What is an NRO Account? Everything NRIs Need to Know
Disclaimer: This article is for general information/education and is not investment advice. The information is shared in good faith and for general informational purposes only. Ujjivan SFB does not make any representations or warranties regarding the accuracy, completeness, or reliability of the content.
June 29, 2026
An NRO account helps NRIs manage income earned in India such as rent, dividends and pension, among others. You can use this account to receive funds from various sources within India and maintain it in Indian Rupees.
This blog focuses on what an NRO account is, why NRIs need one, the transactions it allows and the rules that apply to repatriation and account conversion.
Why Do NRIs Need an NRO Account?
When you become an NRI, you cannot continue to use your resident savings account. You must update your residential status with the bank. Depending on the bank's process, you can either convert your existing resident account into an NRO account or close the resident account and open a new NRO account.
Depending on the banking needs, NRIs can open different types of NRO accounts:
1. NRO Savings Account
An NRO Savings Account helps you manage any income earned in India. Eligible funds are repatriable as per FEMA guidelines, and is capped up to USD 1 million per financial year. Fund transfers from NRO account to NRE (Non-Resident External) account also falls under the USD 1 million cap.
2. NRO Fixed Deposit
If you have idle funds or surplus income in India, you can open an NRO FD to earn higher interest for a fixed tenure.
3. NRO Recurring Deposit
If you prefer to save a fixed amount every month instead of investing a lump sum, you can open an NRO RD and build savings gradually while earning higher interest.
How to Convert a Resident Savings Account into an NRO Account?
Banks may follow different procedures to convert a resident savings account into an NRO account.
Common Steps Include:
Note: To know more on Ujjivan SFB specific account conversion details you can contact the bank.
Documents Required to Convert a Resident Savings Account to an NRO Account or Open a New NRO Account
Banks may require different documents depending on their policies. Banks generally require the following documents for account conversion or opening a new NRO account:
Note: Check the account specific documentation requirements with the bank before submitting the application.
Can Someone Else Operate an NRO Account in India on Behalf of an NRI?
Yes, an NRI can authorise another person in India to operate their NRO account through a Power of Attorney (POA).
A POA allows a trusted individual, such as a parent, spouse, sibling, or another relative, to carry out certain banking transactions on behalf of the account holder. This arrangement helps when you need someone in India to manage day-to-day banking requirements.
Depending on the bank's policies and applicable regulations, you may allow a POA holder to:
Banks may not allow POA holders to carry out certain transactions and may require instructions directly from the account holder. You should check the bank's specific POA guidelines before granting such authority.
What are the Repatriation Rules for an NRO Account?
Banks refer to the transfer of funds abroad from an NRO account as repatriation, and the rules governing such transfers are called repatriation rules. For funds held in an NRO account, the repatriation rules for the interest earned and the principal amount are different.
Can an NRO Account Be Used as a Foreign Salary Account?
An NRO account is not used as the primary salary account for income earned outside India. Employers usually credit salary earned abroad to a foreign bank account or where applicable, an NRE account.
However, you can remit funds from overseas earnings to an NRO account through normal banking channels if required, subject to terms and conditions. You can do this when you want to maintain funds in India for local expenses, investments, deposits, or other banking needs.
Since NRO and NRE accounts serve different purposes, you should choose the account based on the source of funds and how you intend to use the money in India.
Final Thoughts
For NRIs who continue to have financial interests in India, managing finances across two countries requires careful planning. An NRO account lets you manage your banking activities in India more efficiently. From receiving income to managing payments and supporting family members, it simplifies everyday banking needs and helps NRIs manage their finances in India more efficiently.
Disclaimer:
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