Reasons why you should open an NRO Account

When you get career opportunities abroad or plan to move outside India for education, you will be considered as a Non-Resident Indian (NRI) after you stay out of India for the required number of days. Often your employer may offer you a promotion and employ you to a post outside India. In that case, too, you will be considered as an NRI after a number of days.

Once you achieve NRI status, the way you manage your banking and financial affairs in India will no longer remain the same. There are a certain set of rules when it comes to bank accounts for NRIs. For example, you cannot hold a resident savings bank account when you’re an NRI. You will require an NRI account for banking in India. You may ask why you require a bank account in India when you move abroad? The simple answer is that you need a native bank account in order to manage your assets in India. Your family or relative may be staying in India, and would need an account to receive income from an Indian source like rent from property, dividend payout from shares and investments etc.

This is where NRE and NRO accounts come in. These accounts have been created so that NRIs can maintain finances in India even when staying abroad. So, if you’re looking to move abroad and want to continue maintaining your finances in India, the first thing you must do is open an NRO or Non-Resident Ordinary account.

Benefits of an NRO Account

An NRO account is a basic account used by NRIs for their Indian transactions. If you already have an existing savings account and are going to be an NRI, then the bank will convert your existing account to an NRO account. An NRO account allows you to carry out transactions in India and is maintained in INR denomination.

Let us look at a few benefits of an NRO account:

  • The number one benefit of an NRO account is that you can deposit your existing savings in this account before moving abroad. Before leaving, you can ask your bank to convert your existing account into an NRO account and your existing savings will automatically be transferred to your new NRO account.
  • Additionally, you may have other sources of income based in India, like rented property, earnings from stocks etc. This additional Indian income can be deposited in your NRO account.
  • If you wish to invest in the Indian stock market or mutual funds in India, you can easily do so using your NRO account.
  • You can transfer funds from an NRE (Non-Resident External) account into this account.
  • You can also transfer funds from overseas to your NRO account. Do note, however, that you cannot transfer funds from your NRO account outside /India, that is the funds are not repatriable.
  • You may also open an NRO account jointly with an Indian resident on a ‘former or survivor’ basis.
  • If you wish for someone in India to manage your NRO account, then you can assign Power of Attorney to an Indian resident. Thus, they can manage the NRO account, issue cheques, withdraw money, and perform other banking tasks on your behalf.
  • Yet another advantage of an NRO account is the loan benefit. If you have an NRO Fixed Deposit account, you can get a loan up to 90% of your deposit at attractive interest rates.


Thus, there are many benefits of an NRO account for NRIs. It becomes highly useful for NRIs who have extra avenues of income within India. When you no longer can operate a savings account in India as an NRI, you will need an account to park and manage your Indian earnings. An NRO account comes in handy in this regard.

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