Do NRIs Need to Have an NRE/NRO Account to Send Money to India?

As an NRI, do I need an NRE/NRO account to send money to India?

Do NRIs need to convert resident savings account to NRO NRE accountCan NRI hold a savings account in India?

Am I required to convert my resident savings account to NRI bank account once I move abroad?

In this post, I am going to answer these questions around what’s wrong with holding your savings account in India once your status changes to NRI.

Let’s dive right in.

Once you have stayed out of India for more than 182 days during the preceding financial year, your status changes from a Resident Indian to an NRI [Non-Resident Indian]. That’s when you lose certain privileges that a resident Indian has, and holding domestic savings bank account back in India is one of them.

Once you become an NRI, you can no longer keep a resident bank account and are required by law to convert your resident savings account to NRO or NRE.

It is your responsibility to inform your bank to convert your savings account to NRO account. Chances are, you didn’t even know such a requirement existed to change your resident domestic savings bank account to one of the NRI accounts after you have been outside India for more than six months.

Can you send money to India without an NRI account?

“But I send money to my savings account without any issues” is what you are thinking.

Well, once you become an NRI and do not convert your Indian saving account to an NRI category (NRO/NRE), technically nothing is stopping you from making the transfer. You can initiate the transfer using your preferred channel, and the money WILL reach your bank account in India.

BUT, the problem is…

In the eye’s of the government of India, that’s not legal.

Let me explain.

The rules, interest rates and legalities that apply to NRI accounts are different to the bank account you hold as a resident Indian. You need to maintain an account as per your residency status.

If you come under the radar leading to an inquiry against you, you cannot just say “nobody told me this” and will have to face the consequences.

Related: The ultimate guide to sending money to India

Is it illegal if you don’t convert Savings account to NRI account?


As I already mentioned, the moment your status changes to NRI, many rules and regulations change for you from a personal finance point of view as compared to when you were a resident Indian.

As per FEMA (Foreign Exchange Management Act, 1999) regulations, it is illegal for an NRI to hold resident savings account in India.

If authorities notice, you could face a penalty for not converting to NRO account, and operating a savings account in India with NRI status (stayed out of India for more than 182 days).

Related: When is the best time to send money to India?

Unaware that holding a savings account is illegal for NRIs as per Indian laws, most people who have travelled to the UK for work ignore this. They continue with resident savings accounts to send money to India from overseas even after the six month period expires thinking it doesn’t matter.

That’s a mistake!

Even I didn’t know about this requirement at the start.

However, as soon as I came to know of this law, I straight away switched my Indian savings account to NRO account to deposit any earnings in India.

NRO or NRE – which account is right for you?

This question is for a separate post. But I will try to explain it very briefly here and then do an elaborate post on whether to choose NRO or NRE account later.

In plain terms, NRO account is to deposit your INR income in India. If you have any income in India like from rental property, the stock market, dividend or any other investments, you need an NRO account.

Any payments towards insurance premiums, EMIs for loans you took while in India should also be paid using NRO account. You can send money from UK to India to an NRO account without any issues as long as all taxes due are paid in the UK.

NRE account is only to deposit earnings from employment overseas.

With an NRO account, you can repatriate up to an equivalent of 1 Million USD per year from India to your resident country abroad, given you fulfil the required formalities. Like, you need to get a certification from a CA for taxes paid on your income in India.

For NRIs with an NRE account, there is no such limit.

In addition to an NRO account, I hold a separate NRE account that allows me to transfer my overseas income from UK to India with an option to repatriate the money back to the UK without any restrictions, if I may need to in the future.

I will do a detailed post here about the differences between NRO and NRE accounts.

What next?

Take action!

Most of my friends who I spoke to about this, didn’t know there was any such requirement after moving abroad. They never bothered converting resident savings to NRO/NRE account.

When I told them about this being illegal, many of them took action right away not to end up getting penalised in the future. That’s when I realised a wider audience should be made aware of the law, and I wrote this post (you can do you part by sharing it!).

Convert your savings account to NRO account now to avoid getting penalised

I can’t emphasise this enough:

If you are an NRI residing outside India and operating resident savings account back home, I recommend you convert your home account to NRO account right now.

To convert savings account to NRO account, contact your bank to make the changes. The bank will change your status on the account, and your account number stays the same.

You can also close the savings account with your current bank and open a new NRO account with a different bank in case you decide to change your bank (in which case you will have a new account number for your NRO account).

To open a new NRE account, you can contact the bank you want to open an account with by calling them, or you can do it online. Most of the banks have online application portals which you can access for more details on the process.

Over to you!

I hope it’s now clear that you need to convert your resident savings account to NRE or NRO account to satisfy Indian law for NRIs.

If you have any queries or suggestions to add to this topic, please do write in the comments section below.

And if you found this post helpful, again don’t forget to share this with your friends, family members and anyone you think this information could help.

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2 Responses

  1. KIRTI SHETTY says:

    I came to USA ,post marriage in april 2015. but i have still not converted my saving account into NRO account.I have not transferred any funds from USA .
    but am planning to go to india by this year end and will get the saving account converted to NRO. But my question is, in the bank form i need to inform them that my status changed in end of 2015,that is almost 2 years back. Will that raise any query from the authorities.
    Currently am using the saving account only for monthly sip payments and receive dividend and interest income which is nominal. Am also filing IT return with NRI status , though i do not have any taxable income in india except for interest ,below taxable limit.

    • Λ M Λ N says:

      Hello Kirti, thanks for dropping by.

      What I would recommend is to check with an official when you are in the bank to seek their advice. If I were you, I would just put the true information in there. There shouldn’t be any major issues but I again recommend to convert the account as soon as you can. Living outside India and depositing income from India into a resident account is not OK with the taxman.

      If possible, do come back and update your experience here based on which I will update the article. Even I need to sort out the status on one of my accounts and I will update that information here.

      All the best,

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