NRI · 5 min read
NRE vs NRO vs FCNR Accounts for NRIs: Differences & Taxability (2026)
By the India Law Simplified editorial team · Verified against primary government sources (bare Acts & official portals) · Last updated 2026-04-21
Indian banks offer three main NRI accounts — NRE, NRO and FCNR. Choosing the right one affects taxes and how freely you can move money. Here's the plain-English difference.
1NRE (Non-Resident External)
For parking your foreign earnings in India in rupees. Interest is exempt from Indian income tax while you're an NRI, and both principal and interest are freely repatriable abroad. Best for money earned overseas that you want to keep accessible and tax-free.
2NRO (Non-Resident Ordinary)
For income arising in India — rent, dividends, pension, or proceeds you receive in India. Interest is taxable in India (TDS applies), and repatriation from an NRO account is allowed up to USD 1 million per financial year (subject to taxes paid and the right forms). Best for managing Indian-source income.
3FCNR (Foreign Currency Non-Resident)
A fixed deposit held in foreign currency (USD, GBP, EUR, etc.), so you avoid rupee exchange risk. Interest is exempt while you're an NRI, and it's freely repatriable. Best for locking foreign savings at a fixed return without currency risk.
Frequently asked questions
Is NRE account interest taxable in India?
No — interest on NRE and FCNR accounts is exempt from Indian income tax while you remain an NRI. NRO interest is taxable.
Can I repatriate money from an NRO account?
Yes, generally up to USD 1 million per financial year (after taxes and the required Form 15CA/15CB where applicable). Verify current limits with your bank.
Is this professional advice?
No. Bank rules and tax treatment vary with your status. Confirm with your bank and a CA before opening or transferring.
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