One of the common questions among new NRIs or Indians who just went abroad is whether they can deposit rupees in an NRO account or not? The short answer to this question is YES, you can deposit INR or Indian rupees into an NRO account. In fact, that's the sole purpose of opening an NRO account because you cannot deposit rupees into an 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 funds for the NRE account must be external e.g. remittance or transferring funds from another NRE account but the 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 an NRO saving account. Similarly, if you have some investment in the stock market and you are earning dividends then you can deposit those into an NRO account.
They are also flexible in terms of accepting money from any other savings account. For example, your parents, spouse, or friends can transfer Indian rupees into your NRO account but that's not possible with an 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.
You can even deposit funds into your NRE account using a traveler's cheque if you are visiting India. The sole point is that the source of money must be overseas.
As the name suggests, the source of funds for the NRE account must be external e.g. remittance or transferring funds from another NRE account but the 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 an NRO saving account. Similarly, if you have some investment in the stock market and you are earning dividends then you can deposit those into an NRO account.
They are also flexible in terms of accepting money from any other savings account. For example, your parents, spouse, or friends can transfer Indian rupees into your NRO account but that's not possible with an 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.
You can even deposit funds into your NRE account using a 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 abroad without any paperwork.
While if you want to do so from an NRO account, you have a cap of 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.
While if you want to do so from an NRO account, you have a cap of 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 accounts. It's better to have both NRE and NRO account to cater to 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 accounts you may find useful:
- How to reduce the tax on NRO fixed deposit using DTAA?
- How to open an NRE account online from abroad?
- What is the difference between NRE and NRI bank accounts?
- 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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