Short answer

A Non-Resident Indian (NRI) cannot open a regular savings bank account in their name in India, and can only either open a Non-Resident External Account (NRE) bank account or a Non-Resident Ordinary Account (NRO) bank account. Continuing to use the savings account in the home country can attract hefty penalties as per the Foreign Exchange Management Act (FEMA) guidelines under RBI.

The differences between an NRE and NRO bank account are as follows:

NRIs can invest in India through two routes: PIS and Non-PIS. For trading in Futures and Options (F&O), an NRO bank account should be linked to the trading and demat account. An NRE bank account can be used to open an NRE PIS account, and an NRO bank account can be used to open an NRO non-PIS account with Arrow.

NRIs can invest in India through two routes:

For trading in Futures and Options (F&O), an NRO bank account should be linked to the trading and demat account. An NRE bank account can be used to open an NRE PIS account, and an NRO bank account can be used to open an NRO non-PIS account with Arrow.

Notes

¹You can convert funds in your NRE account into foreign currency and transfer them back to your foreign account along with the interest earned. This ability of money to be moved from a foreign country to your home country is called repatriability. In your NRE bank account, you can repatriate both the principal and the interest earned. You can transfer foreign currency from your foreign bank account, which gets converted to INR when you deposit it into your NRE account.

²NRO has restricted repatriation, where you can repatriate principal and interest only up to $1 million per year.

Broker details

iRage Broking Services LLP (SEBI registration INZ000011262), product name Arrow. Registered office: Gift City, Gandhinagar.