How to transfer money to NRE/ NRO accounts

Aman Saxena

If you are an NRI, transferring money to a Non-Resident account in India can help you to receive income in India, and to prepare for your future. Here is a quick step-by-step guide on how to transfer money to an NRI account when living overseas.

📝 Table of Contents

Can I transfer money to my NRO/ NRE account?

Yes, you can transfer money to your NRO or NRE account. But for each account, it matters where the funds are coming from. First, let’s take a closer look at what NRE and NRO accounts are:

  • NRE stands for Non-Resident External account
  • NRO stands for Non-Resident Ordinary account

NRE & NRO accounts help Non-Resident Indians manage their income abroad or in India, while they live outside of the country. Both are banking accounts and are under the umbrella term of NRI accounts.

ℹ️ An NRI is an Indian citizen that lives outside of India for more than 182 days a year. An Indian citizen becoming an NRI will need to change their bank accounts to comply with their NRI status.¹

You can only qualify for an NRE or NRO account once you can show evidence of your NRI status to your Indian bank. Most commercial private and public banks in India provide NRI services to open an NRE or NRO account, alongside additional services.

There are differences between an NRE and an NRO account and how they are used. Here is a quick table to understand when and how to use an NRE and NRO account:

NRE AccountNRO Account
Full formNon-Resident ExternalNon-Resident Ordinary
Source of IncomeOutside of IndiaWithin India
TypeSavings or Fixed DepositSavings or Fixed Deposit
CurrencyForeign earnings are converted to Indian RupeesIndian Rupees
Tax BenefitsTax-freeEarned interest is taxable
RepatriablePrincipal and Interest are fully repatriableRepatriable up to $1 million USD annually if all taxes are paid
Joint AccountCan be opened with another NRI or Indian ResidentCan be opened with another NRI or Indian Resident

To give context, here is an example of how each would be used:

  • An NRO account can be used to park income from a rented flat in India
  • An NRE account can be used to park earnings from salary income abroad

NRE and NRO accounts are opened independently and some NRIs may have one or both. Lastly, an NRE account can be converted into an NRO, but not the other way around.²

How to transfer money to an NRE account: Step by step

To transfer money to a Non-Resident External (NRE) account requires the money to come from outside India. The money can come from salary or income earned abroad and transferred from a bank account to India.

The fastest and easiest way to do a transfer is through a transfer that deposits directly to the NRE bank account in India.

You can do it through a wire transfer at your local bank overseas or quickly with a money transfer provider, either in person or online. But again, it must come from a foreign source outside of India. The amount you send to an NRE account will be converted into Indian Rupees where your account is held, at the bank’s prevailing exchange rate.

Here are the steps to transfer money to an NRE account:

  1. Gather the NRE account details
  2. Choose how to make your transfer
  3. Identify how much you want to send
  4. Confirm the bank details and sending amount
  5. Pay for the transaction
  6. Submit the transfer

Each bank or money transfer provider may have its own procedures and requirements, so it is best to check with them first. And to transfer to an account in India, you will first want to make sure you have all the right account details, including your Indian bank’s IFSC code.

ℹ️ NRE accounts can be found to be convenient because there is no minimum or maximum that can be contributed to them and there are significant tax benefits.³

How to transfer money to an NRO account: Step by step

Transferring money to an NRO account will work similarly to transferring money into a domestic Indian account. So if you have a source of income in India, you can provide them with your NRO account details and the money can transfer directly within the country.

  1. Identify the mode of transfer, whether through online banking, in person, or through a money transfer app
  2. Provide your NRO account details including the IFSC code of the bank branch
  3. Decide how much is to be sent
  4. Provide any supporting documentation if required
  5. Confirm your transaction

Money in an NRO account has the ability to be repatriated abroad for up to $1 million USD per financial year for certain purposes.⁴

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Banks can charge a high transaction fee for wire transfers, and then give you an exchange rate that is different from the mid-market exchange rate you see on Google. And in that exchange rate difference, banks can make a profit on every Dollar or Euro you convert. And while it may look small, that difference can really add up.

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Documents for transferring money to NRO/ NRE account

Documents will not be needed to do simple money transfers to an NRO or NRE account. But you may need to provide the reason for the transfer while inputting the details of the transaction, as well as your government-issued ID for identity verification.

You will need to show evidence of tax payment in the case you are looking specifically to transfer money from an NRO to an NRE account.

If you are opening an NRO or NRE account, you will be asked to show the following documents along with an application:

  • Proof of NRI status
  • Proof of tax residency
  • Proof of Identity
  • Current address documentation
  • Permanent address documentation

The documents required can vary from bank to bank, and you may also be asked to show proof of overseas income and a voided cheque.⁵

Tax on money transfer to NRO/ NRE account

It is expected that you would have paid taxes on the earned income outside of India, so the money being transferred to an NRE account is then tax-exempt. This goes for the balance and interest earned on the account.⁶

Income taxes would have to be paid on money going into an NRO account, just like regular income. But a 30% TDS, or tax deducted at source, is deducted on interest earnings in non-NRO savings accounts. If you hold an NRO savings account then the TDS does not apply.⁷

Sources used for this article:

  1. NRI definition
  2. NRE vs NRO accounts
  3. NRE account
  4. NRO account
  5. SBI documents
  6. NRE taxes
  7. NRO taxes

All sources checked as of 15 May, 2022


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