NRE vs NRO for Canadian NRI
Confused between NRE and NRO accounts? Learn which is best for Canadian NRIs to send money to India (CAD to INR), earn interest, and manage taxes easily.
NRE vs. NRO: Which Account to Fund with Your Canadian Earnings (CAD to INR)
Many Indians living in Canada often wonder whether to send their savings to an NRE (Non-Resident External) or NRO (Non-Resident Ordinary) account in India.
Both accounts are meant for NRIs, but they serve different purposes — one focuses on repatriating foreign income, while the other helps manage local Indian earnings.
If you earn in Canadian dollars (CAD) and want to transfer funds to India, it’s important to understand which account gives you better interest rates,
tax benefits, and ease of repatriation.
This guide will explain the difference between NRE vs NRO for Canadian NRIs and help you choose the best Indian bank account for Canadian residents.
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Whether you plan to invest, buy property, or support family back home, these FAQs will make NRI banking simple, transparent, and stress-free.
1. What is the main difference between an NRE and NRO account?
Short Answer: NRE is for foreign income; NRO is for Indian income.
Long Answer: An NRE account is used to deposit foreign earnings (like Canadian income) in India and is fully repatriable.
An NRO account is used to manage income earned in India such as rent, pension, or dividends.
Long Answer: An NRE account is used to deposit foreign earnings (like Canadian income) in India and is fully repatriable.
An NRO account is used to manage income earned in India such as rent, pension, or dividends.
2. Can a Canadian NRI open both NRE and NRO accounts?
Short Answer: Yes, you can open both.
Long Answer: Many NRIs maintain both NRE and NRO accounts — NRE for remitting Canadian income and NRO for managing Indian income.
Having both allows easy separation of taxable and non-taxable funds.
Long Answer: Many NRIs maintain both NRE and NRO accounts — NRE for remitting Canadian income and NRO for managing Indian income.
Having both allows easy separation of taxable and non-taxable funds.
3. Which account is better for sending CAD to INR?
Short Answer: NRE account.
Long Answer: For sending your Canadian salary or savings to India, the NRE account is best because the amount is repatriable, interest is tax-free, and currency conversion is seamless.
Long Answer: For sending your Canadian salary or savings to India, the NRE account is best because the amount is repatriable, interest is tax-free, and currency conversion is seamless.
4. Is interest on an NRE account taxable in India?
Short Answer: No.
Long Answer: Interest earned on an NRE account is fully exempt from Indian income tax, making it ideal for NRIs who wish to earn tax-free returns on foreign income.
Long Answer: Interest earned on an NRE account is fully exempt from Indian income tax, making it ideal for NRIs who wish to earn tax-free returns on foreign income.
5. Is interest on an NRO account taxable?
Short Answer: Yes, at 30% TDS.
Long Answer: The interest on NRO accounts is subject to 30% TDS in India, but you can claim a Foreign Tax Credit in Canada to avoid double taxation.
Long Answer: The interest on NRO accounts is subject to 30% TDS in India, but you can claim a Foreign Tax Credit in Canada to avoid double taxation.
6. Can I repatriate money from my NRO account to Canada?
Short Answer: Yes, up to USD 1 million per financial year.
Long Answer: Funds from an NRO account can be repatriated abroad after paying applicable Indian taxes and submitting Form 15CA and 15CB.
Long Answer: Funds from an NRO account can be repatriated abroad after paying applicable Indian taxes and submitting Form 15CA and 15CB.
7. Which account gives better exchange rates for CAD to INR transfers?
Short Answer: NRE accounts usually offer better rates.
Long Answer: Most banks provide preferential exchange rates on NRE deposits since the funds come directly in foreign currency.
NRO deposits may involve additional conversion and tax deductions.
Long Answer: Most banks provide preferential exchange rates on NRE deposits since the funds come directly in foreign currency.
NRO deposits may involve additional conversion and tax deductions.
8. Can I transfer money between my NRE and NRO accounts?
Short Answer: Yes, but only from NRE → NRO.
Long Answer: You can freely move funds from NRE to NRO, but not the other way around since NRO funds are considered taxable Indian income.
Long Answer: You can freely move funds from NRE to NRO, but not the other way around since NRO funds are considered taxable Indian income.
9. Which account should I use to receive rent from property in India?
Short Answer: NRO account.
Long Answer: All Indian-source income such as rent, dividends, or pension must be credited to your NRO account, as per RBI and FEMA rules.
Long Answer: All Indian-source income such as rent, dividends, or pension must be credited to your NRO account, as per RBI and FEMA rules.
10. Which account should I use to send money to India for family support?
Short Answer: NRE account.
Long Answer: Transfers to family in India are best done via your NRE account since it holds your foreign earnings and provides tax-free remittance options.
Long Answer: Transfers to family in India are best done via your NRE account since it holds your foreign earnings and provides tax-free remittance options.
11. Can I hold joint NRE or NRO accounts?
Short Answer: Yes.
Long Answer: You can hold both accounts jointly with another NRI. However, an NRE account cannot be jointly held with a resident Indian, while an NRO account can.
Long Answer: You can hold both accounts jointly with another NRI. However, an NRE account cannot be jointly held with a resident Indian, while an NRO account can.
12. Which banks in India offer the best NRE/NRO services for Canadian NRIs?
Short Answer: HDFC, ICICI, SBI, Axis, and Kotak.
Long Answer: These banks provide online account opening, CAD transfer options, and competitive exchange rates tailored for NRIs in Canada.
Long Answer: These banks provide online account opening, CAD transfer options, and competitive exchange rates tailored for NRIs in Canada.
13. Can I open my NRE/NRO account online from Canada?
Short Answer: Yes.
Long Answer: Most Indian banks allow NRIs to complete the process online with digital KYC and notarized document submission through their Canadian branches or partner banks.
Long Answer: Most Indian banks allow NRIs to complete the process online with digital KYC and notarized document submission through their Canadian branches or partner banks.
14. Can I deposit Indian income into my NRE account?
Short Answer: No.
Long Answer: Only foreign earnings can be deposited into an NRE account. Any income from India must go into your NRO account.
Long Answer: Only foreign earnings can be deposited into an NRE account. Any income from India must go into your NRO account.
15. Is the balance in NRE/NRO accounts safe?
Short Answer: Yes, both are regulated by RBI.
Long Answer: Funds in both accounts are secure under Indian banking laws and insured up to ₹5 lakh under the DICGC scheme.
Long Answer: Funds in both accounts are secure under Indian banking laws and insured up to ₹5 lakh under the DICGC scheme.
16. What happens to my NRE/NRO accounts if I return to India permanently?
Short Answer: They must be converted to resident accounts.
Long Answer: Once you regain resident status, your NRE/NRO accounts should be re-designated as resident accounts to comply with FEMA guidelines.
Long Answer: Once you regain resident status, your NRE/NRO accounts should be re-designated as resident accounts to comply with FEMA guidelines.
17. Can I get a debit card linked to my NRE or NRO account?
Short Answer: Yes.
Long Answer: Banks issue international debit cards for both account types, allowing easy withdrawals and online payments globally.
Long Answer: Banks issue international debit cards for both account types, allowing easy withdrawals and online payments globally.
18. Can I invest in Indian mutual funds through these accounts?
Short Answer: Yes.
Long Answer: NRIs can invest in mutual funds using either NRE or NRO accounts. NRE funds are fully repatriable, while NRO investments are repatriable after taxes.
Long Answer: NRIs can invest in mutual funds using either NRE or NRO accounts. NRE funds are fully repatriable, while NRO investments are repatriable after taxes.
19. Can I link my NRE/NRO account to UPI or Paytm?
Short Answer: Only NRO accounts currently support UPI.
Long Answer: Some Indian banks are enabling limited UPI access for NRE accounts, but generally, NRO accounts integrate better with UPI apps.
Long Answer: Some Indian banks are enabling limited UPI access for NRE accounts, but generally, NRO accounts integrate better with UPI apps.
20. What is the minimum balance for NRE/NRO accounts?
Short Answer: Usually ₹10,000 to ₹50,000.
Long Answer: Minimum balance depends on the bank and account type. Premium NRI accounts may have higher balance requirements.
Long Answer: Minimum balance depends on the bank and account type. Premium NRI accounts may have higher balance requirements.
21. Which account is better for fixed deposits?
Short Answer: NRE FD for tax-free returns.
Long Answer: NRE fixed deposits earn tax-free interest and are fully repatriable, making them ideal for Canadian NRIs seeking stable growth.
Long Answer: NRE fixed deposits earn tax-free interest and are fully repatriable, making them ideal for Canadian NRIs seeking stable growth.
22. Are there currency risks when transferring CAD to NRE accounts?
Short Answer: Yes, due to exchange rate fluctuations.
Long Answer: CAD-INR rates can vary, affecting final deposits. Using bank remittance services or forex platforms helps lock better rates.
Long Answer: CAD-INR rates can vary, affecting final deposits. Using bank remittance services or forex platforms helps lock better rates.
23. Can I get a loan in India against my NRE deposits?
Short Answer: Yes.
Long Answer: Many banks offer loans in India secured by NRE fixed deposits, which is a convenient option without breaking your investment.
Long Answer: Many banks offer loans in India secured by NRE fixed deposits, which is a convenient option without breaking your investment.
24. Are NRE and NRO accounts subject to Indian reporting requirements?
Short Answer: Yes.
Long Answer: Banks report high-value NRI transactions to the RBI and Income Tax Department to ensure compliance with FEMA and tax laws.
Long Answer: Banks report high-value NRI transactions to the RBI and Income Tax Department to ensure compliance with FEMA and tax laws.
25. Can Canadian banks transfer money directly to my Indian NRE account?
Short Answer: Yes, via SWIFT or partner tie-ups.
Long Answer: Most Canadian banks and platforms like Wise or Remitly support direct transfers to Indian NRE accounts in INR or USD.
Long Answer: Most Canadian banks and platforms like Wise or Remitly support direct transfers to Indian NRE accounts in INR or USD.
26. Which account helps with easier tax filing in India?
Short Answer: NRE account.
Long Answer: Since NRE income is tax-free in India, it simplifies ITR filing compared to NRO income which needs TDS adjustments.
Long Answer: Since NRE income is tax-free in India, it simplifies ITR filing compared to NRO income which needs TDS adjustments.
27. Which account earns better interest rates?
Short Answer: Usually both are similar.
Long Answer: Banks often offer equal interest rates on NRE and NRO savings accounts, but the NRE’s tax-free status makes its returns effectively higher.
Long Answer: Banks often offer equal interest rates on NRE and NRO savings accounts, but the NRE’s tax-free status makes its returns effectively higher.
28. Can I nominate a family member for my NRE/NRO account?
Short Answer: Yes.
Long Answer: NRIs can nominate resident or non-resident family members to receive the account balance in case of unforeseen events.
Long Answer: NRIs can nominate resident or non-resident family members to receive the account balance in case of unforeseen events.
29. Can I close my NRE/NRO account online?
Short Answer: Yes, with most banks.
Long Answer: Many banks allow digital closure through email requests and notarized documents, especially for customers residing abroad.
Long Answer: Many banks allow digital closure through email requests and notarized documents, especially for customers residing abroad.
30. What’s the best strategy for Canadian NRIs?
Short Answer: Use both accounts smartly.
Long Answer: Keep your foreign income in an NRE account for tax-free growth and manage Indian income via NRO. This helps in better tracking, taxation, and financial planning.
Long Answer: Keep your foreign income in an NRE account for tax-free growth and manage Indian income via NRO. This helps in better tracking, taxation, and financial planning.
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