NRE Account
A Non-Resident External Saving Bank Account (NRE Account ) is for NRIs who want to invest their foreign earnings in India on a repatriation basis.
An NRE bank account is an external saving bank account opened by Non-resident Indians (NRIs). This is the principal it is called the Non-Resident External (NRE) account.
As it is an external account, the money in the NRE account can be taken out of India at any point of time. It means that the NRE account is fully repatriable. Both the principal and the interest earned can be repatriated.
In an NRE Account, the money is deposited in foreign currency and can be converted to foreign currency by the account holder at any point of time. It can be remitted out of India without any hassle.
An NRI can transfer money in USD or any other currencies from a foreign bank account. The money is converted to rupees (INR) when it hits the NRE account. Funds kept in the NRE account can be converted back to the native currency (i.e. USD) and can be transferred back to your foreign account along with the interest earned.
NRE Account Types
NRE bank account is further classified into:
- NRE PIS Account
- NRE Account (Non-PIS)
The NRE PIS Account is an NRE Saving Bank Account with PIS ( Portfolio Investment Scheme (PIS) Permission opened by NRIs specifically to invest in the Indian stock market. This account is primarily used for NRIs investment in stocks in India. All transactions in this account are reported to RBI by the bank.
The NRE Non-PIS Account is a normal NRE saving bank account without any PIS permission. Transactions in this account are not reported to RBI.
NRE to NRO Transfer
Money can be freely transferred from NRE to NRO bank accounts. There are no RBI restrictions on this. No documentation required to transfer funds from NRE to NRO account.
Money can be transferred back from NRO to NRE with certain documentations and a limit of up to 1 million USD in a financial year.