As a Non-Resident Indian (NRI), you are probably familiar with the two main types of bank accounts to manage your finances here in India—the Non-Resident Ordinary (NRO) account and the Non-Resident External (NRE) account. While both accounts have distinct purposes, you may need to make a funds transfer from an NRO to an NRE account for some reason.
But can you transfer funds from an NRO to an NRE account? What are the reasons, benefits, and considerations while making such a fund transfer?
Let’s explore how to transfer money from your NRO to an NRE account and answer all your questions.
What are NRO and NRE accounts?
An NRO savings account holds income earned in India, subject to taxation, and the funds are maintained in Indian Rupees.
On the other hand, an NRE savings account holds foreign earnings, and the funds are freely repatriable, meaning they can be transferred back to the foreign country without restrictions. The interest earned on an NRE account is exempt from taxes in India.
Why transfer funds from an NRO to an NRE account?
There are several reasons why NRIs may need to transfer funds from their NRO account to their NRE account. One common cause is managing expenses abroad in a different currency..
What are the benefits of a transfer from an NRO to an NRE account?
Transferring funds from the NRO savings account to the NRE savings account lets you enjoy the following benefits
Is there any limit on transfers from NRO to NRE accounts?
The Reserve Bank of India permits fund transfers of up to $1 million per financial year from an NRO to an NRE account/overseas.
What are the documents required for transfer from NRO to NRE accounts?
To transfer funds from an NRO to an NRE account, you will have to provide the following documents
How to transfer money to an NRE account?
IDFC FIRST Bank, which allows for quick and seamless fund transfers from NRO account to NRE account, suggests following these steps for transferring money to an NRE savings account
After the verification of the documents, a transfer from the NRO to the NRE savings account will be initiated, and the money will be credited accordingly.
What are the considerations while transferring money to an NRE account?
While initiating a transfer from NRO to NRE accounts, there are essential considerations to keep in mind to ensure a smooth and hassle-free process
The bottom line
A transfer from an NRO to an NRE account is common among NRIs looking to manage their finances effectively. It empowers them with financial flexibility, tax efficiency, and repatriation benefits. Choosing a reliable banking partner like IDFC FIRST Bank can ensure a seamless and hassle-free fund transfer.
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