Open NRE first. Most H1B holders' primary use case is: sending money from US salary to India for family support, savings, or investments. NRE handles this perfectly and the interest is tax-free.
The one-line answer
NRE account: For money earned outside India. Fully repatriable. Not taxed in India.
NRO account: For money earned inside India (rent, dividends, pension). Limited repatriation. Taxed in India.
Most H1B returnees need both.
NRE (Non-Resident External) Account
| Feature | Details |
|---|---|
| Purpose | Hold foreign income in India (salary from US, transfers from US bank) |
| Currency | Indian Rupees (converted from USD at deposit) |
| Repatriability | Fully repatriable — you can send all of it back abroad without RBI approval |
| Taxability in India | Interest is tax-free in India |
| Joint account | Only with another NRI |
| Best for | Sending money home from the US, maintaining India savings |
NRO (Non-Resident Ordinary) Account
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| Feature | Details |
|---|---|
| Purpose | Receive India-source income (rent, dividends, pension, maturity of old FDs) |
| Currency | Indian Rupees |
| Repatriability | Up to $1 million per year with CA certificate (Form 15CA/15CB) |
| Taxability in India | Interest is taxable (30% TDS) |
| Joint account | Can be with a resident Indian |
| Best for | Collecting rent from property, receiving Indian dividends |
Which one do you open first?
Open NRE first. Most H1B holders' primary use case is: sending money from US salary to India for family support, savings, or investments. NRE handles this perfectly and the interest is tax-free.
Open NRO when: You have rental property in India, receive Indian dividends or mutual fund income, or your NPS/PPF matures and needs a home.
Where to open
| Bank | NRE Features | NRO Features | Digital opening? |
|---|---|---|---|
| HDFC Bank | Best rates. In-US branch for assistance | Good | Yes |
| ICICI Bank | Good rates. iMobile app | Good | Yes |
| SBI | Lowest rates. Government trust | Available | Partial |
| Axis Bank | Competitive rates | Good | Yes |
| Kotak | Good digital experience | Good | Yes |
Documents needed
- Passport copy
- Visa copy (H1B stamp)
- US address proof (US bank statement or utility bill)
- Indian address proof
- Passport-size photos
Most banks allow NRE/NRO account opening from abroad — online or via Indian branch walk-in by family.
FCNR vs NRE
FCNR (Foreign Currency Non-Resident) is like NRE but the account holds foreign currency (USD, GBP, EUR) in Indian banks at 4-5% interest. Good if you want USD-denominated returns without the rupee conversion risk.
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