Can an NRI open a bank account?

Yes, NRIs can open a bank account in India. NRIs can open NRE, NRO accounts in the form of savings, current, term deposit or recurring deposit. They can also open a special account viz, FCNR term deposit account.

Types of bank accounts for NRIs

1. NRE (Non-Resident External) account

• To park and manage overseas earnings in India.
• Both principal and interest are fully repatriable.
• Interest earned is tax-free in India.
• Ideal for saving and transferring foreign earnings to India.
• Allows investment in IPOs, ESOPs, Rights Issues and Mutual funds.
• PIS approved accounts facilitate stock market trading and investment.

2. NRO (Non-Resident Ordinary) account

• To manage income earned in India.
• The principal amount can be repatriated up to USD 1 million per financial year with proper documentation and payment of applicable taxes. Interest is repatriable after tax deduction.
• Interest earned is subject to tax in India.
• Ideal for managing income sources like rent, pension, dividends, etc., in India.
• Allows investment in shares in secondary market, IPOs, rights issue, mutual funds, bonds and G-securities.

3. FCNR (Foreign Currency Non-Resident) Account

• To maintain deposits in foreign currency.
• Major foreign currencies (USD, GBP, EUR, etc.).
• Both principal and interest are fully repatriable.
• Taxation: Interest earned is tax-free in India.
• Ideal for NRIs who wish to avoid currency conversion risk and earn interest in foreign currency.