Check your funds, status and plans before choosing an account. Check whether the account can receive your money, which interest-exemption conditions apply, and how you may need to move it later. An account label alone cannot determine your final tax or eligibility.
Compare deposit assumptions in the NRE/NRO calculator. It illustrates interest and withholding and lets you download saved scenarios; it does not select an account for you.
The differences to check
NRE means Non-Resident External; NRO means Non-Resident Ordinary. Both hold Indian rupees. RBI account FAQ.
| Question | NRE | NRO |
|---|---|---|
| Currency held | INR | INR |
| Interest in India | Exemption is conditional | Interest is taxable; review withholding separately |
| Moving money abroad | Review account conditions | Distinguish current income from the asset-remittance facility |
Permitted NRE credits include qualifying current income such as rent and pension, retaining repatriable character. NRO can receive Indian dues and foreign remittances. Ask your bank to confirm the route and tax documentation for your funds. RBI permitted credits.
Interest exemption is conditional
The Income Tax Department's current FAQ says the NRE interest exemption continues under the Income-tax Act, 2025. It depends on the FEMA nonresident definition or RBI permission and an account maintained in accordance with FEMA. Indian income-tax residency alone does not settle that question. Official FAQ, questions 23–24.
An Indian exemption does not establish an exemption abroad. For example, U.S. residents generally report worldwide interest. IRS guidance.
If your status changes, ask your bank about account redesignation. An old account label alone cannot confirm eligibility. RBI status changes.
Withholding is not a final-tax calculator
TDS is tax deducted by the payer and paid to the government. Ask the bank for the withholding applicable to your interest, and review final liability separately. This guide does not assign a universal final tax rate to NRO interest. Income Tax Department: TDS.
Treaty relief requires the applicable eligibility and documentation. The current portal describes Form 41 for supporting nonresident DTAA claims under the 2025 Act. Check the requirements for your tax year with your bank or adviser; selecting USD or another currency does not establish treaty residence. Official treaty-relief documentation guide.
Separate the repatriation routes
RBI separates NRO current-income remittances from the conditional USD 1 million annual facility for NRI/PIO balances and other eligible assets, April–March. Ask the bank to review your funds, prior use and documentation; do not assume a fresh allowance for each account. RBI remittance guidance.
Make a comparison you can review
Use the deposit worksheet after collecting your bank's terms:
- Enter an INR principal, or supply your own foreign-currency conversion assumption.
- Add the actual annual rates and term you want to examine.
- Enter the bank-confirmed withholding percentage. The worked example's percentage is arbitrary, not a recommended rate.
- Leave NRE exemption unconfirmed when unsure. Its cash result will stay uncalculated.
- Save scenario A, change an assumption and save B. Each keeps its own inputs.
- Download the saved CSV worksheet. It includes the assumptions and limits, with final Indian/global tax marked as not calculated. Unsaved edits are excluded.
Different deposit amounts or terms need separate review; a larger maturity amount is not automatically a better return. Ask the bank to explain compounding, premature withdrawal and any charges before comparing offers. The tool uses an illustrative quarterly method, not each bank's actual accrual schedule.
Before moving funds into India, confirm the receiving account with your bank, then compare supported INR transfer routes. Account suitability, transfer pricing and tax review are distinct decisions.
Sources checked October 25, 2026. The linked RBI FAQ is dated January 16, 2025. This guide and worksheet do not determine account eligibility, treaty entitlement, repatriation capacity or final tax.