What are NRO, NRE & FCNR Accounts | Types of NRI Accounts
NRO , NRE & FCNR Accounts are different types of accounts created for an NRI ( Non resident indian )
NRO - Non Resident Ordinary Rupee Account :
By converting personal savings / current account .
Primarily used to park india based earnings in rupees in india .
Money is stored in the form of indian rupees .
Tax deducted at source ( TDS ) of 30.9%
Other features :
Multi-City Cheque book (MCC)
Domestic Debit Card
Internet banking
NRI Family Card
To park India based current income in Rupees in India
Account can be opened either individually or jointly with other NRIs / PIOs / OCIs
Account types permissible :
Savings Bank
Current Account
Term Deposit
Special Term Deposit
Recurring Deposit
Funds deposited in the account will be in the form of transfers from NRE / NRO / FCNR (B) accounts or fresh remittances from overseas
Account can be opened with resident Indians on a "former or survivor" basis
Account can be withdrawn for making local payments in Rupees
Interest income is subject to deduction of tax at source @ 30.90%. In case, the depositor is a resident of any of those countries with whom India has a DTAA, the tax will be deducted as per DTAA (Double Taxation Avoidance Agreement) agreed between India and the respective country
Rupee loan available against NRO Deposits :
Tenor Of Deposits For TDR: 7 days to 10 years
Tenor Of Deposits For STDR: 6 months to 10 years
Tenor Of Deposits For RD: 12 months to 10 years
Repatriation is restricted with a limit of 1 million USD per year .
NRE - Non resident external rupee account :
Money is stored in the form of indian rupees
Primarily used to park your overseas earnings remitted to india converted to INR
No restrictions on repatriation
Currency exchange losses in case the money is taken back to a foreign country for use .
Tax deducted at source ( TDS ) is not levied
Other features :
Multi-City Cheque book (MCC)
International or Domestic Debit Card
Internet banking
NRI Family Card
To park your overseas earnings remitted to India and converted to Indian Rupees
Account can be opened either individually or jointly with other NRIs / PIOs / OCIs
Account types permissible :
Savings Bank
Current Account
Term Deposit
Special Term Deposit
Recurring Deposit
Funds deposited in the account will be in the form of fresh remittances from overseas or transfers from other NRE / NRO / FCNR (B) accounts
Account can be opened with close resident relatives on a "former or survivor" basis
Account can be withdrawn for making local payments in Rupees
Interest earned on NRE accounts is exempt from Indian Income tax
Rupee loan available against NRE Deposits :
Tenor Of Deposits (TDR/STDR/RD) Minimum period of 1 year
Tenor Of Deposits (TDR/STDR/RD) Maximum period of 10 years
Interest income is exempted from Indian income tax
FCNR - Foreign currency non repatriable account :
This account is commonly known as FCNR ( B ) Account
Money is stored in the form of foreign currency
Primarily used to park your overseas earnings in foreign currency in order to be used overseas itself .
It's a term deposit account ( You should invest some fixed amount for the term 1 to 5 years . But in the end , you will get an interest for your lump sum . )
Other features :
Tenor of Deposits (TDR / STDR)
Minimum period of 1 year
Maximum period of 5 years
Tax Implications : Interest income is exempted from Indian income tax. However, on relocation back to India, tax is payable subject to a person’s tax status.
Deposit is denominated in foreign currency and can be opened in USD, GBP, EURO, CAD, JPY, or AUD
Deposit can be opened either individually or jointly with other NRIs / PIOs / OCIs
Both principal and interest are payable in foreign currency. Hence, there is no exchange loss on principal and interest
Account types permissible :
Term Deposit
Special Term Deposit
Funds deposited in the account can be by way of fresh remittance from overseas or transfer from other NRE / FCNR (B) account or NRO account (subject to limit)
Interest earned on FCNR (B) deposits is exempted from Indian Income tax
Foreign currency loans and Rupee loans available against FCNR (B) deposits
Account can be opened with close resident relatives on a "former or survivor" basis
Premature Withdrawals :
No interest is payable if the deposit is withdrawn before one year
If the deposit is withdrawn after the completion of one year, interest will be paid at the rate available on the date of deposit for the period deposit has remained with the Bank.
e.g. if a deposit is made for 3 years and is prematurely withdrawn after 2 years, the rate applicable for the 2 to 3 years tenure at the time of making the deposit shall be applied without levying any penalty.
FCNR (B) Premium :
FCNR (B) deposit tenor: 1 year and up to 5 years
Forward contract tenor: 1 year and up to 5 years
Minimum deposit :
USD 10,000 or equivalent
FCNR(B) deposit will be placed in USD only
Forward contract can be booked for final return in INR, GBP, EURO, CAD, AUD or JPY
No charges for booking a forward contract.
In case of cancellation of Forwarding Contract by the depositor, cancellation charges and exchange loss if any, have to be borne by the depositor at the prevailing rate.
If FCNR (B) deposit is closed before maturity, no penalty will be levied for premature withdrawal and the applicable rate of interest will be as per terms and conditions governing FCNR (B) deposits.
RFC - Resident Foreign Currency :
An RFC (Resident Foreign Currency) Savings Account is a saving account maintained in foreign currencies - USD and GBP - for NRIs who have returned to India and hold funds in foreign currency.
Safe parking for foreign currency funds on returning to India.
Open an account in USD or GBP
Balance including interest is fully repairability.
Can transfer the funds back to NRE account on re-gaining NRI status.
Tenor of Deposits (TDR / STDR)
Minimum period of 1 year
Maximum period of 3 years
Premature Withdrawals :
No interest is payable if the deposit is withdrawn before one year
If the deposit is withdrawn after the completion of one year, the interest paid shall be 1.00% below the rate applicable for the period deposit has remained with the Bank or 1.00% below the contracted rate, whichever is lower
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