Sunday, January 27, 2019

Can you deposit Indian Rupees or Foreign Currency into NRE Saving Account via Cheque or Remittance?

One of the common questions among new NRIs or Indians just went abroad is whether they can deposit rupees in NRO account or not? The short answer to this question is YES, you can deposit INR or Indian rupees into NRO account. In fact, that's the sole purpose of opening an NRO account because you cannot deposit rupees into NRE account.  If you are new to NRI banking facilities available to Non-resident Indians then let me tell you there are two main types of saving accounts NRIs can open in India, NRE (Non-Resident External) and NRO (Non-resident Ordinary).

As the name suggests, the source of fund for NRE account must be external e.g. remittance or transferring funds from another NRE account but NRO account allows you to deposit your income earned in Indian rupees.

For example, if you have properties in India and you are earning rental income from them then you can deposit those rents into NRO saving account. Similarly, if you have some investment in stock market and you are earning dividend then you can deposit those into NRO account.

They are also flexible in terms of accepting money from any other saving account. For example, your parents, spouse or friends can transfer Indian rupees into your NRO account but that's not possible with NRE account.

The NRE account must be funded from external income e.g. you can remit money online to your NRE saving account using online money transfer services like Money2India, Remit2India or Click2Remit. You can also use third-party remittance providers like TranserWise and Xoom if you are sending money from the USA.
Can You Deposit Money in Rupees in NRO Account?

You can even deposit funds into your NRE account using traveler's cheque if you are visiting India. The sole point is that the source of money must be overseas.

That's important because NRE accounts come with unlimited repatriation benefits, which means you can transfer whatever money you have in your NRE account, including both principal and any interest earned on NRE saving account or fixed deposit to abroad without any paper-work.

While if you want to do so from NRO account, you have a cap 1 million USD per year and you also need to do paperwork e.g. pay taxes and provide documentation to your bank before initiating the fund transfer.

That's all about whether you can deposit Indian rupees into your NRO saving account or not. Yes, that's possible and that's the main reason NRIs open NRO account. It's better to have both NRE and NRO account to cater different need as NRE account deposit rules are strict and they don't allow you to deposit Indian rupees unless it's coming from another NRE account.

Other Articles about NRE account you may find useful:
How to reduce the tax on NRO fixed deposit using DTAA?
How to open NRE account online from abroad?
What is the difference between NRE and NRI bank account?
How to send money to Overseas from NRE bank account?
10 ways to fund your NRI banking account?
10 benefits of NRE bank account and fixed deposits
Can you deposit INR on NRE bank account?
Is it mandatory to declare your foreign bank assets while filing income tax returns in India

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