As per the Foreign Exchange Management Act (FEMA) guidelines, it is illegal for NRIs to have domestic saving accounts in their name in India. It is mandatory that you convert all your savings to NRE or NRO account. Therefore, continuing to use the domestic savings account in the home country can attract hefty penalties. Opening an NRE or NRO account is, hence, a viable option for Non-Resident Indians. It can help NRIs in two ways. One, they can send the money they earn abroad to India at any point of time. Two, they can also retain their income from India (via any asset sale of rent etc) in the home country itself. Both NRE and NRO accounts are Indian rupee accounts. NRE account is used to transfer foreign earnings to India. Money from NRE accounts is freely repatriable i.e. both the principal amount and interest earned are freely and completely transferable. You should opt for NRE account if you want to hold or maintain your overseas earnings in Indian currency. Whereas, NRO is used to manage income earned in India. Funds from the NRO accounts can be repatriated post payment of applicable taxes with a limit of USD 1 million in a financial year. You should opt for NRO accounts if you want to save your earnings from India in Indian currency itself. These earnings could include rent, income, dividend, sale of property etc. Also under NRO accounts, interest earned on this account is taxed at the rate of 30% (plus surcharge) and other applicable taxes in India according to the ITA. In order to take the benefit of lower rates of tax as per double taxation avoidance agreement (DTAA) entered in by India, NRIs need to submit the Tax Residency Certificate issued by Tax Authorities of the country of his residence.