NRE, NRO & FCNR — which account for what?
The three account types that every NRI needs to know — with a decision matrix.
NRE Account
Non-Resident External account. Denominated in INR. Funded by remittances from abroad. Fully repatriable (both principal and interest). Interest is tax-free in India. Best for saving overseas income in India and for making property purchases where you want easy repatriation later.
NRO Account
Non-Resident Ordinary account. Denominated in INR. Used for managing income earned within India (rent, dividends, pension). Interest is taxable at slab rates. Repatriation capped at USD 1 million per financial year. Best for receiving rental income from your Kochi apartment.
FCNR Account
Foreign Currency Non-Resident account. Denominated in USD/GBP/EUR/CAD/AUD/JPY. Fixed deposit only. Fully repatriable, interest tax-free in India. Best for parking foreign currency without INR conversion risk — you earn interest in the foreign currency itself.
Decision Matrix
Property purchase: NRE (recommended) or FCNR. Rent receipt: NRO. Loan EMI payment: NRE or NRO. Repatriation of sale proceeds: NRE (easiest) or NRO (with tax certificates).
Practical Tips
Open NRE + NRO with the same bank — makes internal transfers easy. Prefer HDFC, ICICI, SBI, Axis, Kotak — all have strong online banking and NRI desks. Get IPIN / net-banking activated before you leave India, if possible.