Opening an NRE fixed deposit from the USA.

In three steps. Open an NRE savings account with an Indian bank, usually online with your passport, visa or OCI card and US address proof. Send dollars from your own US bank account to that NRE account. Then book a fixed deposit from the NRE balance through the bank's net banking or app.

Most Indian banks that serve NRIs let you complete the whole process from the USA. Some verify you over a video call, some ask for copies of documents attested by a notary or an Indian consulate, and some ask you to visit a branch on your next trip. The bank decides, so check its NRI page before you start.

The order matters because an NRE deposit can only be funded with money that comes from outside India, or from another NRE or FCNR balance. That is why the usual route is to fund the NRE savings account first with a transfer from the USA, and to book the deposit from it once the rupees arrive.

This post walks through each step in the order you meet it: the account, the documents, sending the money, the tax in both countries, choosing a term, and what happens if you bring the money back to the USA or move back to India yourself.

An NRE fixed deposit is a rupee term deposit held by a non-resident Indian in a Non-Resident External account. It is funded with money earned abroad, pays a fixed rate for a fixed term, and both the principal and the interest can be moved back out of India freely. Indian banks set their own rates and terms.

NRE stands for Non-Resident External. The Reserve Bank of India allows non-residents to hold savings, current, recurring and fixed deposits in NRE form. The money in them has been converted from foreign currency into rupees, which is what makes it repatriable: India treats it as your foreign money parked in India, not as Indian income.

A fixed deposit locks a sum for a chosen term at the rate offered on the day you book it. Under RBI rules the minimum term for an NRE deposit is one year, and a deposit withdrawn before one year earns no interest. Banks choose the longest term they offer and publish their own rate card.

The deposit is in rupees, so its value in dollars moves with the exchange rate. That is the main difference from an FCNR deposit, which is covered further down, and the first thing to understand before you compare an Indian deposit rate with a US one.

Non-resident Indians and persons of Indian origin, including OCI cardholders, who live outside India. A person in the USA on a work visa, a green card holder or an Indian-origin US citizen generally qualifies. A US resident with no Indian origin generally does not. Each bank applies the RBI definition and asks for proof.

The test is residence under India's foreign exchange law, which looks at where you live and why, not only at how many days you spent in India. Someone who has moved to the USA for work or with the intention of staying is treated as resident outside India from the date they leave.

An NRE account can be held jointly with another non-resident, or with a resident close relative on a former-or-survivor basis, which is how many NRIs add a parent in India. The resident relative can operate the account under the bank's rules, but the money in it must still come from abroad.

If you held an ordinary resident savings account before you left India, tell the bank you have become a non-resident. It should be redesignated as an NRO account. Keeping a resident account after you move abroad is not allowed, and it can complicate the paperwork later.

Typically your passport, proof of your status abroad such as a US visa, green card or OCI card, proof of your US address, a recent photograph, and your PAN or Form 60. Banks also ask for a tax residency declaration. Some verify you by video call; others want documents attested before you post them.

The overseas address proof is often the item that slows people down. Banks generally accept a US driver's licence, a recent utility bill or a US bank statement, but they publish their own list. Check it before you start, so the application does not stall halfway through.

Your PAN, the Indian Permanent Account Number, is worth having even though some banks accept Form 60 without one. Indian deposits, investments and tax refunds all run on it, and a missing PAN can mean tax deducted at a higher rate on NRO income later.

Banks also ask for a FATCA and CRS self-declaration, where you state that you are a US tax resident and give your US taxpayer identification number. Indian banks report accounts of US persons to the Indian tax authority, which shares the information with the IRS. Your US reporting should match what the bank already reports.

Send dollars from a US bank account in your name to your own Indian NRE savings account through a regulated transfer service, then book the deposit from that balance. Compare providers on the rupees that arrive, not the advertised fee, and send a small test first so the account details and the timeline are confirmed.

On ComplyRemit, you add your Indian account under Send to yourself and mark it as an NRE account. Transfers to yourself go to a bank account, not a UPI ID, and every account is checked with the bank before its first payout, a check often called a penny drop. A wrong IFSC or a closed account shows up then, before any of your money is sent.

You fund each transfer from a US checking account in your own name, linked once through Plaid. The amount is converted at the mid-market exchange rate, the one Google shows, and the review screen shows what you send, the rate and the rupees that arrive before you confirm. Each transfer is confirmed with a six-digit code emailed to you.

Plan on a few business days. Collecting the money from your US bank takes one to three business days over ACH, and the rupees are then typically delivered within 48 hours. If you want to catch a rate a bank has advertised for a limited period, send early rather than on the last day.

Once the rupees are in the NRE savings account, most banks let you book the deposit in a few taps. Keep the transfer confirmations: they show the money came from abroad, which is exactly what an NRE deposit requires.

Generally no. An NRE deposit must be funded with money from outside India or from another NRE or FCNR balance. Rent, dividends, a pension or anything else earned in India belongs in an NRO account. Moving NRO money into an NRE account is only possible as a repatriation, within RBI limits and with the required tax paperwork.

The rule exists because NRE money is freely repatriable and NRO money is not. If Indian income could be moved into an NRE account freely, the annual cap on repatriating NRO balances would mean nothing, so banks check where each credit to an NRE account came from.

That is also why it pays to fund the right account from the start. Dollars you earned in the USA can be sent to an NRO account, but you give up easy repatriation and Indian tax-free interest for no benefit. For savings sent from the USA, the NRE account is almost always the one you want.

If you do hold NRO money you would like in an NRE deposit, the route is the same as sending it abroad: the bank will usually ask for Form 15CA and, above a threshold, a chartered accountant's certificate on Form 15CB. Our guide to NRE and NRO accounts covers the differences in more detail.

In India, yes, while you remain a non-resident: interest on NRE deposits is exempt from Indian income tax, so the bank deducts no tax at source. In the USA, no. A US tax resident reports worldwide income, so NRE interest belongs on your US return like interest from a US bank account.

The Indian exemption is the main reason NRE deposits are popular. It is also tied to your status: it applies to a person resident outside India under the foreign exchange rules. If you move back to India and become resident, the exemption on new interest stops, which is covered at the end of this post.

NRO fixed deposits are different. Their interest is taxable in India, the bank deducts tax at source, and you can often reduce the rate under the India-US tax treaty by giving the bank a tax residency certificate and the forms it asks for. You then report the same interest in the USA and can usually claim a foreign tax credit.

Because NRE interest carries no Indian tax, there is no Indian tax to credit against your US bill. That is the trade-off many people miss: an NRE deposit is tax-free in India, but on a US return it is ordinary taxable interest.

Generally yes, if you are a US tax resident, which most people living and working in the USA are. The IRS taxes worldwide income, so interest on an Indian deposit is reported in dollars on your federal return, usually on Schedule B, whether or not the money ever leaves India. This is general information, not tax advice.

The interest is converted into dollars at an exchange rate for the day it was credited, or at a yearly average where that is allowed, and reported with your other interest. Schedule B also asks whether you had a financial interest in or signature authority over a foreign account during the year, which an NRE account is.

Cumulative deposits deserve particular care. A deposit that adds interest to the principal and pays everything at maturity still earns interest every year, and the US treatment of that interest can differ from what the maturity date suggests. Ask a tax professional how your particular deposit should be reported before you book a long cumulative one.

Interest is not the only US question. A deposit that falls in rupee value and is converted back to dollars can produce a currency gain or loss, and moving money between your own accounts is not income at all. Keeping the bank's annual interest certificates and your transfer records makes each year's return straightforward.

Very likely. A US person must file an FBAR with FinCEN if the combined maximum value of all their foreign financial accounts exceeded $10,000 at any time during the year. NRE and NRO savings accounts and fixed deposits all count. Form 8938 may also apply, at higher thresholds, with your tax return.

The FBAR, FinCEN Form 114, is filed electronically through FinCEN's BSA E-Filing system, separately from your tax return. It is due in April, with an automatic extension to October. Each account is listed with its highest balance during the year, converted to dollars, so a fixed deposit and the savings account that funded it are two entries.

The threshold is on the total, not per account. Three accounts of $4,000 each add up to $12,000 and need an FBAR even though no single account is over $10,000. A joint account with a parent in India counts in full for each owner who is a US person.

Form 8938, Statement of Specified Foreign Financial Assets, is a separate IRS requirement that is filed with your return and has higher thresholds that depend on your filing status and where you live. The IRS publishes a side-by-side comparison of the two, linked in the sources below. The penalties for missing either can be large, so it is worth getting right.

It depends on where the money is going. An NRE deposit is in rupees, so you carry the rupee's exchange-rate risk but usually earn a higher rate. An FCNR (B) deposit stays in a foreign currency such as US dollars, removing that risk, usually at a lower rate. Both are repatriable and tax-free in India.

If the money will be spent in India, on a home, a parent's care or your own return, the exchange-rate risk of an NRE deposit matters less: you were going to convert to rupees anyway, and you have done it at the start. If the money is likely to come back to the USA, an FCNR deposit keeps it in dollars throughout.

The gap between the two rates roughly reflects what the market expects the rupee to do against the dollar over the term, so neither is free money. A higher rupee rate can be partly or wholly undone by the rupee weakening before you convert back.

Funding works differently too. An FCNR deposit is usually funded with a dollar wire to the Indian bank rather than a rupee transfer, and its terms run from one to five years under RBI rules. Ask the bank how it accepts foreign currency for FCNR deposits and what it charges for the inward remittance.

Match the term to when you will need the money, not only to the highest rate on the bank's card. Check the premature withdrawal penalty, whether interest is paid out or added to the deposit, what happens at maturity, and whether the bank offers a loan against the deposit so you need not break it early.

Breaking a deposit early usually costs part of the interest, and an NRE deposit closed before one year earns none at all. If you might need the money within a year or two, several smaller deposits with staggered maturities are often more flexible than one large one.

Banks offer payout deposits, which credit interest to your NRE savings account monthly or quarterly, and cumulative ones, which add it to the principal until maturity. A payout deposit gives you regular income in India; a cumulative one compounds. As covered above, the US reporting can differ between the two.

Look at the maturity instruction before you book. Many deposits renew automatically for the same term at whatever rate applies on the day, which may be lower. Add a nominee as well: it makes it much simpler for your family to claim the deposit if something happens to you.

Twice: when you convert dollars to rupees to fund it, and over the term, as the rupee moves against the dollar. You cannot control the second, but you can control the first. A provider that converts below the mid-market rate takes a cut that comes straight out of the deposit before it earns anything.

A worked example with a hypothetical provider: say the mid-market rate is 88 rupees to the dollar and the provider converts at 87.25, three quarters of a rupee lower, while advertising zero fees. On $20,000 that is 15,000 rupees that never reach your account, about 0.85% of the money, gone before the deposit has started.

Put that next to a deposit's annual interest and the margin can wipe out several weeks of it. On a one-year deposit, the share of the year's return lost on the way in is significant.

ComplyRemit converts at the mid-market exchange rate, with no hidden margin in the rate, and the review screen shows the rupees your NRE account will receive before you confirm. Rates on websites, including ours, are indicative because exchange rates move constantly. The figure that counts is the one on the review screen, just before you confirm.

Your limit depends on how far you have verified, and it is shown under the amount field before you send. Adding your Social Security number raises it in about two minutes. An enhanced review can raise it further, up to $50,000 per transfer, and a person usually decides within about two business days.

Daily and weekly limits also apply, and the amount screen tells you how much is left and when it resets before anything leaves your bank. For a large deposit, plan the transfers around those limits, or book several deposits as the money arrives rather than waiting to book one.

The enhanced review asks for a recent pay stub and a bank statement from the last ten days, and larger requests can also ask where your wealth comes from. Approval is not guaranteed; if a review is not approved, your account keeps working at the limit you already have.

Indian rules do not cap how much of your own money a non-resident can bring into an NRE account, and US law does not cap how much you can send abroad. Sending in stages because that is how you plan to invest is normal. Breaking one amount into small pieces purely to stay under a reporting threshold is a different thing, and regulated providers are required to look for it.

Yes. The principal and interest of an NRE deposit are freely repatriable under RBI rules, with no annual cap. When the deposit matures, or when you close it, the money returns to your NRE savings account, and your Indian bank can send it to your US account. The bank sets its own exchange rate and fees.

This is the main practical difference from an NRO deposit, whose money can be sent abroad only up to an annual limit, usually with Form 15CA and a chartered accountant's certificate. With NRE money the bank generally needs only your instruction and the US account details.

The conversion back to dollars deserves the same scrutiny as the one on the way in. Ask the bank what rate it uses for outward remittances and what it charges, and compare it with the mid-market rate on the day. On a large maturity the difference can be meaningful.

Keep the paper trail: the inward transfer confirmations, the deposit receipts and the bank's interest certificates. Together they show that the money came from abroad, earned interest in India and went back, which answers most questions a bank or a tax office might ask.

Your NRE accounts must be redesignated as resident accounts once you return to live in India, but RBI rules allow NRE term deposits to run to maturity at the contracted rate. The Indian tax exemption on the interest is tied to non-resident status, so ask a chartered accountant how it applies after your return.

Tell your bank when you return. It will convert your NRE savings account to a resident account, and you can usually move NRE balances into a Resident Foreign Currency (RFC) account if you want to keep them in foreign currency. FCNR deposits can likewise continue until maturity.

The year you return is often a year of mixed tax status in both countries. India may treat you as Resident but Not Ordinarily Resident (RNOR) for a period, which changes how some foreign income is taxed, and the USA may still treat you as a resident for part of the year. Our guide to RNOR status explains how the Indian test works.

If a return is likely in the next few years, it is worth choosing deposit terms that mature around it, so you are not left breaking deposits or juggling status changes mid-term. Plan the deposits around the likely end date as well as the start, and the move back becomes a matter of paperwork rather than penalties.