NRE vs NRO accounts: what they are and what your family needs to know
The difference between NRE and NRO accounts, how repatriation works, and why a nominee on each one matters — explained simply for NRIs in Australia.
If you're an NRI, you've probably been told to open an "NRE" or "NRO" account — and maybe nodded along without fully knowing the difference. They're not interchangeable, and which money goes where affects how freely it can come back to you (or reach your family). Here's the plain version.
The short answer
An NRE (Non-Resident External) account is for your foreign earnings parked in India, and the balance is freely repatriable. An NRO (Non-Resident Ordinary) account is for income that arises in India — rent, dividends, pension, a property sale — and repatriation from it is subject to limits and tax formalities. The RBI allows a nominee on both (RBI).
NRE: your foreign money in India
An NRE account holds money you've earned abroad and brought into India. Because it started as foreign income, the rules are generous: balances in an NRE account are freely repatriable — you can move the funds back out without the kind of cap that applies to an NRO account (RBI). It's typically used for savings you want to keep flexible.
NRO: your Indian income
An NRO account is where India-sourced income lands — rent from a flat, dividends, a pension, the proceeds of selling an asset. It's flexible to fund (including from rupee sources), but the trade-off is on the way out: repatriation from an NRO account is subject to limits and documentation (RBI). In practice, banks apply the RBI's framework, which permits remitting up to a yearly ceiling after the required tax certifications (commonly Forms 15CA/15CB) — confirm the current limit and paperwork with your bank.
FCNR, briefly
There's a third type worth knowing: FCNR (Foreign Currency Non-Resident) deposits, which hold fixed deposits in foreign currency and avoid rupee exchange-rate risk on the balance (RBI).
Why the nominee matters most
Whichever accounts you hold, the nominee is what your family will rely on. The RBI allows nomination on all NRE, NRO and FCNR accounts, and banks must offer it (RBI). A current nominee lets your family claim the balance without a drawn-out legal process.
But remember the cross-border catch: a nominee under Indian law is generally a custodian, not the final owner — ownership is settled by your will and succession law. So name nominees and make sure your will is clear. See nominee vs legal heir in India.
What to record for your family
- Which accounts you hold (NRE / NRO / FCNR), at which bank and branch.
- The nominee on each.
- Login details, kept securely.
- Any standing instructions, linked deposits or property income flowing in.
Keep it with the rest of your cross-border picture — our NRI India assets guide shows where accounts sit alongside PPF, LIC and property, and the free Cross-Border Checklist gives you a place to write it all down.
Frequently asked questions
What's the main difference between NRE and NRO? NRE holds your foreign earnings and is freely repatriable; NRO holds your India-sourced income and has repatriation limits and tax formalities (RBI).
Can I repatriate money from my NRO account to Australia? Yes, within the RBI's framework — up to a yearly ceiling after the required tax certifications. Confirm the current limit and forms with your bank (RBI).
Can I add a nominee to my NRI accounts? Yes. The RBI allows nomination on all NRE, NRO and FCNR accounts, and it's strongly recommended (RBI).
This guide is general information, not financial, tax or legal advice. RBI rules and limits are current as at June 2026 and can change; confirm with your bank and the RBI.