Yes, Transfer Money form NRO to NRE Saving Account, FCNR is Allowed

Not many NRIs (Non-resident Indians) knows that, from May 2012, NRI can transfer fund from the NRO account to NRE account in India. Earlier this was not the case though you can transfer funds from NRE to an NRO account, the reverse was not allowed. The only way to fund your NRE saving account was through your offshore income earned in foreign currency. Things have changed, The Reserve Bank now allows non-resident Indians (NRIs) to transfer funds from non-resident ordinary (NRO) account to Non-Resident External (NRE) account subject to a ceiling of $1 million in a financial year. This move is encouraging as now NRI can make maximum use of their funds and can transfer to overseas, when they needed or when they feel it's a better investment opportunity.

As I have said before, an NRE saving account is for depositing income from abroad, while an NRO saving account is mainly for putting Indian incomes.

There are also a few more important differences between them e.g. In the case of NRE account, only NRIs can become joint account holders but for NRO accounts both residents and non-residents can become joint account holders, you can see my post 5 difference between NRE and NRO accounts for more detail.

What kind of fund you can transfer from NRO to an NRE account?

Actually, I thought to write this article, when one of my friends asked me, Can I transfer funds from the NRO saving account to the NRE account? he was under the impression that it's not allowed. As I said, it's allowed but there are some restrictions on what kind of fund you can transfer from NRO to an NRE saving account. 

The key point is the source of the fund should be repatriable i.e. can be freely transferred to an overseas bank account.  here are some key things to note, while doing fund transfers from NRO saving accounts to NRE accounts.

1. An NRI can only transfer funds from NRO to an NRE account if the total amount is within USD 1 million in a financial year. This is the maximum limit of funds, which can be transferred from an ordinary to an external account.


2. You can transfer interest earned on NRO accounts to your Non-resident external(NRE) and your Foreign Currency Non Resident Indian account. 

It means you can not open FCNR fixed deposit from all your NRO fund until you have interest earned which is more than the minimum amount required in a particular currency e.g. most of the banks including, ICICI, YES Bank, DBS, HDFC put a minimum threshold of 1000 USD

Here is full list of difference between NRE and NRO account for your reference:

3. Transfer of funds from NRO to NRE account is subject to payment of applicable taxes. Only if the taxes are clear you can move funds, which means you need to inform your bank in advance for documents, which can show that you have paid the tax. We will see about those documents in the next section.

4. You can transfer almost all the funds from an NRO account if the source of funds in the NRO account is transferable/ repatriable e.g. if the fund was initially transferred from an NRE account or deposited as a foreign currency traveler's cheque, or they are the result of an NRE fixed deposit or bond getting matured, initially opened using money from Non Resident External, NRE account.

Document Requirements for Transfer of Funds from NRO to NRE

Since interest earned on NRO accounts attract tax, while interest earned on the NRE account is tax-free, it's important to pay tax before moving funds from NRO to the NRE account, you need to submit certain documents. 

In order to transfer funds from NRO to NRE account, Non-resident Indians or NRI need to submit Form 15CA (online application form) and Form 15CB (Chartered Accountant Application) to the bank branch.

It's good to know that now it's possible for NRIs to transfer funds from NRO to NRE account subject to certain restrictions, as mentioned above. 

You can use this facility at your convenience, I would suggest reading and understanding your bank's policy or giving a call to your relationship manager to understand it better, especially if you are thinking to transfer a large amount from NRO to the NRE account. 

By the way, it's always best to keep your foreign income on the NRE account only, as it doesn't attract tax and is fully repatriable.

Other Articles about NRE accounts you may find useful:

• How to reduce the tax on NRO fixed deposits 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 Overseas from the 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 the NRE bank account?
• Is it mandatory to declare your foreign bank assets while filing income tax returns in India

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