What is NRO, NRE & FCNR Accounts | Types of NRI Accounts

 



NRO , NRE & FCNR Accounts are different types of accounts which 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 transfer from NRE / NRO / FCNR (B) accounts or fresh remittance from overseas

Account can be opened with resident Indians on "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Account can be withdrawn for making local payments in Rupees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, depositor is 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 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 transfer from other NRE / NRO / FCNR (B) accounts

Account can be opened with close resident relatives on "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 in overseas itself .

Its an term deposit account ( You should invest some fixed amount for the term 1 to 5 years . But at 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 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 loan available against FCNR (B) deposits

Account can be opened with close resident relatives on "former or survivor" basis

Premature Withdrawals :

No interest is payable, if the deposit is withdrawn before one year

If the deposit is withdrawn after 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 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 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 forward contract.

In case of cancellation of Forward Contract by the depositor, cancellation charges and exchange loss if any, has to borne by the depositor at prevailing rate.

If FCNR (B) deposit is closed before maturity, no penalty will be levied for premature withdrawal and 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 savings 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 account in USD or GBP

Balance including interest is fully repatriability.

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 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

Thanks & Regards .