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6 things to know about NRE accounts


 6 things to know about NRE accounts
NRE accounts or non-resident external accounts can only be opened by Non Resident Indians. Here are a few things that one needs to know about NRE accounts.

1) RBI has deregulated interest rates on NRE deposits


Earlier, NRIs were earning barely 3.76% on NRE fixed deposits, as the rates were linked to LIBOR. Late last year, the RBI deregulated NRE fixed deposit interest rates and now it is possible to earn interest rates as high as 9-10%, which is also tax free. The RBI deregulated rates as the rupee was dropping against the dollar and the RBI wanted to encourage dollar inflows to support the rupee.

2) Income from NRE accounts are tax free

Any interest from NRE savings or NRE fixed deposits are tax free. This means that if a NRI has income from India and is filing his returns, he need not show the interest income earned from NRE accounts since they are tax free.

3) Cannot credit the account except remittance from abroad or another NRE account

One cannot credit an NRE account, unless the amount is remitted from aboard or through another NRE account/FCNR account or foreign exchange bought from abroad.

4) Fully repatriable

Amounts standing balance in an NRE fixed deposit or NRE savings accounts can be repatriated abroad. So, if you are an NRI and have an urgent need of funds abroad, you can easily repatriate the amount.

5) Joint account with resident not permitted

A joint account with another resident Indian is not permitted. A joint account has to be with another non resident Indian.

6) It is possible to get the loans and overdraft against your NRE accounts.


Banks and institutions offer loans and overdraft against NRE account balances.

Read more about: nre accounts
Story first published: Saturday, November 10, 2012, 9:43 [IST]
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