What is the difference between an Non-Resident External (NRE) and an Non-Resident Ordinary (NRO) account?
An Non-Resident Indian (NRI) can choose to open either an NRE or NRO savings bank account to invest in the Indian stock market. The trading and demat account must be opened based on the bank account type.
- An NRE bank account is used for an NRI to park his foreign earnings in India.
- An NRO bank account is used for an NRI to manage income earned in India.
| Particulars | NRE Trading Account | NRO Trading Account |
|---|---|---|
| Purpose | For investments on repatriation basis | For investments on non-repatriation basis |
| Savings Bank Account Type | NRE (Portfolio Investment Scheme (PIS))/ NRE savings bank account | NRO savings bank account |
| Repatriation of Funds | Fully repatriable | The principal amount after taxation is repatriable. You can transfer up to 1 million USD in a financial year. Interest earned is also repatriable. TDS is deducted. |
| Intraday Trading | Not allowed | Not allowed |
| F&O Trading | Not allowed | Allowed |
| Commodity Trading | Not allowed | Not allowed |
| Joint Holders | Allowed | Allowed |
| TDS Applicability | Yes | Yes |
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