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₹/$Rupee Exit

Guide · Checked 8 August 2026

NRE, NRO and FCNR — which account holds what

An NRE account does not hold dollars. It holds rupees, and foreign currency is converted the moment it arrives. Only FCNR holds foreign currency. That one fact decides how much moving money between these accounts actually costs you.

The three accounts

What each one is actually for

Two of them are rupee accounts and one is not. Everything else on this page follows from that row.
 NRONREFCNR
Currency heldIndian rupeesIndian rupees. Foreign currency is converted on arrival.Foreign currency — dollars, pounds, euros and others. Nothing is converted.
What funds itIncome arising in India — rent, interest, dividends, pension, sale proceeds.Funds sent from abroad.Funds sent from abroad, held as a term deposit.
Taking money outCapped at USD 1,000,000 per financial year on capital-source funds, with Form 145 and Form 146 where required. Current income sits outside the cap.Freely repatriable, principal and interest, without that cap.Freely repatriable.
Indian tax on interestTaxable, and withheld at source.Exempt.Exempt.
Rupee exchange-rate riskYes — the balance is in rupees.Yes. This is the part people are surprised by.No, on the deposit itself — it stays in the currency you sent.

Count the conversions

Every time money crosses between rupees and a foreign currency, a rate is applied and your bank's margin is inside it. So the only question that decides the exchange-rate cost of a route is: how many times does it convert?

RouteConversionsWhat the rate costs you
NRO → your US account1The markup once, on the way out. This is what the checker prices.
NRO → NRE → your US account1Also once. The money was already rupees, so the NRE step converts nothing — no penalty and no saving on the rate.
NRO → NRE (and it stays there)0Nothing. Rupees on both sides, inside India. There is no rate for this tool to measure.
Your US account → NRE → back to your US account2The markup twice — dollars to rupees going in, rupees to dollars coming out — plus whatever the rupee did in between.

That last row is the reason this page exists. Believing an NRE account holds dollars makes the round trip look like moving your own money around at no cost. It is two conversions, at retail rates, on the whole amount — and neither of them is itemised anywhere, because both are inside a rate rather than shown as a fee.

Being fair to it

What routing through NRE genuinely does buy

It is a real and useful thing to do. It is just not an exchange-rate saving, and it is not a way around the cap.
Yes

Repatriation stops being a project

Once money is in an NRE account it is freely repatriable — principal and interest — without the annual cap and generally without Form 145 and Form 146 each time. Money that needed paperwork on every wire becomes money that does not.
No

It does not dodge the cap

The USD 1,000,000 per financial year limit is aggregate: what you move from NRO to NRE and what you send abroad count against the same allowance. The transfer itself still needs the tax paperwork and a FEMA declaration to the bank.
No

It does not cut the FX cost

Rupees are rupees. Moving them between two Indian accounts converts nothing, so the one conversion — and the one markup — still happens whenever the money finally leaves for a foreign currency.

Questions

The ones this page exists to answer

Does an NRE account hold dollars?

No. An NRE account is held in Indian rupees. Foreign currency sent to it is converted to rupees when it arrives, at your bank's rate. The account that holds foreign currency without converting it is FCNR, which is a term deposit in dollars, pounds, euros or another permitted currency. This is the single most common misunderstanding about these accounts, and it is an expensive one, because it makes moving money in and out again look free when it is not.

So what does it cost to send dollars to an NRE account and take them back later?

Two conversions, and therefore your bank's exchange-rate markup twice — once turning dollars into rupees on the way in, once turning rupees back into dollars on the way out. On top of that, the rupee moves in between, in whichever direction it moves. If the intention is to hold dollars in India and take dollars back out, an NRE account converts twice to end up where you started.

Is moving NRO to NRE and then abroad cheaper than sending straight from NRO?

Not in exchange-rate terms. Money in an NRO account is already rupees, so either way exactly one conversion happens — rupees to dollars — and it happens once. What routing through NRE changes is the paperwork afterwards, not the FX.

Does moving to NRE get around the USD 1 million limit?

No. The cap is aggregate: it covers what you move from NRO to NRE and what you remit abroad, together, in the same financial year. The transfer to NRE also needs the same tax paperwork — Form 145, Form 146 where required, and a FEMA declaration to the bank. What changes is what happens next, because balances in an NRE account are freely repatriable afterwards without that cap and generally without those forms.

Can I just put my Indian rental income into an NRE account?

An NRE account is for funds from abroad; income arising in India ordinarily belongs in an NRO account, which is why NRIs typically hold both. Moving money from NRO to NRE is the route between them, and it is a route with conditions rather than a free transfer. Whether a particular receipt may go where is a question for your Chartered Accountant, and it is worth asking before the money lands rather than afterwards.

Is the interest taxed differently?

Published guidance is that interest on NRE and FCNR balances is exempt from Indian income tax, while interest on an NRO account is taxable in India and tax is withheld at source. What rate applies to you, and what relief a double-taxation agreement might give, is a Chartered Accountant's determination — we state that the treatment differs, not what yours will be.

Moving money out of an NRO account and want the whole sequence — forms, documents, Form A2 and where the rate enters? That is the NRO repatriation guide.

One conversion or two, price the one in front of you

Whatever the route, each conversion is a rate quoted once with the margin already inside it. Put the amount and the rate you were quoted in and see what that leg is costing you, in dollars.
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