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Question - 24: What are differences between NRO, NRE and FCNR?

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Category: NRI Questions and Answers

A Comparison Between NRO, NRE and FCNR Account.

SL Description NRE A/C NRO A/C FCNR A/C
1 When to Open After becoming NRI After Becoming NRI or just before it After becoming NRI
2 Joint Account with NRI Possible? Yes Yes Yes
3 Joint Account with Resident Indian Possible? Yes (with close relatives only) Yes Yes (with close relatives only)
4 Currency in Savings A/c INR INR USD, Euro, Pound etc
5 Current Account & Savings A/c Yes Yes No
6 Fixed Deposit Possible? Yes Yes Yes
7 Purpose NRI can keep their savings they managed in a foreign country (in USD etc) in NRE a/c in INR NRI can keep their income generated in India (like dividend, rental income, gift etc) NRI can use FCNR to keep fixed deposits (in foreign currency) for max period of 5 years
8 Income generated in India can be kept? No Yes No
9 Repatriation Yes No. Only interest income generated from deposits can be repatriated Yes
10 Funds Transfer to any normal Indian Bank Account Yes Yes No
11 Funds Transfer to NRO a/c Yes Yes No
12 Funds Transfer to NRE a/c Yes Yes Yes
13 Funds Transfer to FCNR a/c Yes Yes Yes
14 Income Tax on Interest Generated on Deposits? No Yes No
15 What happens when NRI comes back and settles down permanently in India? Account gets converted to resident account Account gets converted to resident account Account gets converted to resident account
16 Interest Earned for 5Year Fixed Deposit in USD NA NA 2.88%
17 Interest Earned for 5Year Fixed Deposit in Pound NA NA 2.68%
18 Interest Earned for 5Year Fixed Deposit (in INR) 8.50% 8.50% NA
19 Interest Earned on Savings A/c (in INR) 4.00% 4.00% NA
20 Interest Rate Charged on Loan against deposit in NRO/NRE A/c 0.50% over the rate paid on the relative Time Deposits offered as security. 0.50% over the rate paid on the relative Time Deposits offered as security. 2.25 % over prevalent Bank’s Base Rate* (12.25% p.a. currently)