I still remember the panic.
It was 2010. I had just landed in the US on my H1B. My dad had passed away a few years earlier. My mom was alone in India. She needed money urgently for a medical expense.
And I had no way to transfer funds quickly.
No NRI account. No setup. Just stress.
That experience taught me a lesson I share with every NRI in our community. Open your NRI account BEFORE you need it. Not after. The process takes time. The paperwork can be frustrating. But once it is done, you have a financial lifeline to India.
This guide covers everything. Which account to choose. Which bank to pick. How to actually get it done from the US. No fluff. Just the practical steps that work.
What This Guide Covers
- The three types of NRI accounts and which one you actually need
- Bank comparison with real interest rates and minimum balance requirements
- Step by step account opening process from the US
- Documents you need and how to get them attested
- Common mistakes NRIs make and how to avoid them
- Tax implications in both India and the US
Understanding NRI Accounts: The Basics
First things first. You cannot use a regular Indian savings account once you become an NRI. RBI rules. Period.
The moment you move abroad for work or stay outside India for more than 182 days in a financial year, you need to convert your existing accounts or open new NRI accounts. If you are unsure about your residency status, check out our guide on the 182 day rule for NRIs.
I have seen so many people in our WhatsApp groups who kept their old accounts running. Some got away with it for years. Others faced issues when they tried to buy property or invest. The bank flagged their account. Paperwork nightmares followed.
Do not be that person. Get the right account from the start.
The Three Types of NRI Accounts
There are three main types. Each serves a different purpose. Understanding this saves you a lot of confusion later.
1. NRE Account (Non Resident External)
This is for your foreign earnings. Money you earn in the US goes here.
Key features:
- Deposits only in foreign currency (converted to INR)
- Interest earned is completely tax free in India
- Fully repatriable. Both principal and interest can go back abroad
- Joint account only with another NRI or close relative
When I was in the US, this was my primary account. Every month, I would send money home. It went straight to my NRE account. No tax hassle in India. Clean and simple.
For a deeper understanding of NRE accounts, read our complete guide on what is an NRE account.
2. NRO Account (Non Resident Ordinary)
This is for your Indian income. Rent from property. Dividends. Pension. Any money you earn in India goes here.
Key features:
- Can deposit both INR and foreign currency
- Interest is taxable in India at 30% (TDS deducted)
- Limited repatriation. Up to USD 1 million per financial year
- Joint account possible with a resident Indian
My mom lives in a house I own in Bangalore. The rent goes into my NRO account. Simple arrangement. The tenant pays. I can access the funds when needed.
If you are earning rental income in India, you will also want to understand the tax implications for NRIs.
3. FCNR Account (Foreign Currency Non Resident)
This is for parking foreign currency without converting to rupees. Think of it like a fixed deposit in USD, GBP, EUR, or other currencies.
Key features:
- Only term deposits (no savings account option)
- Minimum tenure of 1 year, maximum 5 years
- No currency risk. You get back the same currency
- Interest is tax free in India
Good option if you are unsure about the rupee and want to protect your dollars.
NRE vs NRO vs FCNR: Quick Comparison
Here is a side by side look. Print this out or save it. You will need it.
| Feature | NRE Account | NRO Account | FCNR Account |
|---|---|---|---|
| Purpose | Foreign income | Indian income | Foreign currency deposit |
| Currency | INR (converted) | INR | Foreign currency |
| Tax in India | Tax free | 30% TDS | Tax free |
| Repatriation | Fully repatriable | Up to $1M per year | Fully repatriable |
| Account Type | Savings, FD, RD | Savings, FD, RD | Term deposit only |
| Joint Holder | NRI or PIO only | Resident allowed | NRI or PIO only |
| Currency Risk | Yes (INR fluctuation) | Yes (INR fluctuation) | No risk |
Which Account Do You Actually Need?
This is the question I get asked most often in our BacktoIndia community. My answer is usually: get both NRE and NRO.
Get an NRE account if:
- You want to send money from the US to India regularly
- You want tax free interest in India
- You might need to bring the money back to the US someday
- You are supporting family in India
Get an NRO account if:
- You have rental income from Indian property
- You receive pension or dividends in India
- You want to convert your old resident account
- You sold property in India and received sale proceeds
Most NRIs in our community have both. The NRE for sending money. The NRO for Indian income. It just works better that way.
Need to convert between these accounts later? Here is our guide on how to convert NRE to NRO account.
Best Banks for NRI Accounts
I have been tracking this for years. Banks keep changing their rates and requirements. Here is the current picture based on what works for US based NRIs.
| Bank | NRE Savings Interest | Min Balance (NRE) | Online Opening |
|---|---|---|---|
| ICICI Bank | 3% to 3.5% | Rs 25,000 | Yes. Paperless |
| HDFC Bank | 3% to 3.5% | Rs 10,000 (Urban) | Yes |
| SBI | 2.7% | Rs 1 Lakh (Metro) | Yes. SBNRI App |
| Axis Bank | 3% to 3.5% | Rs 25,000 | Yes |
| IDFC First | 3% to 6% | Rs 10,000 | Yes |
| DBS Bank | 3.5% to 7% | Rs 1 Lakh | Yes |
My Personal Experience
I have used ICICI and HDFC. Both work well for US based NRIs. ICICI has better online account opening. HDFC has more branches if you need in person help in India. SBI is solid if you already have a relationship with them. The minimum balance at SBI is high for metro areas though.
Here is the thing I always tell people in our community. Pick a bank with a US presence or at least good NRI customer service. When something goes wrong at 2 AM your time, you want someone who can help.
For detailed bank comparisons, check out our NRI banking comparison guide.
Want to know where SBI branches are located in the US? We have a complete list of SBI branches in USA.
Step by Step: Opening an NRI Account from the US
The process has gotten much easier over the years. Many banks now offer online applications. But there are still some quirks you should know about.
Step 1: Gather Your Documents
Before you start anything, get these ready:
- Valid Indian passport (not expired)
- Valid US visa (H1B, L1, Green Card, etc.)
- PAN card (apply online if you do not have one)
- US address proof (utility bill, bank statement, driver license)
- Indian address proof (if you have property or family address)
- Passport size photographs
- SSN or ITIN for FATCA compliance
Pro tip from our community: Keep color scans of everything in a Google Drive folder. You will need them multiple times.
Do not have a PAN card? Here is our step by step guide on how to apply for PAN card as an NRI.
Step 2: Choose Your Bank and Account Type
Based on the comparison above, pick your bank. Most US NRIs go with ICICI, HDFC, or SBI. All three have decent NRI services.
Decide if you want NRE, NRO, or both. My recommendation: open both together. Same paperwork. Less hassle.
Step 3: Fill the Online Application
Most major banks now offer online applications for US based NRIs:
- ICICI: Paperless account opening. Fully digital
- HDFC: Online form with document upload
- SBI: SBNRI app or website
- Axis: RemitMoney platform
Select United States as your country of residence. Fill in all required fields. Upload your documents as per specifications. Accept the terms and conditions.
For ICICI specifically, check out our guide on ICICI Bank NRE account review.
Step 4: Document Attestation
Here is where it gets slightly tricky. Your documents need attestation. Options include:
- Indian Embassy or Consulate in the US
- Overseas branch of an Indian bank
- Notary Public in the US
- Correspondent bank with Indian presence
Good news: ICICI now offers completely paperless account opening for US NRIs. No physical attestation needed. Other banks are catching up but not quite there yet.
Step 5: Submit and Wait
Submit your application. If physical documents are required, mail them to the bank’s NRI processing center.
Processing time varies:
| Method | Timeline |
|---|---|
| ICICI paperless | 3 to 5 working days |
| HDFC online | 5 to 7 working days |
| SBI | 7 to 10 working days |
| Physical documents | 2 to 3 weeks |
Step 6: Activate and Start Using
Once approved, you will receive your account number, debit card, and internet banking credentials. Activate everything. Set up mobile banking. Link your US bank for transfers.
Make a small test transfer first. Always. I have seen people send large amounts before testing and then panic when something goes wrong.
Common Mistakes NRIs Make (And How to Avoid Them)
After helping thousands of NRIs in our community, I have seen every mistake possible. Here are the big ones:
Mistake 1: Not converting old accounts
If you had a resident account before leaving India, you need to convert it to NRO. Many people skip this. It works until it does not. The bank can freeze your account if they discover your NRI status. Get it converted. It is a simple form.
Mistake 2: Wrong account for wrong purpose
Do not deposit Indian income in NRE account. Do not expect full repatriation from NRO. Use the right account for the right money source. The rules are there for FEMA compliance.
Mistake 3: Ignoring minimum balance requirements
Banks charge hefty penalties for not maintaining minimum balance. SBI metro branches need Rs 1 lakh. HDFC needs Rs 10,000 in urban areas. Know your bank’s requirement. Set up auto alerts.
Mistake 4: Not updating KYC
Your passport expires. Your visa changes. Your address changes. Update your bank. NRI accounts need periodic KYC updates. An outdated KYC can freeze your account at the worst time.
Mistake 5: Forgetting about US tax implications
NRE interest is tax free in India. But you are a US tax resident. You must report worldwide income to the IRS. This includes interest from Indian accounts. Also remember FBAR reporting if your Indian accounts exceed $10,000 at any point.
We have a detailed guide on FBAR filing requirements for NRIs that you should bookmark.
Tax Implications: India and US
This is where many NRIs get confused. Let me break it down simply.
In India
| Account Type | Tax Treatment |
|---|---|
| NRE savings interest | Tax free |
| NRE FD interest | Tax free |
| FCNR interest | Tax free |
| NRO interest | 30% TDS deducted |
You can claim the NRO TDS back if your total Indian income is below taxable limits. File an ITR to get the refund. Here is our complete guide on ITR for NRIs.
In the US
- All foreign account interest is taxable income
- Report on Schedule B of Form 1040
- FBAR required if total foreign accounts exceed $10,000
- Form 8938 may apply for higher thresholds
- DTAA helps avoid double taxation. Claim credit for Indian taxes paid
For more on the Double Tax Avoidance Agreement, read our DTAA guide for NRIs.
This is not tax advice. I am not a tax professional. But I have been through this myself. And I strongly recommend getting a CPA who understands NRI taxation. It is worth every dollar.
Setting Up a Mandate Holder or Power of Attorney
Here is a practical tip from experience. Appoint someone in India as a mandate holder on your account.
When my mom needed emergency funds, having her as a mandate holder on my NRE account saved the day. She could walk into the branch and withdraw cash. No international calls. No delays.
A mandate holder is different from a joint account holder. They can operate the account on your behalf. But the account remains yours. You control the limits and permissions.
Most banks allow you to add a mandate holder during account opening. Use this feature. Trust me.
For more complex situations, you might need a General Power of Attorney for NRIs.
Frequently Asked Questions
Can I open an NRI account if I do not have PAN card?
Yes, but with limitations. You can submit Form 60 instead. However, TDS will be higher at 30% on any applicable income. Better to get a PAN card first. You can apply online through NSDL or UTIITSL.
How long does it take to open an NRI account from the US?
Paperless options like ICICI take 3 to 5 days. Traditional process with physical documents takes 2 to 3 weeks. Start early. Do not wait until you urgently need the account.
Can OCI card holders open NRI accounts?
Yes. PIOs (Person of Indian Origin) and OCI card holders can open NRE and NRO accounts. Same eligibility as NRIs. You will need your OCI card as additional documentation. Learn more about OCI card benefits.
What happens to my NRI account when I move back to India?
Once you become a resident again, NRE accounts must be converted to resident accounts or RFC (Resident Foreign Currency) accounts. NRO accounts become regular savings accounts. This conversion must happen within a reasonable time after returning.
Planning your return? Check out our return to India checklist.
Can I have NRI accounts in multiple banks?
Yes. There is no limit on the number of NRE or NRO accounts you can have. Many NRIs maintain accounts with multiple banks for different purposes or to take advantage of different FD rates.
Is there a limit on how much I can transfer to my NRE account?
No upper limit from RBI. You can transfer as much as you want to your NRE account. However, your US bank and the remittance service may have their own limits per transaction. Also be mindful of any reporting requirements in the US for large transfers.
Can I use my NRI account to invest in Indian stocks?
Yes, but you need a PIS (Portfolio Investment Scheme) account. This is a permission from RBI routed through a designated bank. You can then open a demat and trading account to invest in the Indian stock market.
For investment options, explore our guide on best investment options for NRIs.
Your NRI Account Opening Checklist
Print this. Check off as you go.
- [ ] Decide on account type (NRE, NRO, or both)
- [ ] Choose your bank
- [ ] Gather all required documents
- [ ] Create scanned copies in PDF format
- [ ] Get PAN card if not already done
- [ ] Fill online application form
- [ ] Upload documents as per bank specifications
- [ ] Get documents attested if required
- [ ] Submit application
- [ ] Track application status
- [ ] Receive and activate account
- [ ] Set up internet and mobile banking
- [ ] Add mandate holder if needed
- [ ] Make a test transfer
- [ ] Note down FBAR reporting requirements
Wrapping Up
Opening an NRI account from the US is not rocket science. But it does require some planning and patience. The key is to start early. Gather your documents. Pick the right bank. And do not wait for an emergency to force your hand.
I have been through this journey myself. I know the stress of managing finances across two countries. I know the relief of having everything set up properly.
If you are planning to return to India someday, having these accounts in place is even more important. The transition becomes much smoother when your banking infrastructure is already there. Read our comprehensive guide on how to plan your move back to India.
Join the Community
Have questions? Stuck somewhere in the process?
Join our WhatsApp community at backtoindia.com/groups. Over 20,000 NRIs helping each other with real, lived experience. It is free and volunteer run.
We have city specific groups too. Bangalore, Hyderabad, Chennai, Mumbai, Delhi. Whatever your destination, there is someone who has been through it and can help.
See you there.
Mani Karthik Founder, BacktoIndia.com
Related Resources on BacktoIndia.com
- Best NRE Savings Accounts for NRIs
- What is an NRE Account and Why is it Important
- How to Open an SBI NRE Account
- FBAR Filing Guide for NRIs
- ITR for NRIs: Complete Guide
- Return to India Checklist
- SBI Branches in USA
- ICICI Bank Branches in USA
- Best Banks for NRIs
- NRI Account Overview
Sources
- Reserve Bank of India (RBI) – rbi.org.in
- ICICI Bank NRI Banking – icicibank.com/nri-banking
- HDFC Bank NRI Banking – hdfcbank.com/nri-banking
- SBI NRI Services – sbi.co.in/web/nri
- Axis Bank NRI Services – axisbank.com/nri-banking
- FEMA Guidelines – RBI FEMA Notifications
- IRS FBAR Requirements – irs.gov/fbar
Disclaimer: This article is for informational purposes only and should not be considered financial, tax, or legal advice. Banking regulations and interest rates change frequently. Please verify current information with the respective banks and consult qualified professionals for advice specific to your situation.
Leave a Reply