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NRE, NRO or FCNR: which account should this money go into?
Where the money comes from decides the account; what you want to do with it decides the currency. Four choices, and the answer updates as you go.
NRE. The account for money earned abroad that you want in rupees.
An NRE account holds your foreign earnings in rupees. Interest is exempt in India while you are non-resident under FEMA, and both principal and interest can be sent back abroad without limit.
Open this
NRE (Non-Resident External)
Rupee account for money earned abroad. Interest exempt in India while you are non-resident; principal and interest freely repatriable.
Tax: NRE interest is exempt under Section 10(4)(ii) only while you are non-resident under FEMA. Your country of residence may tax the same interest as worldwide income.
- 1.Open an NRE savings or fixed deposit with your bank's NRI desk.
- 2.Credit only foreign earnings and after-tax current income; capital receipts in India go to NRO.
- 3.If you return to stay, redesignate the account or move the balance to RFC that day.
What to do with this number
The three accounts side by side
Who can hold each, what can be credited, how repatriation works, and what changes when you return.
What NRO interest really costs after tax
The bank's deduction against your treaty rate, on one deposit, for one year.
Still using your old resident account?
It has to be redesignated to NRO; leaving it as it is breaks FEMA and freezes on the next KYC.
How this is worked out
- Credits: foreign earnings to NRE or FCNR (B); money arising in India to NRO. FEMA 5(R) lets current income (rent, dividends, pension, interest) move to NRE once tax on it is paid; sale proceeds and other capital receipts stay in NRO.
- Tax: NRE interest exempt while non-resident under FEMA (Section 10(4)(ii)); FCNR (B) and RFC interest exempt while non-resident or RNOR (Section 10(15)(iv)(fa)); NRO interest taxable, 30% deducted unless the treaty rate is on file.
- Repatriation: NRE and FCNR (B) freely; NRO up to USD 1 million a financial year with Form 145 (formerly 15CA) and, above ₹5 lakh of taxable remittance, a CA certificate on Form 146 (formerly 15CB).
- The India-UAE treaty rate on interest applies to NRO interest once your TRC and Form 41 (formerly Form 10F) are with the bank.
Checked against the Income-tax Act and Rules on 10 September 2026. An estimate, not advice: your return decides.
Want a CA to open the right NRI account for you?
We coordinate with your bank's NRI desk and file Form 10F / Form 41 + TRC so day-one TDS is at the treaty rate.
Senior CA who specialises in NRI tax · we deal with the tax officer, you don't
What usually comes next
Picked your account? Here's the next decision.
One NRI tax problem usually opens a door to the next. Here's the most likely next step from where you are right now.