What happens to your NRI Account when you return to India?

NRI banking is a pivotal vertical of the Indian banking and financial system. It exclusively caters to the banking requirements of Non-Indian Residents, Persons...
HomeBusiness NewsWhat types of deposits does an NRO Account allow?

What types of deposits does an NRO Account allow?

You gain the Non-Indian Resident status when you move overseas for education and employment. You would identify yourself as a Person of Indian Origin or an Overseas Citizen of India if you can trace your or your ancestor’s roots back to India. Whether you are an NRI/ PIO/ OCI, the Foreign Exchange Management Act governs your financial and banking transactions in India. Hence, you need to follow the rules and regulations they have laid down.

The FEMA states that as an NRI/ PIO/ OCI, you can hold a resident Bank Account in India. You must close or convert the resident Bank Account into an NRI Account. As the name suggests, the NRI Account is exclusively curated to cater to the specific banking needs individuals like you may have. Opt NRI Account opening to simplify your banking experience in India.

NRI Accounts are of two types. A Non-Resident Ordinary Account is a popular type of account you can open. It lets you deposit and grow your Indian Rupee income. Here is an insight into the type of deposits an NRO Account allows:

Current income

While you may move overseas, you may continue to hold investments and assets in India, such as Fixed Deposits, stocks, Mutual Funds, and residential/ commercial property. These investments and assets generate returns periodically and are often regarded as current income. You can deposit this current income in an NRO Account to ensure its safekeeping and keep it working by earning a competitive interest rate on it.

Note that you are liable to pay taxes on this current income as per the governing tax laws. You can fully repatriate the current income to your country of residence at any time.

Capital income

Capital income refers to the proceeds obtained from the sale of your investments and assets held in India. Simply put, it is the money you receive on FD maturity, stock/ Mutual Fund redemption, and residential/ commercial property sale. Typically, this capital income is significant. Hence, you would want to secure it. Consider depositing the money in the NRO online account for this purpose.

Note that you are liable to pay taxes on capital income as indicated by the prevailing tax laws. You can repatriate up to USD 1 million of the capital income to your country of residence.


As an NRI, you can invest in the National Pension Scheme for your retirement. The scheme encourages you to make regular contributions and build a significant financial corpus over time. On maturity, you can channel the pension corpus into your NRO Account and utilise it to lead a comfortable retirement life.


You may receive a handsome amount in INR as a gift. You can consider depositing that money into the NRO Account. As mentioned, the account will not only secure your money but also keep it growing based on a competitive NRO Account interest rate. This means you benefit from the account in every which way.