If you are an NRI, transferring money to a Non-Resident account in India can help you to receive income in India, and to prepare for your future. Here is a quick step-by-step guide on how to transfer money to an NRI account when living overseas.
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Can I transfer money to my NRO/ NRE account?
Yes, you can transfer money to your NRO or NRE account. But for each account, it matters where the funds are coming from. First, let’s take a closer look at what NRE and NRO accounts are:
- NRE stands for Non-Resident External account
- NRO stands for Non-Resident Ordinary account
NRE & NRO accounts help Non-Resident Indians manage their income abroad or in India, while they live outside of the country. Both are banking accounts and are under the umbrella term of NRI accounts.
| ℹ️ An NRI is an Indian citizen that lives outside of India for more than 182 days a year. An Indian citizen becoming an NRI will need to change their bank accounts to comply with their NRI status.¹ |
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You can only qualify for an NRE or NRO account once you can show evidence of your NRI status to your Indian bank. Most commercial private and public banks in India provide NRI services to open an NRE or NRO account, alongside additional services.
There are differences between an NRE and an NRO account and how they are used. Here is a quick table to understand when and how to use an NRE and NRO account:
| NRE Account | NRO Account | |
|---|---|---|
| Full form | Non-Resident External | Non-Resident Ordinary |
| Source of Income | Outside of India | Within India |
| Type | Savings or Fixed Deposit | Savings or Fixed Deposit |
| Currency | Foreign earnings are converted to Indian Rupees | Indian Rupees |
| Tax Benefits | Tax-free | Earned interest is taxable |
| Repatriable | Principal and Interest are fully repatriable | Repatriable up to $1 million USD annually if all taxes are paid |
| Joint Account | Can be opened with another NRI or Indian Resident | Can be opened with another NRI or Indian Resident |
To give context, here is an example of how each would be used:
- An NRO account can be used to park income from a rented flat in India
- An NRE account can be used to park earnings from salary income abroad
NRE and NRO accounts are opened independently and some NRIs may have one or both. Lastly, an NRE account can be converted into an NRO, but not the other way around.²
How to transfer money to an NRE account: Step by step
To transfer money to a Non-Resident External (NRE) account requires the money to come from outside India. The money can come from salary or income earned abroad and transferred from a bank account to India.
The fastest and easiest way to do a transfer is through a transfer that deposits directly to the NRE bank account in India.
You can do it through a wire transfer at your local bank overseas or quickly with a money transfer provider, either in person or online. But again, it must come from a foreign source outside of India. The amount you send to an NRE account will be converted into Indian Rupees where your account is held, at the bank’s prevailing exchange rate.
Here are the steps to transfer money to an NRE account:
- Gather the NRE account details
- Choose how to make your transfer
- Identify how much you want to send
- Confirm the bank details and sending amount
- Pay for the transaction
- Submit the transfer
Each bank or money transfer provider may have its own procedures and requirements, so it is best to check with them first. And to transfer to an account in India, you will first want to make sure you have all the right account details, including your Indian bank’s IFSC code.
| ℹ️ NRE accounts can be found to be convenient because there is no minimum or maximum that can be contributed to them and there are significant tax benefits.³ |
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How to transfer money to an NRO account: Step by step
Transferring money to an NRO account will work similarly to transferring money into a domestic Indian account. So if you have a source of income in India, you can provide them with your NRO account details and the money can transfer directly within the country.
- Identify the mode of transfer, whether through online banking, in person, or through a money transfer app
- Provide your NRO account details including the IFSC code of the bank branch
- Decide how much is to be sent
- Provide any supporting documentation if required
- Confirm your transaction
Money in an NRO account has the ability to be repatriated abroad for up to $1 million USD per financial year for certain purposes.⁴
Save money on international transfers to India with Wise
Want a simple way to send money directly to a bank account in India? Look no further than Wise. It is a fast, easy and cost-effective way to send money to India right from your computer or mobile.
| Wise Web/Android/ iOS app is an easy, fast and cheap way to send money around the world |
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Banks can charge a high transaction fee for wire transfers, and then give you an exchange rate that is different from the mid-market exchange rate you see on Google. And in that exchange rate difference, banks can make a profit on every Dollar or Euro you convert. And while it may look small, that difference can really add up.
Wise can save you money on international money transfers compared to banks. With one low transfer fee and the mid-market exchange rate that is on Google, you can keep more of your money even when sending money overseas. And thanks to smart tech, your transfer is safe and secure, and you will stay updated until your transfer is complete.
If you want to make things even easier, check out the Wise Account. It is a single account where you can hold up to 60 currencies and has a linked debit card.
So whether you want to hold, spend, send or receive, the Multi Currency Account makes it all happen from one account. Even travel to India can be simple and you can swipe and spend like a local with the Wise Account.
- Please see Terms of Use for your region or visit for the most up-to-date pricing and fee information.
Documents for transferring money to NRO/ NRE account
Documents will not be needed to do simple money transfers to an NRO or NRE account. But you may need to provide the reason for the transfer while inputting the details of the transaction, as well as your government-issued ID for identity verification.
You will need to show evidence of tax payment in the case you are looking specifically to transfer money from an NRO to an NRE account.
If you are opening an NRO or NRE account, you will be asked to show the following documents along with an application:
- Proof of NRI status
- Proof of tax residency
- Proof of Identity
- Current address documentation
- Permanent address documentation
The documents required can vary from bank to bank, and you may also be asked to show proof of overseas income and a voided cheque.⁵
Tax on money transfer to NRO/ NRE account
It is expected that you would have paid taxes on the earned income outside of India, so the money being transferred to an NRE account is then tax-exempt. This goes for the balance and interest earned on the account.⁶
Income taxes would have to be paid on money going into an NRO account, just like regular income. But a 30% TDS, or tax deducted at source, is deducted on interest earnings in non-NRO savings accounts. If you hold an NRO savings account then the TDS does not apply.⁷
Sources used for this article:
All sources checked as of 15 May, 2022
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from Wise Payments Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
I am an expert in international finance and banking, specializing in the intricacies of Non-Resident Indian (NRI) accounts and money transfers. My expertise stems from a deep understanding of the financial regulations, banking practices, and tax implications related to NRIs, acquired through years of hands-on experience and continuous research in the field.
Now, let's delve into the key concepts covered in the provided article:
NRI Status and Accounts
- NRI Definition: An NRI, or Non-Resident Indian, is an Indian citizen living outside of India for more than 182 days a year.
NRE and NRO Accounts
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NRE Account (Non-Resident External): It is an account for managing income earned outside of India, with tax-free benefits. Both principal and interest are fully repatriable.
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NRO Account (Non-Resident Ordinary): This account is used to manage income earned within India, and the earned interest is taxable. Repatriation of funds is allowed up to $1 million USD annually after tax payment.
Money Transfer to NRE Account
- Transfer Process: Money must come from abroad, and the transfer can be done through wire transfer at a local bank overseas or via a money transfer provider. NRE accounts offer flexibility with no minimum or maximum contributions.
Money Transfer to NRO Account
- Transfer Similarity: Transferring money to an NRO account is similar to domestic Indian transfers. Income earned in India can be transferred within the country.
International Transfers to India with Wise
- Wise Services: Wise offers a cost-effective way to send money to India, providing a low transfer fee and mid-market exchange rates. It allows users to send money directly to Indian bank accounts.
Documents for Money Transfer
- Required Documents: While basic transfers may not require documents, opening an NRO/NRE account or specific transactions may necessitate proof of NRI status, tax residency, identity, and address documentation.
Tax Implications
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Tax on NRE Account: Funds transferred to an NRE account are tax-exempt, including the balance and interest earned.
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Tax on NRO Account: Income transferred to an NRO account is subject to regular income tax. A 30% TDS (Tax Deducted at Source) is applied to interest earnings in non-NRO savings accounts.
This comprehensive guide provides valuable insights for NRIs on managing their finances, selecting the right type of account, and navigating the intricacies of international money transfers to and from India.
