Non-Resident Indians can open two types of accounts in India – NRE and NRO accounts – to save their foreign and Indian earnings. However, guidelines slightly vary and so do the purposes. Many NRIs often ask can I deposit Rupees in NRE account? Well, the simple answer is no.
Can I Deposit Rupees in NRE Account?
No, INR or Indian rupee is not accepted in an NRE account. An NRE account is a Non-Resident External account and only remittances from outside India in any of the acceptable foreign currencies, transfer from another NRE account, FCNR account and redemptions from NRE mutual funds or trading accounts are allowed.
- NRE Account is a Non-Resident External Rupee account.
- NRE Account allows deposit in a foreign currency like Pound Sterling, USD, AUD, CAD, SGD, etc. and the bank converts the same into Indian Rupee and credits to the NRE account.
What is an NRE account?
An NRE savings account is a bank account that allows NRIs to save their foreign currency savings in an Indian bank. NRIs and OCIs can use an NRE account to deposit money in any foreign denomination and withdraw it in INR (Indian Rupees).
Key benefits of an NRE account are the interest earned is not taxable in India and funds (both principal and interest) can be freely repatriated abroad without any limit.
Permissible Credits in the NRE Account
NRE accounts are designed to hold foreign funds of NRIs. Here are the specific types of credits which can be deposited in an NRE account:
- Inward remittances in other foreign currencies subject to the RBI permission.
- Interest accruing on the funds deposited in the NRE account.
- Fund transfers from other NRE and/or FCNR accounts.
- Cash of personal cheques drawn on the NRI’s foreign currency accounts.
- Bank drafts payable in acceptable currencies, including assets expressed in INR, which may be deposited when the NRI visits India. Account-holders need to provide proof of their NRI status to make the deposit.
- Foreign currency notes and traveler’s cheques issued abroad. If the total value of the foreign currency notes deposited into the NRE account is in excess of USD 5000 (or its equivalent), the depositor needs to inform the Customs Authorities by filling a Currency Declaration Form upon arriving in India. The same rule applies if the full value of the foreign currency and traveler’s cheques is more than USD 10,000 or its equivalent.
- Current income including rent, pension, dividend, interest, etc. or those credits that are repatriable may be credited to the NRE account.
To ask any question related to NRI account opening in India, you can download SBNRI App from the Google Play Store or App Store. Or click on the Apply for NRI button in this blog.
NRI Banking can invite multiple queries and doubts. We, at SBNRI aim at resolving these doubts and make the entire banking experience seamless for NRIs.
No, you cannot deposit cash into an NRE account from a savings account in India. However, you can transfer funds from one NRE account to another or even from an NRO account.
NRIs are allowed to transfer funds from an NRE account to another NRE account, and NRO account to an NRE or Non-Resident External account. However, the Reserve Bank of India has capped the maximum fund transfer at USD 1 million a year.
You can transfer or deposit money in an NRE account by mailing foreign currency cheques and demand drafts.