While opening a NRE account in India, NRIs cannot open a joint account with a resident Indian. What this means is that the joint account holder also has to be another Non Resident Indian.
But, what if the NRI is an unmarried individual who wishes to assign the proceeds in his NRE account in case of his death to a resident Indian.
In that case the NRI can consider nominating a resident Indian for his NRE account. Nomination of an NRE account in the name of a resident Indian is permitted.
Also, a resident Indian holder of Power of Attorney is permitted to operate the NRE Account. Operations are restricted to local disbursements (other than gifts to resident), including for investments subject to compliance of relevant regulations. But, remittances/repatriation abroad may be made only to the account holder. In case where the account holder is eligible to make investments in India, the power of attorney holder may be permitted by authorized dealer branch to operate the account to facilitate such investments.
Income earned by way of interest on a NRE Savings Accounts or a NRE Fixed Deposit Account is tax free and is also free from Wealth Tax.
Interest rates on NRE Deposits are presently in line with NRO or domestic term deposits and interestingly do not attract tax like both of the above. Also read Is it illegal for NRIs to maintain a resident savings account?