An Indian resident can be authorised to operate the account and provided with a Debit Card for the account |
| Currency in which account is denominated | Indian Rupees (INR) | Indian Rupees (INR) |
| Repatriation | Principal and interest are fully repatriable | RBI allows repatriation only for i) current income ii) up to USD 1 (one) million per financial year (April - March), for any bonafide purpose after payment of applicable taxes. |
| Type of Account | Savings, Current, Recurring, Fixed Deposit | Savings, Current, Recurring, Fixed Deposit |
| Period of Fixed Deposits | Minimum tenure of 1 year to 5 years |
As applicable to resident accounts. |
| Taxation | Interest earned is exempted from Tax in India |
Interest is taxable under Indian Income Tax Act. However, NRIs can take the benefit of DTAA guidelines by submitting the requisite documents |
| Purpose | To deposit overseas savings remitted to India | To deposit Indian earnings like rent, Indian salary, dividend or any other current income |
1In terms of A.P.(DIR Series) Circular No. 82 dated February 11, 2013 Authorised banks are permitted to open NRO account of individual/s of Bangladesh nationality without the approval of the Reserve Bank subject to conditions.
2Overseas Corporate Body (OCB) means a company, partnership firm, society and other corporate body owned directly or indirectly to the extent of at least sixty per cent by Non-Resident Indians and includes overseas trust in which not less than sixty percent beneficial interest is held by Non-Resident Indians directly or indirectly but irrevocably, which was in existence as on September 16, 2003 and was eligible to undertake transactions pursuant to the general permission granted under Foreign Exchange Management Regulations.
*Only domestic card will be issued to the mandate holder.