Choose NRO account if you…

(Primary reason) want to park India based earnings in Rupees in India; want account to deposit income earned in India such as rent, dividends etc; want to open account with resident Indian (close relative)

NRE bank accounts are accounts that hold repatriable money. That is, money in such accounts can be converted back to a foreign currency. NRO bank accounts, on the other hand, are accounts that hold non-repatriable money. Money in NRO accounts will stay as Indian rupees and cannot be readily converted back.

If an investor has a choice, we would recommend using an NRO account for their mutual fund investing. The reason for this is the documentary requirements for operating an NRO linked mutual fund investing is less than that for an NRE account. Since money in NRE accounts are repatriable, mutual fund companies often ask for bank statement proof for every transaction to show that the money indeed did originate from an NRE account (FIRC rules). With an NRO account, there are no such requirements.