Friday, December 11, 2015

Can you deposit Indian rupees to NRE account?

No, you cannot deposit Indian rupees into NRE account. The only way to fund an NRE account is via foreign currency remittance, foreign currency deposit when you visit India or via foreign currency traveler's cheque. Since NRE saving account is at par to FCNR deposit, this is the restriction they have imposed.

This also means that you cannot ask your friends, relatives and parents to transfer money to your NRE account. I think the only way to transfer Indian rupees into an NRE account is by transferring money from your NRO account. Since NRO also allow you transfer your Indian rupee income to remit abroad, or to FCNR and NRE, this is the only way I can think it's possible, subject to paperwork and limit of 1M USD per calendar year. See this guide learns how to deposit money in NRE account.

On the related note, if you are in need of a bank saving account where any resident Indian can transfer Indian rupees than go for NRO account. NRO stands for Non Resident Ordinary account, which means anyone can transfer Indian rupees into this account. Many Indians which has properties in India, use NRO account to collect rents from tenant via online rupee transfer.

You can also use NRO account to collect dividends paid by your Stock investments. If you are not really sure about the difference between NRE and NRO account then you must check the article because they are for the different purpose.

In short, You cannot deposit Indian rupees into NRE account. You can only deposit foreign currency cheques and remittance into NRE account. This is actually one of the main difference between an NRE and NRO account. If you need a bank account where you can deposit Indian rupees, just open an NRO account, which is similar to a resident saving account. In fact, if you already had a saving account before then just inform your bank about your non-resident status and they will happily convert your resident saving account to NRO account.

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