Friday, April 7, 2017

Can You transfer money from NRE to another NRE, NRO, FCNR and Resident Saving account? ICICI or HDFC?

One of the most common question among NRIs (Non-resident Indians), especially among IT professionals traveling to the USA, UK, Singapore onsite are whether they can transfer funds from one NRE account to another NRE account, or NRO account, or FCNR account, or a Resident saving account or not? Since many IT professionals have their resident saving account in India when they travel to Overseas and which they later converted to NRO account, this doubt is obvious. Well, since NRE account is maintained in Indian rupees, there is no restriction on transferring your money from one NRE account to another NRE, NRO, FCNR or resident saving account.


This means if you and your wife have two separate NRE accounts, you can easily transfer money from your NRE account to your wife's NRE account. Also, there is no tax will be levied to yourself or your wife by just transferring funds around.

Similarly, you can transfer money from NRE account to NRO accounts to pay bills or open NRO fixed deposit. There is no restriction on how much money you can transfer etc. Similarly, you can also transfer funds to open FCNR fixed deposit from your NRE account, both ICICI and HDFC allows it and I am sure other banks like Kotak, YESBANK and Axis Bank also allows it.

The only thing you need to remember is that given FCNR is a foreign currency deposit, reverse exchange rate is applied to convert your INR to USD or whatever currency you want to open FCNR fixed deposit. In short, if you have USD or EURO already, it's better to use those for opening FCNR FD rather than transferring Indian rupees from NRE account and opening FCNR account.


You can also transfer funds from NRE account to Resident saving account e.g. normal bank account with any public or private sector bank e.g. HDFC, ICICI, and SBI. There is no tax levied on both accounts if you transfer funds to your parents, wife, or children because the amount is considered gift which is not taxed in India. For example, you can transfer Indian rupee to your parents directly from your NRE account without worrying about taxation.

Though, if they create fixed deposit out of that money or invest in the Stock market and then earn interest or make some capital gain, those will be considered their income and they have to pay income tax on the interest rate and capital gain e.g. short-term capital gain. The long-term capital gain, which you gain after holding a security for minimum 3 years is any way tax-free in India.


In short, Yes, you can transfer funds from NRE account to your own or someone else' NRE account or NRO account, but you can only create FCNR deposit from your own account. Fund transfer from NRE to Resident Saving account is also allowed and you can do this from any nationalize banks e.g. ICICI, HDFC, SBI, or Bank of Baroda, all of them have internet banking and you can find this option in their net banking application.

Other articles, you may like to explore:
  • How to open NRE/NRO account from Singapore? (see)
  • The best way to transfer money from Singapore to India? (read)
  • Sending Money to India? Always compare SGD to INR rates between DBS IndiaRemit, MoneyToIndia, Remit2India etc (see)
  • How does NRIs living in Singapore can exchange old Rs 500 and Rs 1000 notes? (article)
  • How to open NRE/NRO saving account online from Overseas? (article)
  • How NRIs can use DTAA to avoid double taxation? (article)
  • Can you transfer fund from NRE to FCNR account? (answer)

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