Ordinary Non-Resident Rupee Account (NRO Account)

As the name suggests, this account is an Ordinary Non-Resident Account in Rupees, also known as NRO account. The existing accounts of any Indian National can be designated as NRO, upon one’s NRI status. Or such accounts can also be opened with initial deposits paid in any bank authorized to open Non-Resident accounts.

- An NRO can be savings, current or term deposit accounts. These accounts are ideal for those who have a stable income from pensions, dividends, interest etc. You can also transfer funds to these accounts from abroad.

- An NRO account can be held jointly with Indian residents and the funds can be put to similar use as with NRE accounts. But it is to be noted that the interest earned on deposits to NRO accounts is taxable.

Disadvantages of NRO:

- Interest earned on balances in NRO Accounts is not tax exempted. Rather income tax is deducted at source (TDS) that is, at the time of payment of interest by the bank.

- Balance held in NRO account can neither be send back. No transfer of funds in foreign currency is allowed without prior sanction of Reserve Bank as well. So overall, the money stays ‘as is’ in India.