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Difference between NRE and NRO

Difference between NRE and NRO

When it comes to saving and investing money, there are two types of accounts you can use: the National Savings Certificate (NSC) and the Public Provident Fund (PPF). Both have their pros and cons, but what’s the difference between NRE and NRO savings accounts? Let’s take a look.

What is NRE?

NRE stands for Non-Resident External. NRE accounts are special bank accounts meant for Indian citizens who live outside of India. The main purpose of NRE accounts is to help maintain foreign currency while living abroad. NRE accounts can be used for various purposes such as saving, investing, and remitting funds back to India. NRE accounts are also exempt from income tax and are subject to lower interest rates. Because of these benefits, NRE accounts are a popular choice for Indian citizens living abroad.

What is NRO?

NRO stands for Non-Resident Ordinary. It is a bank account opened in India by a foreign national (person who is not an Indian citizen or resident). NRO account can be in the form of savings, current, recurring or fixed deposit account. An NRO account allows a foreign national to freely invest and save their money in India. NRO account also provides easy repatriation (transfer of funds) of money back to the account holder’s home country. NRO is considered one of the best investment options for foreign nationals as it offers high-interest rates and is exempt from taxes. NRO account can be opened by any person who has a valid passport, visa, and PAN card. NRO account can also be opened by a foreign national who is employed in India or has been posted to India on official assignments. NRO account can be opened jointly with another NRI (Non-Resident Indian). The joint holders of an NRO account have equal rights over the account balance and can operate the account together. NRO accounts are maintained in Indian Rupees (INR). Foreign currency can be deposited into NRO accounts, but it will be converted into INR at the prevailing exchange rate.

Difference between NRE and NRO

NRE & NRO accounts are both types of bank accounts that can be used by people of Indian origin who reside outside of India. NRE stands for Non-Resident External, and NRO stands for Non-Resident Ordinary. Both account types allow the account holder to remit money from abroad to India, and both offer certain tax benefits. However, there are some key differences between NRE & NRO accounts. NRE accounts are solely in Indian Rupees, while NRO accounts can be in either Indian Rupees or a foreign currency. NRE accounts also offer interest that is exempt from income tax, while NRO accounts do not. Finally, NRE accounts can only be opened by individuals who are earning income outside of India, while NRO accounts can be opened by anyone with an Indian passport, regardless of their residence or employment status. As a result, it is important to choose the right type of account based on your individual needs and circumstances.


In order to make an informed decision about which account is best for you, it’s important to understand the difference between NRE and NRO accounts. An NRE account is a special type of savings account that offers tax-free earnings on all deposits, making it ideal for individuals who are not currently working in the United States. An NRO account, on the other hand, is taxed at the source so you will need to pay income tax on any interest earned.

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