Differences Between NRO Accounts And Forex Accounts in the Indian Banking Sector.

In this article differences between the NRO Account NRE Account FCNR (B) account and RFC (Resident foreign currency) RFC(D) (Resident foreign currency domestic) account in EEFC (Exchange earner foreign currency) account, so let’s start without wasting any time,

In an NRO Account it is maintained in Indian currency Indian rupees, in an NRE Account is also maintained in Indian rupees, but in FCNR (B) it can be in any freely convertible currency, so any kind of freely convertible currency you can use, can be dollars it can be Euro it can be a pound and any kind of currency that the bank supports you can open the FCNR account in that, so this is a very important thing to remember there is no exchange risk when

you are opening an FCNR account, but if you are having an NRO Account or the NRE Account then exchange risk is there because you are converting, so you might be losing some money because of the currency conversion risk, then who can open these accounts, so as I talked about the non-resident Indians or the PIOs also known as a person of Indian origin, all those people can open so it’s the same NRI or PIO for NRO for NRE and FCNR (B),

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Then which income can you put into each of these accounts?

For the NRO as we talked about only the domestic income so any income that you have earned in India can be put into this account, in NRE it has to be foreign income so any kind of foreign income and also FCNR (B) all the foreign income you have to put in,

And then let’s talk about repatriation means that you can remit this money that’s in that account outside of India, so you can send it abroad, so in the NRO Account maximum of up to 10 lakh dollars or 1 million dollars per financial year you can remit, this is very important to remember and in the NRE account or the FCNR (B) account there is no limit,

And the taxation purpose is also important for the NRO Account as per slab you are going to be taxed because remember the concept it is Indian income, so it will be having Indian tax and that is why the interest that you are earning in your NRO Account you have to pay the money as per the Indian tax slab, in the NRE Account and FCNR (B) account you have no tax on the interest

it’s very important that both of these two accounts are tax-Free Accounts, and about the joint account so all these three types of accounts that you see you can open with an NRI jointly or with an Indian, so you must be an NRI remember for opening this account you can open it an NRI or with an Indian who is your close relative in India,

Now coming to the next categories of accounts you have the RFC account the resident foreign currency account RFC (D) account which is the resident foreign currency domestic account and the EEFC which is the exchange-earners foreign currency account,

What is the main difference between these three?

Let’s take a look, so these three accounts the account type first show in the RFC account you can have just like we discussed in the NRE or the NRO Accounts, you can have a savings account current account recurring deposit fixed deposit whatever you want, so all types of accounts are allowed, in the RFC (D) account however you can have an only current account so no interest will be paid to you this is very important,

all the exchange earner foreign currency accounts can also be only in current accounts, so there will be no interest that you are going to earn in the EEFC accounts and about the currencies, so all these three types of accounts that you have can be in any freely convertible currency just like we had for the FCNR (B) accounts, So these are the main difference between these three accounts,

So as I have covered the difference between the NRO account NRE account FCNR (B) account and RFC (Resident foreign currency) RFC(D) (Resident foreign currency domestic) account in EEFC (Exchange earner foreign currency) account, I hope this article was informative for you, Thank you.