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NRE, NRO or FCNR? Indian bank accounts after you move
Once you live abroad, your Indian savings account has to become an NRO account. What NRE, NRO and FCNR(B) accounts are for, how each is taxed in India and the US, and how much you can move to the US.
Under India’s foreign exchange law (FEMA), an Indian citizen who lives outside India is a non-resident Indian (NRI). Banks are supposed to be told when you move: your ordinary resident savings account must be redesignated as an NRO account. Many people forget this for years; tell your bank and let it convert the account.
The three accounts
| NRE | NRO | FCNR(B) | |
|---|---|---|---|
| Currency | Indian rupees | Indian rupees | US dollars (or another foreign currency) |
| What goes in | Money you earn abroad | Money earned in India: rent, dividends, pension, sale proceeds | Money you earn abroad |
| Take it back to the US? | Freely, principal and interest | Up to USD 1 million per financial year (April–March), after tax | Freely |
| Interest taxed in India? | No, while you are an NRI | Yes, with tax deducted at source | Commonly exempt for NRIs (check with your bank) |
| Interest taxed in the US? | Yes | Yes | Yes |
| Joint with a parent in India? | Yes, “former or survivor” | Yes, “former or survivor” | Yes, “former or survivor” |
FCNR(B) accounts are term deposits of one to five years. Because they stay in dollars, the rupee’s fall doesn’t eat the balance.
How the tax works
In India. NRE interest is exempt while you remain an NRI. NRO interest is taxed, and the bank deducts tax at 30% plus surcharge and 4% cess unless you give it a lower treaty rate with the right forms. If more was deducted than you owe, you file an Indian return to get it back (see Indian tax return as an NRI).
In the US. Once you are a US tax resident (most H-1B workers are, from the first year), the US taxes your worldwide income. That includes NRE interest, which India doesn’t tax. Indian tax paid on NRO interest can usually be claimed as a foreign tax credit. See US tax on Indian income.
Moving money to the US
- NRE and FCNR(B): no limit.
- NRO: up to USD 1 million each financial year, including property sale proceeds, after Indian tax is paid. The bank will ask for the tax forms that replaced Forms 15CA/15CB under India’s new Income-tax Act (Forms 145 and 146 from April 2026).
- Keep the bank’s remittance advice; you’ll want it if the IRS or your US bank asks where the money came from.
Reporting to the US
Every Indian account you hold or can sign on, including a parent’s account where you’re a joint holder, counts toward FBAR and possibly FATCA (Form 8938). Check yours with the FBAR & FATCA checker.
Coming back to India
When you return for good, NRE/NRO accounts have to be redesignated as resident accounts. FCNR(B) deposits can run to maturity.
The good
- NRE and FCNR(B) money can come back to the US freely
- NRE interest is tax-free in India while you are an NRI
- Parents can be joint holders on a "former or survivor" basis
The hard
- NRE interest is still taxable in the US
- NRO interest has Indian tax deducted at 30% plus surcharge and cess
- Every one of these accounts counts for FBAR and FATCA reporting
Sources
- RBI: FAQs on accounts by non-residents (NRE, NRO, FCNR(B), USD 1 million NRO limit)
- RBI: Accounts of residents and non-residents, FAQ (Jan 2025)
- Income Tax Department: Non-resident FAQ (NRE interest exemption, when an NRI files)
- Income Tax Department: TDS rate for NRIs on fixed-deposit interest
- IRS: Taxation of resident aliens (worldwide income)
Rules change often. If something here looks out of date, it probably is; check the official source and talk to an immigration attorney about your own case.