NRE FD (NRE Fixed deposit) | NRO FD (NRO Fixed Deposit)

Have you ever stumbled upon two buzzwords, NRE FD (NRE Fixed deposit) and NRO FD (NRO Fixed Deposit) and thought about the difference between these two?
Let’s talk about these here in this post.

NRE and NRO accounts are for Non-Resident Indians. NRE stands for “Non-Resident External”. And NRO stands for “Non-Resident Ordinary” .

NRE FD & NRO FD
NRE FD and NRO FD

NRE FD

When a Non-Residential Indian wants to transfer and deposit foreign earnings to Indian banks then he/she has to open and utilize an NRE account opened in India. ‘E‘ of the word NRE points to the External earnings of an NRI.
When this external earning of NRI is invested as an FD or fixed deposit in an Indian bank then the related Indian account is known as the NRE FD account. Generally, banks publish a separate rate table for NRE FD.

NRO FD

When a Non-Residential Indian wants to manage the income earned in India by depositing the money to Indian banks then he/she has to open and utilize an NRO account opened in India. ‘O’ of the word NRO stands for Ordinary i.e. earnings made in India by an NRI.
When this earning of NRI is invested as an FD or fixed deposit in an Indian bank then the related Indian account is known as the NRO FD account. Generally, banks publish a separate rate table for NRO FD.

FAQ

Acronym of NRE account?

Non-Resident External Account

Single line definition of NRE FD

NRE is an account of an NRI in a bank in India to transfer his foreign earnings to India. when these earnings are invested as fixed deposits in that bank then the corresponding account is called the NRE FD account.

Taxability of NRE FD

Interest earned from NRE FD account is tax-free

Acronym of NRO account?

Non Resident Ordinary Account

Single line definition of NRO FD

NRO is an account of an NRI in a bank in India to manage his earnings made in India. When these earnings are invested as fixed deposits in that bank then the corresponding account is called the NRO FD account.

Taxability of NRO FD

Interest earned is taxable for NRO FD Accounts.

What are the rules for joint accounts for NRE and NRO?

– Any two NRIs can opt for an NRO joint account.
– Any two NRIs can opt for an NRE joint account.

To open an account jointly with an Indian:

– An NRI can open an NRO account jointly with an Indian resident citizen.
– However, an NRI can’t open an NRE fixed deposit account jointly with a resident Indian citizen, even if that person is a direct family member.

Conclusion

Hopefully, this post has given you a primary idea about NRE FD (NRE Fixed Deposit) and NRO FD (NRO fixed Deposit). Also, the key difference between NRE FD and NRO FD is covered here. The related read section below will help you to fetch some rate data provided by some banks in India.

Related reads:

SBI Fixed Deposit Rates / SBI FD Rates
BOI Fixed Deposit Rates / BOI FD Rates
PNB Fixed Deposit Rates /PNB FD rates
Deutsche Fixed Deposit rates
What is FD? Fixed Deposit FAQ
NRE FD (NRE Fixed deposit) | NRO FD (NRO Fixed Deposit)
NRE FD AND NRO FD
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