For any NRI who is about to open NRE account gets this question in mind that what happens to their money when they send it from any international held currency account to their NRE account. Here are key points that will help you understand better about the NRE banks
What currency is held in NRE Account
Money deposited in NRE banks is deposited in INR only.
Does money transferred to NRE account gets converted to INR?
Yes, it will be converted to INR based on applicable conversion rates and fees charged by your bank. If you use direct bank method to transfer money from foreign bank account to Indian NRE account, you end up paying good conversion fees. This can be negotiated with the bank and your relationship manager or branch manager can help you get the best deals. But if you use services like Wise, you will directly send INR only and conversion is taken care by them. I recommend using Wise.
Do i pay currency conversion fees and charges while sending money back from NRE to my foreign bank account?
When you want to transfer back this money to your foreign bank account, you have to pay the conversion charges again.
What is limit of sending money from NRE to foreign bank account?
There is no limit in sending back money from India to your foreign bank account.
Is interest earned on NRE account tax free?
The interest you earn is not taxable in India, but it is important to note that tax is applicable based on your country of residence. Let us say you are in USA, then you will pay taxes just like your normal income.
Also Read : Best way to File USA tax returns as NRI