SynopsisNRE and NRO accounts offer investment avenues for Non-Resident Indians in India. NRO accounts accept Indian earnings, while NRE accounts hold international funds. Interest on NRO deposits faces tax, unlike NRE accounts which are tax-free. NRE funds are fully repatriable, and NRO funds have a yearly repatriation limit. Major banks offer similar interest rates on both NRE and NRO fixed deposits.ET OnlineNRE vs NRO FD: SBI, HDFC, Axis, PNB ratesNRE (Non-Resident External) accounts and NRO (Non-Resident Ordinary) accounts are two prominent investment options for Non-Resident Indians (NRI), Overseas Citizens of India (OCIs) and Persons of Indian Origin (PIO) to invest in India. While they can invest and withdraw in FRE and FRO accounts in Indian rupees, the basic difference is that choice depends where the fund to invest has come from. Here's a look at how NRE and NRO accounts differ and the interest rates offered by major banks such as State bank of India (SBI), HDFC Bank, Punjab National Bank (PNB) and Axis Bank on their 5 to 10 years NRE and NRO fixed deposits (FDs).Also read: $17.4 billion flows into FCNR(B) deposits: Which bank offers the best 3-year FCNR(B) FD rate—SBI, PNB, HDFC Bank, ICICI Bank or Canara Bank?Difference between NRE and NRO accountWhile in NRO accounts, NRIs can invest their earnings from Indian sources, in NRE accounts, they can park their earnings from international sources. While interest on NRO accounts is subject to Tax Deducted at Source (TDS), interest earned from NRE accounts is tax-free. While NRO funds can be repatriated up to USD $1 million per year after taxes, NRE account funds are fully repatriable. While NRE FDs typically have a minimum tenure of one year and a maximum tenure of 10 years, NRO deposits have a minimum tenure of 7 days.NRE vs NRO FD interest ratesMost banks offer the same interest rates on similar tenures of NRE and NRO FDs. Here are the interest rates offered by leading banks such as SBI, PNB, HDFC Bank and Axis Bank on their 5-10 year NRE and NRO FDs. These rates are for deposits below Rs 3 crore.SBI offers an interest rate of 6.05% apiece on NRE and NRO fixed deposits with tenures of 5 years to 10 years.PNB offers an interest rate of 6% each on NRE and NRO fixed deposits with tenures of 5 years to 10 years.HDFC Bank offers an interest rate of 6.15% apiece on NRE and NRO fixed deposits with tenures of 5 years 1 day to 10 years.Axis Bank offers an interest rate of 6.50% each on NRE and NRO fixed deposits with tenures of 5 years to 10 years for deposits below Rs 3 crore.NRE vs NRO accounts: Key differencesFeatureNRE (Non-Resident External) AccountNRO (Non-Resident Ordinary) AccountPurposeUsed to park income earned outside India in Indian rupeesUsed to manage income earned in India, such as rent, pension, dividends or interestSource of fundsForeign earnings remitted from abroadIncome earned in India or funds transferred from abroadCurrencyMaintained in Indian Rupees (INR)Maintained in Indian Rupees (INR)Tax on interestInterest earned is tax-free in India (subject to applicable conditions)Interest earned is taxable in India and is subject to TDSRepatriationBoth principal and interest are fully repatriable without any limitFunds are repatriable up to USD 1 million per financial year, subject to payment of applicable taxes and RBI guidelinesPrimary useIdeal for maintaining overseas earnings and liquidity in IndiaSuitable for managing income generated from Indian sourcesIf you have any personal finance query, reach out to us at: asketwealth@timesinternet.in (Join our ETWealth WhatsApp channel for all the latest updates)...more