In this article, we’re sharing the NRE meaning in banking.
In short, it refers to Non-Resident External Account, which is a bank account that allows foreign funds to be converted into Indian rupees for investment into India.
We’ll be discussing the specific benefits of an NRE account, answering related questions, and of course providing a detailed explanation of the meaning of NRE accounts.
This article is part of our free series on banking, ranging from how to open accounts as a foreigner to NRI bank account opening, and everything in between.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
NRE Meaning in Banking
NRE, meaning Non-Resident External Account, refers to a bank account that allows account holders to deposit foreign currencies and convert them into Indian Rupees. The NRE account is one of the main accounts available to Non-Resident Indians (or NRIs) in India. The other account type that many NRIs consider is the Non-Resident Ordinary Account (or NRO).
Importantly, the NRE account has a different meaning than NRO accounts. While NRO accounts are designed to allow Non-Resident Indians to save and manage their Indian-sourced income, NRE accounts are designed to allow NRIs to deposit and invest foreign income in India.
In other words, NRE accounts are for international income being deposited into India while NRO accounts are for domestic income staying in India. In both cases, accounts are denominated in Indian Rupee.
There is one other account available to NRIs, which is the Foreign Currency Non-Resident Account (or FCNR). The FCNR account is again for Non-Resident Indians. However, instead of being denominated in India Rupee, the FCNR account is denominated in foreign currency, as the name suggests. The FCNR account is a fixed deposit account that may be attractive for any NRI looking to hold deposits in India but do not want exposure to the Indian Rupee.
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NRE Costs for Opening Accounts
NRE costs for opening accounts and maintaining accounts will vary depending on where the account is held. That said, most banks do not charge for opening the account or the initial round of basic charges, such as ATM cards or even reactivating a dormant account.
That said, banks do charge for basic banking services, ranging from accessing cheques to using out-of-network ATMs. Additionally, it is common practice to charge an account holder if the balance of the account drops below a specified threshold during the month. However, the minimum deposits to open are considered nominal by most NRI standards.
Here is a closer look at some of the common charges you might expect when opening an NRE account.
NRE Savings Account Fees & Charges
- Balance below minimum: Rs 150 to Rs 650
- Chequebook: Rs 100
- Manager’s cheque: Rs 45
- Stop payment: Rs 100
- International debit card: Rs 500
- Domestic debit card: Rs 200
- Out-of-network ATM withdrawal: Rs 20
- Debit card withdrawal: Rs 125
- And more
Frequently Asked Questions
Below are two of the most common questions that we receive from people looking into NRE meaning. If you have further questions you would like answered, don’t hesitate to get in touch with us directly.
What Does NRE Stand For?
In banking, NRE stands for NRE account, meaning Non-Resident External Account. This is an account that allows individuals to deposit their foreign currency earnings directly into an Indian bank, which converts any foreign currency deposits automatically into Indian Rupee.
What Are the Disadvantages of a NRE Account?
The disadvantages of an NRE account are driven by one of the commonly referred to benefits, which is that all foreign currency deposits are automatically converted into Indian Rupees. This is a disadvantage if the foreign currency that you originally held prior to depositing outperforms the Indian Rupee during a given time period, costing you money.
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