What is an NRO and NRE Bank Account?

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Following are two main types of bank accounts which can be maintained by NRI / PIO in India:

  1. Non-Resident Ordinary Rupee Account (NRO Account)

    Any person resident outside India (including NRI or foreign national or non-Indian origin visiting India) can open NRO bank account with an authorized bank in India for the transactions in Indian Rupees. NRO Account can be of types including current, savings, recurring or fixed deposit accounts.

    NRI/PIO can remit money (transfer money to their foreign account) from the NRO account as long as they paid taxes in India.

  2. Non-Resident (External) Rupee Account (NRE Account)

    Any Non Resident Indian can open NRE Account. NRE account is usually opened by NRIs with their resident close relatives in India. The resident close relative are eligible to operate the account as a Power of Attorney holder for the limited purpose of withdrawal of local payments or remittances through normal banking channels to the account holder himself. NRE Account can be of types including current, savings, recurring or fixed deposit accounts. NRE account is maintained in Indian Rupees.

Both NRO and NRE accounts can be used to trade in the India Stock Market.

NRE/NRO Account Difference

NRE Vs NRO Bank Account

NRE (Non Resident External) Account NRO (Non Resident Ordinary) Account
Who can open this Account? Any NRI (Indian passport holder) can open NRE account. A Power of Attorney is usually given to a close relative in India to allow them to operate the account. Any person resident outside India (including NRI) can open NRO account.
Repatriation of Fund Both the principal and interest amount is freely repatriable. Only the interest is repatriable.
Exposure Account is exposed to the fluctuations in the value of the Indian Rupees for both the principal and interest. The account holder is exposed to the fluctuations in the value of the Indian Rupee only for the interest component.

Click here to read the detailed comparison of NRE and NRO Bank Account.


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Find more questions on this topic

  1. Which segments are available for trading to the NRIs in India?
  2. What all investment instruments are available for NRI or PIO Card Holders in India?
  3. Can NRI apply in IPO, FPO or other public issues?
  4. Can NRI trade in currency derivatives?
  5. Why intra-day trading is not available for NRI in India?
  6. How much brokerage does Zerodha charges to NRI account holders?
  7. What are ICICI NRI account brokerage charges?
  8. Why does a broker charge higher brokerage for NRI trading account?
  9. Can shares bought via PIS be transferred to another NRI Demat account?
  10. How does money transfer between NRI Trading and NRI Bank Account?
  11. Can PIO and OCI invest in the India Share Market?
  12. Does NRI required to change his resident Demat account to Non-resident?
  13. Does NRI need new trading account on becoming resident Indian or vice versa?
  14. What documents are required to open an NRI trading account?
  15. Is there an easy way to open and handle an NRI Trading account?
  16. I have trading account in india whom I don't like I moved to abroad and become NRI,I was thinking of converting my trading acc into NRI bcz of complexity of NRI trading ac, I decided to open a regular trading ac in India will there be any problem?
  17. I was using an ICICIDirect Trading and Demat account when I was resident Indian. My status is now changed to NRI and I wish to open it with discount broker. Can I transfer my existing holdings to the new broker?
  18. What are the negatives of operating resident accounts instead of NRI?
  19. Can NRI bank account be linked with resident trading and demat account?
  20. What all documents are required for Custody Account?
  21. Does an NRI require PIS permission to purchase shares in IPOs?
  22. Can NRI receive shares in inheritance?
  23. Why do we need NRI Bank Account? How do I open it?