Non Resident Accounts
Updated on July 18, 2023
Non-Resident Accounts, often abbreviated as NRI accounts, are bank accounts specifically designed for individuals who reside outside their home country but have financial interests or connections within that country. These accounts facilitate the management and movement of funds for non-residents, providing them with a range of banking services.
What are the types of non-resident accounts?
NRI accounts come in different types, including Non-Resident External (NRE) accounts, Non-Resident Ordinary (NRO) accounts, and Foreign Currency Non-Resident (FCNR) accounts. Each account type serves specific purposes and has different features.
NRE accounts are denominated in Indian rupees and allow non-residents to hold and manage their foreign income, such as income from abroad or funds remitted from overseas. The principal and interest earned in NRE accounts are freely repatriable, meaning they can be transferred back to the foreign country without any restrictions.
NRO accounts, on the other hand, are used to manage income earned within India, such as rental income, dividends, or pensions. These accounts can hold both Indian rupees and foreign currency, but the repatriation of funds is subject to certain regulations imposed by the Reserve Bank of India (RBI).
FCNR accounts are deposit accounts maintained in foreign currencies, usually in major international currencies like the US dollar, Euro, or British pound. These accounts allow non-residents to hold their funds in a foreign currency and earn interest on their deposits. The principal and interest earned in FCNR accounts are fully repatriable.