NRI bank accounts in India — NRE, NRO and FCNR explained

Who can open NRI bank accounts

Any of the following can open NRI accounts in India without prior RBI approval:

Non-Resident Indians (NRIs) — Indian citizens who are residing abroad for employment, business, or any other purpose indicating an uncertain duration of stay.
OCI cardholders — foreign citizens who hold an Overseas Citizen of India card. (The old "PIO card" has been merged into OCI since 2015; any existing PIO card is still valid and treated on par with OCI for banking purposes.)
Students going abroad for studies — treated as NRIs under FEMA from the day they leave.
Merchant navy personnel posted on foreign-flag ships.
Those deputed abroad by the Government or PSUs for long assignments.

The three main NRI account types

Account	Currency	Funded from	Interest taxable in India?	Repatriable?
NRE (Non-Resident External)	Rupees	Foreign remittances only	No	Yes, freely
NRO (Non-Resident Ordinary)	Rupees	Indian-source income and foreign remittances	Yes (TDS applies)	Yes, up to USD 1 million per financial year
FCNR(B) (Foreign Currency Non-Resident Bank)	Foreign currency (USD, GBP, EUR, JPY, CAD, AUD, and others)	Foreign remittances only	No	Yes, freely

NRE and NRO come in savings, current, fixed-deposit, and recurring-deposit variants. FCNR(B) is term deposit only — tenor between 1 and 5 years. (The old FCNR(A) scheme was discontinued decades ago.)

NRE — Non-Resident External account

The workhorse account for money earned abroad.

Deposits must come from foreign sources — inward remittances in foreign currency, transfers from another NRE/FCNR account, proceeds of foreign-currency instruments. The bank converts inflows into rupees at receipt and holds the balance in INR.
Withdrawals for sending money abroad are converted from rupees back to foreign currency at the prevailing rate.
Interest is tax-exempt in India under Section 10(4)(ii) of the Income-tax Act for as long as you are a person resident outside India under FEMA. (See our return-to-India article for what changes on permanent return.)
Interest rates on NRE FDs are set by banks, subject to RBI ceilings linked to the LIBOR/SOFR plus spread — competitive with resident rupee FDs but with the tax and repatriation advantage.
Exchange-rate risk sits entirely with the depositor — the balance is in rupees, so depreciation of the rupee against your home currency between deposit and withdrawal is your loss.
Fully and freely repatriable — both principal and interest, at any time.
Joint holding allowed with other NRIs. Can also be held jointly with a resident relative (as defined in the Companies Act) on a "Former or Survivor" basis — the NRI is the sole operator during their lifetime; the resident relative can only operate after the NRI's death.
Useful for: parking foreign-earned money in rupees, earning FD rates higher than home-country savings rates, funding Indian expenses, remitting back abroad when needed.

NRO — Non-Resident Ordinary account

The account for Indian-source income of an NRI — rent from an Indian property, dividends from Indian shares, interest from existing Indian deposits, Indian pension, royalties.

Deposits can come from both Indian-source income and foreign remittances.
Interest is fully taxable in India. Banks deduct TDS at 30% plus surcharge and cess (typically around 31.2% effective) on NRO interest, regardless of the slab the depositor would otherwise be in.
DTAA relief — most treaties India has signed reduce the effective rate on interest to between 10% and 15%. To claim the lower rate, submit annually:
- Tax Residency Certificate (TRC) from your country of residence.
- Form 10F (self-declaration of treaty residency details).
- PAN and a self-declaration of beneficial ownership.
Joint holding permitted with both other NRIs and resident Indians on any operating mode (Either or Survivor, Former or Survivor, etc.).
Exchange-rate risk is the depositor's, same as NRE.

Repatriation from NRO — the USD 1 million rule

Outward repatriation from an NRO account is capped at the equivalent of USD 1 million per financial year, after Indian taxes have been paid. The old rule that property-sale proceeds needed the property to have been held for 10 years has been withdrawn — all NRO balances, including sale proceeds of property and inherited assets, now fall under the single USD 1 million annual window.

To effect a repatriation, the bank needs:

Form 15CA (self-declaration of the nature of the remittance and tax paid), filed online on the income-tax portal.
Form 15CB (Chartered Accountant's certificate) where the remittance is taxable and above the threshold amounts — effectively required for most meaningful sums.
Supporting documents — e.g. sale deed for property proceeds, inheritance documents, rent receipts with TDS details.

Plan repatriations with the April–March financial year in mind, not a calendar year. Tax and CA paperwork can take a few weeks; don't leave it to the end of March.

Special note on property sale proceeds

For balances arising from sale of immovable property in India, the combined effect of the current rules is:

Residential/commercial property sold after being held more than the applicable holding period (24 months for long-term capital gains).
Sale proceeds deposited into NRO.
TDS on the sale deducted by the buyer under Section 195 — usually at ~20% plus cess on long-term gains, ~30% on short-term. Apply for a lower-deduction certificate under Section 197 before sale to avoid over-deduction.
Net proceeds (after capital-gains tax settlement) repatriable within the USD 1 million per-FY envelope.

Agricultural land, plantation property, and farmhouses sold by NRIs remain outside normal repatriation — special RBI permission is required.

FCNR(B) — foreign currency term deposits

FCNR(B) is the best of both worlds for NRIs who want to earn something on their savings without the rupee-dollar exchange-rate risk.

Held in the foreign currency itself — no conversion at deposit or on maturity (unless you choose to).
Term: 1 to 5 years. No savings or current variant — FCNR is strictly a term deposit.
Interest tax-exempt in India for non-residents and also for RNORs, under Section 10(15)(iv)(fa).
Currencies: most banks offer USD, GBP, EUR, JPY, CAD, AUD; some offer CHF, SGD, HKD, NZD. Pick the currency your future liability is in.
Interest rates are set by each bank within RBI-linked ceilings (benchmark plus a spread). Rates differ by currency and tenor.
Fully repatriable — principal and interest can be sent back abroad without limit.
Exchange-rate risk is nil during the deposit term — unlike NRE, there is no INR conversion.
Joint holding with other NRIs allowed; Former-or-Survivor with a resident relative is also permitted.

FCNR(B) deposits are particularly attractive when domestic home-country deposit rates are low and rupee volatility makes NRE unappealing.

How to choose between the three

Think of it by source of money and currency view:

Income earned abroad, happy to take rupee exposure: NRE.
Income earned abroad, want to keep foreign currency intact: FCNR(B).
Income earned in India (rent, dividend, Indian pension): NRO. There is no choice here — this has to go into NRO.

Most NRIs end up with at least one of each at their main Indian bank.

Joint holding and Power of Attorney

NRE and FCNR joint holding: multiple NRIs on any operating mode; with a resident relative only on Former or Survivor basis (NRI operates, relative inherits on death).
NRO joint holding: either with other NRIs or resident Indians, on any operating mode. This is why NRO is the usual choice for shared household accounts where a parent or spouse in India needs to operate funds.
Power of Attorney can be granted to a resident (typically a relative) to operate NRI accounts for specific purposes — paying bills, making local investments, operating an NRO for tenancy. Repatriation out of India is generally not a permitted POA activity.

Documentation to open an NRI account

Valid passport and visa / residence permit / work permit.
OCI card if a foreign citizen.
Overseas address proof (utility bill, tenancy agreement, driving licence).
PAN card — mandatory for NRO; strongly recommended for NRE and FCNR.
A passport-size photograph.
Overseas self-attestation of document copies, or attestation by the Indian mission, a notary abroad, or through the bank's own video-KYC process.

Most Indian banks now offer fully online NRI account opening with courier-delivered welcome kits. A physical visit is usually not required.

Taxation summary

Account	Interest taxable in India?	TDS on interest?	Home-country tax?
NRE	No	No	Often yes — US citizens must report globally; UK, Canada, Australia tax worldwide income
NRO	Yes	30% + cess (DTAA reduces)	Usually yes; claim foreign tax credit for Indian TDS
FCNR(B)	No	No	Usually yes; report as foreign bank deposit interest at home

Balance sheet disclosure: if you're a US person, NRE/NRO/FCNR balances cross FBAR and FATCA thresholds quickly — FinCEN 114 (FBAR) if aggregate foreign accounts exceed USD 10,000 any time in the year, Form 8938 (FATCA) at higher thresholds. UK and Canadian residents have their own disclosure regimes. Don't assume "tax-free in India" means "tax-free" at home.

When the NRI returns to India

On permanent return, NRE and NRO savings accounts are redesignated as resident accounts; NRE and NRO fixed deposits can run to maturity; FCNR deposits continue on their existing terms to maturity. See our return-to-India banking article for the detailed sequencing and the RNOR tax window.

Common mistakes

Using NRE for Indian-source income. Rent deposits, Indian pension, or dividends must go to NRO — NRE accepts only genuine foreign inflows, and getting the categorisation wrong creates FEMA exposure.
Forgetting to submit TRC and Form 10F annually for NRO. Without them, the bank deducts the full 30%+ TDS, and refunding the excess requires filing an Indian return.
Joint NRE with a resident on Either-or-Survivor. Not permitted. Only Former-or-Survivor works.
Not filing Form 15CA/15CB for NRO repatriation. The bank will refuse to remit without it.
Ignoring home-country reporting. Tax-free in India is not the same as tax-free globally — FBAR/FATCA/home-country returns must still reflect these balances.

Bottom line

NRE is for foreign-earned money you're happy to hold in rupees; FCNR is for foreign-earned money you want to keep in the source currency; NRO is for anything generated inside India. Each comes with a specific tax treatment and repatriation envelope, and the combination — typically one of each — is what most NRIs end up using. Get the joint-holding and documentation bits right at the outset, and the day-to-day operation is as simple as any domestic bank account.