Banking Accounts for Non-Resident Indians and Their Benefits

An NRI account is an account opened with a bank or financial institution by a Non-Resident Indian (NRI). The account can be opened by a person of Indian origin for their investment and banking needs in India. The NRE account interest rate varies for different banks authorized by the Reserve Bank of India. The bank provides a variety of services for such accounts that include currency exchange, tax benefits, fixed deposits, and other services. The amount deposited in such an account can be earned from India or the country they are residing in.

Eligibility Criteria

The eligibility criteria for opening such an account include conditions such as:

  • People on deputation by the Government of India or any PSU
  • Indian citizens living abroad for employment, business, or education purpose
  • People who held an Indian Passport
  • People whose grandparents/parents were Indian citizens according to the Indian Citizen Act, 1955
  • OCIs, NRIs, PIOs, and their spouses
  • Seafarers with Indian nationality/origin working for overseas shipping companies

Types of NRI Accounts

1. NRE Account

The non-resident external (NRE) account is used for transferring money earned in a foreign country to India. The funds in this account are managed in Indian rupees and the interest earned on funds is tax-free in India.

2. NRO Account

A non-resident ordinary (NRO) account is used for earnings from India and there is no barrier to conversion of currency. Deposits in such an account are maintained in Indian rupees but the interest earned is not tax-free.


3. FNCR Account

Foreign currency non-residential (FNCR) account allows NRIs to deposit amounts in foreign currency that is directed by RBI. This account helps them protect their funds from exchange rate risk and the interest earned is tax-free.

These accounts help NRIs manage their funds effectively and also earn attractive interest on their savings.