The three NRI account types serve completely different purposes — and picking wrong costs you real money in tax and exchange-rate losses. Here's the clear comparison: taxation, repatriation, currency risk, and exactly which account fits your situation.
The one-line rule: money coming FROM abroad → NRE. Money earned IN India → NRO. Money you'll take BACK abroad and can lock for 1–5 years → FCNR. Most NRIs end up needing NRE + NRO together, with FCNR as an optional add-on.
| Parameter | NRE | NRO | FCNR(B) |
|---|---|---|---|
| Full form | Non-Resident External | Non-Resident Ordinary | Foreign Currency Non-Resident (Bank) |
| Held in | Indian Rupees (INR) | Indian Rupees (INR) | Foreign currency (USD, GBP, EUR, JPY, CAD, AUD…) |
| Source of funds | Foreign earnings remitted to India | Income earned in India (rent, dividends, pension) + transfers | Foreign earnings |
| Account types | Savings, Current, FD, RD | Savings, Current, FD, RD | Term deposit only (1–5 years) |
| Interest tax in India | Fully exempt | Taxable — 30% TDS + surcharge/cess | Fully exempt (while NRI/RNOR) |
| Repatriation | Free — principal + interest, no limit | Up to USD 1 million/FY, taxes paid, Form 15CA/CB | Free — no limit |
| Currency / exchange risk | Yes — balance is in INR | Yes — balance is in INR | None — stays in foreign currency |
| Joint holding | With NRI; with resident close relative (former-or-survivor) | With NRI or resident Indian (former-or-survivor) | Same as NRE |
| Best for | Parking foreign savings, earning tax-free Indian FD rates | Collecting Indian income, paying Indian bills/EMIs | Locking savings without rupee risk |
| Typical FD rates (indicative) | Same as domestic FD rates (up to ~7.5–9% at some banks) | Same as domestic FD rates | Linked to global benchmarks — USD deposits typically ~4–5.5% |
Rates are indicative for July 2026 and vary by bank, currency and tenure — check our NRI FD rates comparison for current numbers.
The single biggest financial difference is tax on interest. NRE and FCNR interest is exempt in India. NRO interest is taxed at 30% TDS (plus surcharge and cess) — deducted before you even see it.
Two ways NRIs legally reduce the NRO tax hit: first, DTAA relief — if your country of residence has a Double Taxation Avoidance Agreement with India (UAE, USA, UK, Singapore and 90+ others do), you can get TDS reduced (often to 10–15%) by submitting a Tax Residency Certificate and Form 10F to your bank each financial year. Second, if your total Indian income is below the taxable threshold, you can file an ITR and claim a refund of excess TDS.
Also note: NRE/FCNR interest, while tax-free in India, may be taxable in your resident country (the US taxes worldwide income, for example). The India-side exemption is not a global exemption.
All major Indian banks (SBI, HDFC, ICICI, Axis, Kotak) and several foreign banks let you open NRI accounts fully online from abroad. Standard requirements: passport, visa/work permit or residence proof, overseas address proof, PAN card (or Form 60), passport-size photos, and an initial remittance. Most banks now do video-KYC for NRIs, so no India visit is needed.
Practical tip: open NRE and NRO at the same bank — transfers between your own accounts become instant, and you manage both from one app. Compare NRE FD rates before choosing the bank, since rates differ by over 1% across banks for identical tenures.