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NRI workflow
It matters more than any rate: the account type decides whether interest is taxable and whether the balance can leave India freely. Answer four questions, then read the conditions.
Account mix your answers point to
No NRI account needed yet
Conditions that decide the outcome
RBI — accounts in India by non-residents · educational tool, not advice. Confirm your residency position and paperwork with your bank.
Residency decides which rulebook applies — and it is not a matter of convenience.
LRS is a resident facility: RBI frames it for resident individuals at USD 250,000 per financial year. An NRI is not a resident for that purpose, so LRS limits are irrelevant to them — and the USD 1 million per financial year remittance facility for eligible balances is what actually governs money leaving an NRO balance, subject to taxes already settled and the bank's documentation.
FEMA residency and income-tax residency are related tests but not the same test, and the NRE interest exemption follows FEMA status. That is why banks ask for proof of overseas residency when the account is opened, and why returning to India triggers a re-designation exercise rather than a simple address change.
No. RBI states LRS is for resident individuals, up to USD 250,000 per financial year. An NRI moves money under FEMA rules instead — the USD 1 million per financial year facility for eligible NRI/PIO balances and other eligible assets is the one people confuse with it, and it is conditional on RBI conditions and the bank's documentation.
Interest on NRE balances is exempt under section 10(4)(ii) while you are a person resident outside India under FEMA. The exemption ends when you become resident, and it never covered the investments you buy with the money — only the account interest.
They are re-designated to resident accounts under FEMA, and the NRE interest exemption stops applying once you are resident. Plan the re-designation with your bank rather than discovering it at the branch — and remember that FEMA and income-tax residency are related but separate tests.
Only if money flows both ways: NRO for rupees you earn in India (rent, pension, dividends, interest) and NRE for overseas earnings you bring in. If you have just one of those, one account is enough — and if you have neither yet, the honest answer is that you may not need an NRI account today.
Next: the repatriation & TCS checklist →
Reviewed 2026-09-24. Educational content, not personalised advice.