NRE, NRO and FCNR Accounts Explained for US Residents

NRO repatriation limit	USD 1 million per financial year	Source
NRE and FCNR(B) repatriation	Freely repatriable	Source
FBAR filing trigger	Indian + other foreign accounts over $10,000 combined, at any time in the year	Source

What is the difference between NRE, NRO and FCNR accounts?

NRE and NRO are rupee accounts; FCNR(B) is a foreign-currency term deposit. NRE holds money from abroad and can be taken back out freely, NRO holds money earned in India and is capped on repatriation, and FCNR(B) keeps your savings in dollars.

	NRE	NRO	FCNR(B)
Currency	Indian rupees	Indian rupees	Foreign currency (e.g. USD)
Money in	Earnings from abroad	Income in India: rent, dividends, pension	Earnings from abroad
Taking money out of India	Freely repatriable	Current income, plus up to USD 1 million per financial year	Freely repatriable
Indian tax on interest	Exempt for persons resident outside India	Taxable, deducted at source	Exempt for persons resident outside India
US tax on interest	Taxable	Taxable (credit may be available for Indian tax)	Taxable
Exchange-rate risk	Yes	Yes	No (held in foreign currency)

Repatriation limits are set by the Reserve Bank of India (RBI).

Which account should I use?

Most US-based NRIs need both: an NRE account to receive money from the US and an NRO account to collect Indian income such as rent. Add FCNR(B) deposits only if you want to avoid rupee exchange-rate risk on savings you keep in India.

Sending your US salary to India: NRE.
Rent from a flat in India, dividends, an Indian pension: NRO.
Savings you plan to bring back to the US in dollars: FCNR(B) or NRE.
Selling Indian property: proceeds usually go to NRO first, then out under the USD 1 million limit.

What happens to my Indian savings account after I move to the US?

Once you become a non-resident, your ordinary resident savings account has to be redesignated as an NRO account. Tell your bank about the change in your residential status; keeping a resident account as a non-resident breaks Indian foreign-exchange rules.

The same applies in reverse: if you move back to India, your NRE and NRO accounts must be converted to resident accounts. See Retirement and moving back.

Is NRE interest tax-free in the US?

No. NRE interest is exempt from Indian income tax for persons resident outside India, but US citizens and residents are taxed on worldwide income, so it is taxable on your US return like any other interest.

Report NRE, NRO and FCNR interest as interest income on your US return, converted to dollars.
Indian tax deducted on NRO interest may be claimable as a foreign tax credit, which reduces double taxation; the US–India tax treaty also applies (IRS).
Interest earned in India counts even if you never bring it back to the US.

Do I have to report my NRE and NRO accounts to the US government?

Very likely. If the combined value of all your foreign accounts exceeds $10,000 at any time in the year, you must file an FBAR, and larger balances can also require Form 8938 with your tax return.

See FBAR and FATCA for Indian accounts for the thresholds and deadlines (IRS).

Account setup checklist

Redesignate resident savings accounts to NRO
Open an NRE account for money from the US
Route Indian rent and dividends to NRO
Track yearly maximum balances for FBAR
Report all Indian interest on your US return

Frequently asked questions

Can I hold an Indian account jointly with my parents?

NRO accounts can be held jointly with residents. Joint NRE accounts with a resident relative are allowed only on restricted terms that vary by bank, so ask your bank what it permits.

Can I transfer money from NRO to NRE?

Yes, within the USD 1 million per financial year facility, after taxes are paid, according to the RBI.

Are FCNR deposits safer than NRE deposits?

Not safer as deposits, but FCNR(B) removes rupee exchange-rate risk because the deposit is held in foreign currency.