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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 Differance

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.
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Find more questions on this topic

  1. What all trading segments are available for share trading to the NRI's 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 broker charges higher brokerage for NRI trading account?
  9. Can I transfer the shares I bought through the PIS route as NRI to another demat account?
  10. How does money get transferred between my Trading Account and my NRI Bank Account?
  11. Can PIO (Person of Indian Origin) and OCI (Overseas Citizen of India) invest in the India Share Market?
  12. In case a person who is resident in India becomes a non-resident, will he be required to change the status of his holding from Resident to Non-Resident?
  13. In case a non-resident Indian becomes a resident in India or vice versa, will he/she be required to open a new trading account?
  14. What are the documents required to open a NRI trading account?
  15. Is there an easy way around to avoid the complexity of NRI Trading Account opening and handling?
  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 the resident trading and demat account instead of NRI?
  19. Services offer to NRIs in India lead lot of charges I'm planning to open trading and demat Ac on my mother's name who lives in India while opening Ac, in bank Ac detail section can I put my NRI Ac no. while demat and trading will belong to my mother?
  20. What all documents are required for Custody Account?
  21. Does an NRI requires PIS permission to purchase shares in IPOs?
  22. Can NRI receive shares in inheritance?
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