NRE Savings Bank Account:
- NRE accounts are meant for Non-Resident Indians (NRIs) to park and manage their foreign income in India.
- The account is maintained in Indian Rupees (INR), and the funds can be freely repatriated back in foreign currency.
- Deposits made in NRE accounts are tax-free in India, which means interest earned and the principal amount are exempt from income tax.
- The account can be held jointly with another NRI.
- The interest rates on NRE accounts are determined by individual banks and are typically higher than domestic savings accounts.
- The account can be opened as a savings account or as a term deposit with a fixed maturity period.
NRI Savings Bank Account:
- NRI accounts are designed for Non-Resident Indians who wish to maintain Indian Rupee (INR) transactions and funds in India.
- NRI accounts can be opened by individuals who hold an Indian passport or are of Indian origin.
- These accounts can be opened as savings accounts or current accounts, depending on the banking requirements.
- Funds in NRI accounts are not freely repatriable, meaning there are restrictions on transferring the money back to a foreign account.
- The interest earned on NRI accounts is subject to income tax in India, and TDS (Tax Deducted at Source) may be applicable.
- NRI accounts can be held jointly with another NRI or with a resident Indian, subject to specific conditions and regulations.
FCNR Savings Bank Account:
- FCNR accounts are for NRIs and Persons of Indian Origin (PIOs) to hold their foreign earnings in foreign currencies, such as US Dollars, Euros, etc.
- The account is maintained in a specified foreign currency, and both the principal and interest can be repatriated in the same currency.
- The interest rates on FCNR accounts are fixed and determined by market conditions and the chosen currency.
- FCNR accounts can be opened for fixed deposit terms ranging from 1 to 5 years.
- The interest earned on FCNR accounts is exempt from Indian income tax.
- The funds in FCNR accounts are not subject to any exchange rate fluctuations as they are maintained in foreign currency.
