What is the difference between NRE, NRO, and FCNR accounts in India?

These are the three account types Indian banks offer once you become a Non-Resident Indian. An NRE (Non-Resident External) account holds income earned abroad, is denominated in rupees, and is fully and freely repatriable — principal and interest can flow back to the US without limit. An NRO (Non-Resident Ordinary) account holds India-sourced income — rent, dividends, pension, a property sale — and repatriation is capped (generally $1 million per financial year) with TDS applied. An FCNR (Foreign Currency Non-Resident) account is a term deposit held in foreign currency (USD, GBP, etc.), so you avoid rupee exchange-rate risk on the deposit, and it's also fully repatriable. NRE interest is tax-free in India; NRO interest is taxed in India. Note: tax-free in India does not mean tax-free in the US — see the next question.