How to transfer money from overseas to a NRE account?

John sent in the following email yesterday, and I thought this was a good topic for a post.

Hi Manshu,

I have opened NRE account but still not clear on transfer of money to NRE. If i want to transfer money to NRE account from overseas, will it transfer in foreign currency or it first gets converted into INR and then transferred to NRE account.

What is best, transferring money from local overseas bank or transferring through eRemit or Western Union.

Also is it good idea to transfer the local currency into USD and then transfer into NRE or can we transfer the local currency directly in USD into NRE account.


This is a common question because there is in fact no link between an international bank, say a Bank of America and a NRE account opened with an Indian bank, and once you open a NRE account, it isn’t intuitive what the next step should be. The two accounts you now own are two distinct entities with no link to each other, and you need to use a third service to link the two and fund your NRE account.

A lot of Indian banks have their own money transfer service, and you can use that to fund your NRE account or use a third party service like Xoom.

What is the best way to transfer money to India?

I would imagine that the answer to this question depends on which country you are transferring money from, and while I don’t know about other countries, I can speak with some confidence as far as the US is concerned. Using Western Union or any other wire exchange service usually costs a lot more than a money transfer service like ICICI’s Money2India or Xoom. I have used Money2India for a very long time myself till I discovered Xoom, which is perhaps the best money transfer service (for India) that exists today. It is quick, has low fees, gives you a good exchange rate, and is transparent with the exchange rate you will get as well as what status your transfer is in.

If Xoom operates in your country then I suggest you give it a try, if not, then try one of the other services that

If you are overseas then transferring money from your resident country to your NRE account is the best bet.

A little background on the NRE account now. One of the key features of the NRE account is that the money in the NRE account is freely repatriable which means that it can be sent out of the country any time and there is no upper limit on it. This is different from other accounts like the NRO account which has a clearly defined limit, and in general the tendency of the government and RBI is to keep a close watch on foreign exchange going out of the country, and don’t allow it so easily.

The second important thing about this type of account is that the interest is completely tax free, and this is also different from any other account type.

In this light, it is easy to see that the ways you can fund your NRE account is limited. You need to use foreign currency to fund this account, and the easiest way to do that is to remit the money from your host country to India. If you are already in India and have foreign currency with you then you can also use that to fund your NRE account.

You can’t deposit INR in a NRE account fund it so the option to convert foreign currency to INR doesn’t really exist, and if your foreign currency is not one that is freely convertible then you need to first convert it in a freely convertible currency, and then deposit that in your NRE account.

Please ask any questions that I may have missed addressing in the post in the comments, and I’ll answer them.

31 thoughts on “How to transfer money from overseas to a NRE account?

  1. On top of above, wire transfer direct to your NRE a/c is best option I have found. Your relationship Manager can help you here.
    You can get very good deal at very less margin (close to 40 paise margin) on the market exchange rate. Of course you can’t expect this on few thousand $. Need to be bigger amount to get preferential rates.
    Its always good and safe to park money in International bank (like SC or HSBC) NRE as you can use the NRE a/c same as yoru saving a/c to spend money in India (you get debit card and check book) and at the same time enjoy the high and tax free interest rates for NRE a/c.
    Big thing is that it eliminates the hassle of going to all long govt. bull**** formalities to take your own money back to your country which is boon.

  2. One more thing, I am not sure what is the limit to send money through Xoom or similar platform. I tested Xoom (!amount) to see what it has to offer (without log in) and I cannot enter over $3000 via online transfer (“This amount exceeds the maximum transaction limit”) while for wire transfer your limit will be usually very high which is govern by the limit set by your host country.

    1. if you have INR in NRE a/c than you can do the wire transfer directly like you do interbank transfer. If you have INR in NRO a/c the.n you need to get the certificate from CA (filling some form and he will endorse it) and then ask bank to transfer the fund. Basically if you have INR in NRO than you need to pay tax on it and the only you can take your money out of India. Though there will be per day limit on wire transfer.
      In both case You can either convert the INR to USD or GBP in India and then send that to your bank in USA or UK. Alternate you can send INR to USA or UK and your bank there will do the conversion based on their prevailing rate which you don’t have handle on it. Better do it in India with your RM so you know what you will get in oversea a/c.

      Manshu, correct me if I am wrong or would like to add anything more.


      1. The form that u need to submit is CA certified 15 CA/CB that would allow you to transfer funds from NRO account directly to overseas. In fact, you can also transfer funds upto $ 1 mn in a FY from your NRO Account to your NRE Account by giving an undertaking to the bank and then transfer funds overseas which I think is really cool.

  3. Manshu,
    In comparison to xoom, westernunion and indusremit gives a much better fixed rate USD to INR. Only thing is that you have to wait 3/4 days for money to be transferred. I have been using indusremit for long time and now switched to westernunion. see below link which gives the realtime transfer rate.

  4. Hi,

    It’s common knowledge that FD interest in NRE accounts is tax free and interest in FDs in NRO account is taxed.

    Is anyone aware of tax treatment of interest amount if the funds (including the tax free interest) are transferred from an NRE to an NRO account?


    1. When you transfer money from NRE to NRO account, the interest on this money in NRO account becomes taxable, notwithstanding the fact that the money was transferred from NRE account.

  5. Great Post Manshu! Thanks! I would like to add that if the person is from US and has an account with wells fargo bank they offer some real inexpensive and competitive rates for transfer and its really fast ( next day almost). They have a limit on the amount though (5000 USD per month or something) . Next comes indusfastremit which is excellent too. Also tax-free on NRE is only w.r.t taxes in INdia right? At least for US residents , they are required to declare this income as additional foreign income and pay tax based on 1099 that is received. Correct me if I am wrong please.

  6. Hey Guys, for everyone who wants to send money abroad I use TransferWise. It’s the most convenient and cheaper way that I found. It’s the only company that gives you the same xe rate with 0,5% fee ( no other hidden charges) . I was using bank to bank before always less, not the rates they display. you can save a lot with Transferwise exchange rate. It uses peer-to-peer system, innovative way of transferring money.use the below link for your first transfer for free:

  7. Manshu, great article, but I am still a bit unclear on one point. can transfer services like Money2India or TransferWise move money from an overseas account to a NRE account? the cost of transfer is low but I was told that such services cannot transfer to a NRE account, only NRO. is this true?

  8. Hi Manshu,

    I am new to NRE account as recently I migrated to Australia. From all your above information I have clear idea regarding money transfer to India or NRE account. How ever still I have one doubt. Is it possible to transfer money(indian rupees) held in NRE/NRO accounts to Indian domestic saving bank accounts through NEFT facility ? If yes, do I need to pay tax for the amount to e transferred ? Also will there be any transaction fee considered ?
    Also whats the limit in sending money this way ?

    Kindly provide some information to clear all these doubts.


  9. Hi,

    Post NRE account opening, is there any particular time duration, only after which we can transfer the funds to NRE account ?
    I have heard that after 180 days of account opening we can transfer the amount to NRE account. Is it true ?
    I am residing in US and I have opened an NRE account in SBI.
    Please clarify on this.

    Vineet Jain

  10. Hi all please advise me that fund transfer by my client company to my nri a/c as remitance is exempt income ? If no then how I can avoid tax if it had already transferred in my nre a/c
    Please pls reply

  11. hi, I’m living in Canada and working for company in India. Can i get my salary transferred in NRE account every month? Will there be heavy conversion charges to be paid?

    Please reply

  12. My account is in Bank of America, California, USA. I’ve to repay (education expenses) my brother who is in merchant navy in India and has an NRE a/c in SBI, India. What are the ways to send him money with losing less on conversion fees in this case?

    Addition info:
    My bro told me that he will get better rate with is account. But, I’m not sure to take advantage of his NRE account what currency ($/Rs) should I send money in and most importantly how? I know there are services provided by RIA and XOOM, etc. , but then they covert the money from $ to Rs before transferring, Then what’s the use of having an NRE a/c and getting a good deal on txn rates.

  13. Hi, I would like fund my sister’s education In India using my NRE account… As the University only accepts USD… Is it possible that I can transfer my money in USD from NRE ACCOUNT?? IS THERE ANY OPTIONS LIKE CHOOSE THE TYPE OF CURRENCY TO TRANSFER….LIKE THAT WHILE USING MY NRI ACCOUNT?? PLZ REPLY THANK U

  14. I opened both NRE and NRO accounts. I have an international card for the NRO account and a debit card for NRE account. Which should I use to withdraw rupees? Which one should I use to withdraw Euros?

  15. This article is incorrect. I use for zero fees when doing bank to bank transfer or debit card to bank transfer — same day transfer.

    Exchange rate is much better than any other competitor. compare every time you transfer with xoom or money2india or any other site.

  16. Nowadays WesterUnion offers the best exchange rate a free transfer compared to other entities such as Xoom, money2india, Ria etc.

  17. My question is if I wants to exchange foreign currency like AED to INR at any foreign currency exchange dealer which authorised by RBI.
    So than the money which we get from aed to inr that i want in my nre account by online payment not in cash or in cheque.

  18. I’ve read all your comments and I have understood bits and pieces and have more questions.
    1. When I transfer money from
    Overseas account through a service like Xoom or transferwise, does it go as usd or inr into my nre account?
    2. Can I use the inr in my nre account to make transactions or buy or pay bills online in india?
    3. I understand that the only way to send to bank is to deposit in nre and not nro account, correct? Nre is tax free?

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  20. I have a query , We use 3rd party remittance to send money to India. The 3rd party usually convert the foreign currency to Indian rupees and send to our Indian Account. Now the issue is NRE account doesn’t accept Indian currency in deposit , so when we use third party transfer services the amount will not get credited in NRE Account or Does it? if does not get credited to NRE Account then DO we have to send money to NRO account and transfer funds NRO to NRE?

  21. Hello sir, I am working in Qatar. How much big money allowed to send to our own NRE account. Is there any limit for the year sending money from qatar to india on my own NRE account?

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