Difference Between NRE Account and NRO Account
These are the accounts for non resident Indians. An India who is going abroad must know difference about NRE account and NRO account. He can open one of the two bank accounts in India. Knowing the difference between the two is helpful for an NRI. The government of India provide the facility of these two accounts to NRIs so that they may send money to their homes easiliy. Which type of account is better? This is the question before an NRI.
NRE is based on Indian currencey. The funds maintained in this type of account are in Indian rupee. NRE may be operated as current, saving or fixed deposit account. Any NRI can open it. Through this type of bank account funds may be sent to any other country. NRE is opened by single person. But it can also be a joint account. Condition is that both the parterners should be NRIs. An Indian living in India cannot opern this type of account on behalf of an NRI. It has the nomination facility. The account automatically get converted into a normal bank account after an NRI returns to India and start living here permanently.
NRO account is based on rupee. It means that money in this type of account is maintained in rupee. It may be a current or saving account. It may also be a fixed deposit account. Any normal bank account can be converted into an NRO account if a person becomes an NRI. Funds from an NRO accounts cannot be repatriated. Funds of NRO account can only be used within India. A resident Indian and a non resident Indian can open an NRO account jointly. It is not tax free account. It cannot be opened by an Indian on behalf of an NRI. Power of attorney is limited to depositing the money in the account. It cannot be withdrawn by power of attorney.