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 is 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 the 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 that will be levied on yourself or your wife by just transferring funds around.

Similarly, you can transfer money from the 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 allow 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, a 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 the NRE account and opening the FCNR account.


You can also transfer funds from an NRE account to the Resident saving account e.g. normal bank account with any public or private sector bank like 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 a gift which is not taxed in India. 

For example, you can transfer the Indian rupee to your parents directly from your NRE account without worrying about taxation.

Though, if they create fixed deposits 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. 

can you transfer fund from NRE to NRO and Resident account



The long-term capital gain, which you gain after holding a security for a minimum of 3 years is tax-free in India.


In short, Yes, you can transfer funds from your NRE account to your own or someone else's NRE account or NRO account, but you can only create an 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 an 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 funds from NRE to the FCNR account? (answer)

24 comments:

  1. Hi Everyone,

    I am in USA for few years and i use NRE Saving account in india to save extra money that i earned abroad. I decided to get a property with that money and paid 50% to the third party property owner. The sale did not went through so i paid the refund to my NRO saving account in india. I need to move this to my NRE account. Bank is not allowing this. How can i claim this as tax paid money. How to move this to my NRE account ? Since this is a foreign tax paid i cannot submit Form 15 CA and CB as well. kind of bad situation .. please advise.

    ReplyDelete
    Replies
    1. Hello Sundar,

      You can transfer funds from NRO account to NRE account for sure, upto 1 million USD in a year but yes you need to take permissions from bank authority and they will ask for tax payment.

      Now, its difficult to prove that this money in your NRO account is not income, hence I suggest you to take help of some CA or tax consultants and get those documents sorted.

      If tax is not too much and cheaper than hiring those consultant then pay that and move the money to NRE account.

      I know this is not the pleasant situation and both solution is cumbersome but don't know any other way ..

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  2. Can I transfer funds from an NRO account to my Mother's resident savings ac ? or do I need to have an NRE ac to do that. Pls advise.

    ReplyDelete
    Replies
    1. NRO account to my Mother's resident savings ac-- yes

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  3. My NRE account in Bank of Baroda and my wife NRE account in Bank of India can i online transfer my wife NRE account to my NRE account is it possible
    Regards
    Laxman

    ReplyDelete
    Replies
    1. Hello Laxman, yes, it's possible because source of funds are still overseas.

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  4. Hello, I have a NRE account in Axis Bank. Will I be able to transfer money from NRE account to Loan account? Both the accounts are in the same bank.

    ReplyDelete
    Replies
    1. Yes, you can. I am following this practice since 2.5 years. Also I have NRE account and loan account in two different banks and it still works.

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  5. I want to transfer fund from NRE to overseas bank AUD.

    Do I need compulsory visit branch, or done by online??

    ReplyDelete
    Replies
    1. Can be done online, that's the benefit of NRE account.

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  6. Hi Javin, I have an NRE account with SBI. I would like to transfer this fund to my new NRE account with HDFC. However, the HDFC representative conveyed that it is not possible. Is there any RBI guideline which I can quot. Please advise. Regards. Nil

    ReplyDelete
    Replies
    1. NRE to NRE transfer is always allowed and I have done it multiple times, not sure what's going on with HDFC guy, but you can definitely do it. regarding regulation, I don't know top of my head but you can Google it, should be under NRE rules and Regulations.

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    2. Thank you Javin. I drill down the HDFC NRI/NRE pages. The websites confirms the NRE to NRE transfer within India is possible. It seems the HDFC staff at the entry level does not well aware of the NRI/NRE/NRO related queries. Regards.

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  7. Hi Javin, thanks for the detailed and informative article. I have a question that I have not been able to find an answer for anywhere. Who can deposit USD (that will convert to INR) into my NRE account? Only me? My American friend? My British client? Best Regards, Amit

    ReplyDelete
    Replies
    1. Hello Amit, anyone can send money to your NRE account, provided they remit foreign currency. Similarly, anyone can send INR to your NRE account provided they are sending it from their NRE account.

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  8. Can we hold one nre and one resident ac simultaneously...in same bank

    ReplyDelete
    Replies
    1. No, your bank will ask you to convert your resident account to NRO account

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  9. Currently i am in canada , Can i take freelance work money directly to my nre account .

    ReplyDelete
    Replies
    1. Yes, you can deposit your money there if its remitted from US. if its from Paypal then cannot because Paypal use local banking channel which cannot deposit into NRE account. ASk your client to wire transfer to your NRE account.

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  10. Hi Javin , i recently transferred money from my NRE account to my friend's father who live in India. Do i need to take care any tax related stuff at my end?

    ReplyDelete
    Replies
    1. Hello Ayush, nothing to worry for you. your friends father may have to prove that as a gift or not income, especially if the amount is big. If its considered income for him then he need to pay tax.

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  11. I have 2 NRE accounts one in HDFC bank and one in Canara bank.
    1) Is it possible to transfer money from my HDFC NRE account to Canara Bank NRE account without any issues? Hope no tax issues involved.
    2) If I use the NRE account money for some investment purpose in India and if deal didn't go through fine, can I get the refund back in my NRE account? Or the refund will only be sent to my NRO account?

    ReplyDelete
  12. Hi Javin,

    Currently i am having NRE account with ICICI and i would like to Transfer 99 lakhs to my Friend who has basic savings account with ICICI too in India. Is my Friend need to pay tax for that Amount he received ?

    ReplyDelete
  13. Hi Javin,
    I have two NRE accounts in two different banks. Can I transfer an fcnr from one bank NRE account to another bank NRE account ?

    ReplyDelete