Introduction

Once you become an NRI, your regular resident Indian bank account becomes inactive as per regulations. You’ll need to convert it into an NRI-specific account to continue managing your finances legally and seamlessly.

Beyond just banking NR Accounts becomes your bridge to India.

NR account

An NR account, or Non-Resident account, is a special type of bank account created to help Indians living abroad (called NRIs or Non-Resident Indians) manage their money in India easily. Imagine you’ve moved to another country (say, the US) for work or studies, but you still have ties to India. Maybe you own property here, have family to support, or want to save and invest in India. That’s where an NR account comes in.

Who is eligible for an NR account?

1. NRI (Non Resident Indian)

2. OCI

*The PIO scheme was discontinued in 2015, and PIO cards were merged into the OCI scheme. Today, PIO card holders are treated as OCI card holders.

Non-Resident Indians (NRIs):

• As per section 6 of the Income-tax Act, an individual is said to be non-resident Indian if he is not a resident in India and an individual is deemed to be resident in India in any previous year if he satisfies any of the following conditions:

  • If he/she is in India for a period of 182 days or more during the previous year; or

  • If he/she is in India for a period of 60 days or more during the previous year and 365 days or more during 4 years immediately preceding the previous year.

Overseas Citizens of India (OCIs):

• An OCI is a foreign national of Indian origin who has been granted a special immigration status by the Government of India.

• An OCI card allows a person to live, work, and travel to India indefinitely without needing repeated visas.

• OCI is not dual citizenship.

• OCI card holders get a lifelong visa to India.

• They can work, study, and own property in India (with some restrictions).

• They cannot vote, run for political office, or hold certain government posts.

Types of NR Accounts:

NRE Account (Non-Resident External Account):

NRE is like a foreign INR account.

• Used to park foreign earnings in India.

• Funds are fully repatriable, meaning you can transfer them back to your foreign account without any restrictions.

• Both principal and interest are tax-free in India.

• Can be opened as a savings, current, or fixed deposit account.

NRO Account (Non-Resident Ordinary Account):

• Used to manage income earned in India, such as rent, dividends, or pensions.

• Repatriation of funds is restricted to a maximum limit of USD 1 million per financial year (subject to RBI regulations).

• Interest earned is subject to tax in India.

• Can also be opened as a savings, current, or fixed deposit account.

FCNR Account (Foreign Currency Non-Resident Account):

• Allows NRIs to save their earnings in foreign currencies like USD, GBP, EUR, etc.

• Protects against exchange rate fluctuations.

• Interest earned is tax-free in India.

• Typically opened as a fixed deposit account for a term ranging from 1 to 5 years.

Global Savings Account (GIFT City):

• A multi-currency account offered through Gift City IBU, similar to an international savings account.

• Designed to manage foreign income in currencies like USD, GBP, EUR, and JPY.

• Offers up to 5.6% returns on foreign currencies while being completely tax-exempt in India.

• Both the principal and interest earned are freely repatriable, with no repatriation limits.

• Facilitates foreign currency investments (FCY) with ease.

Check out our blog on GIFT city.

Overview of NR Accounts

Why you need an NR Account:

1. Managing money across borders

2. Repatriation

3. To invest in India

4. Meet financial obligations in India