NRE/NRO/FCNR accounts and how to open them online?

If you’re an Indian citizen living abroad, you’re considered a Non-Resident Indian (NRI) under the Foreign Exchange Management Act (FEMA) when you spend more than 182 days outside India in a financial year.

Once your residency status changes, Indian laws require you to stop using your regular resident savings account and convert it into a compliant NRI account – namely, an NRE, NRO, or FCNR account.

NRE, NRO, and FCNR accounts – Key differences

Here’s a comparison of these three types of accounts commonly available to NRIs:

What to choose, when?

If you’re an NRI, the banking jargon can be overwhelming. Figuring out which account to use for what purpose isn’t always straightforward. And to make matters more confusing, bank RMs often pitch multiple products at once – some useful, some not – which leads many NRIs to simply postpone the decision.

Here’s a simplified way to approach it:

• If you have any income in India – from rent, dividends, pensions, or local salary – just go ahead and open an NRO account. It’s the default choice for managing money within India.
• If you are looking to invest in just Mutual Funds or buy stocks, you can open an NRO account or convert your existing residential bank account into an NRO account to get started.
• If you earn abroad and want to invest in Indian markets—especially with an eye to repatriating that money later—an NRE account is your best bet.
• Want to avoid the tax complications of Indian FDs? NRE accounts have tax-free interest (as of now).
• If you’re into F&O trading, you’ll need to use an NRO account – NRE accounts aren’t allowed for this purpose.

Start simple. Add sophistication only when you need it.

FCNR account: The most underrated option

The Foreign Currency Non-Resident (FCNR) account is ideal for NRIs who:

• Prefer deposits in foreign currency
• Want to avoid INR depreciation
• Need guaranteed repatriation in foreign currency

Highlights of FCNR Accounts:

• Only fixed deposits are allowed
• Minimum duration: 1 year; Maximum: 5 years
• No currency conversion risk
• Principal + interest fully repatriable
• Tax-free interest in India
• Offered in major currencies: USD, GBP, EUR, JPY, AUD, CAD

While less discussed, FCNR FDs are excellent for long-term wealth preservation in foreign currency. Most banks allow online conversion of NRE funds into FCNR deposits if the customer already has a digital NRE account.

Currently, SBI offers 5.40% on USD FCNR deposits, making it one of the more attractive fixed-income options for NRIs. Other major banks also offer competitive rates across currencies. FCNR deposits are insured by DICGC up to ₹5 lakhs – so if you’re planning to park larger sums, it’s wise to diversify across multiple banks.

Why these accounts are legally important

Using a regular Indian resident savings account after becoming an NRI is a violation of FEMA regulations. Banks are required to reclassify such accounts once they’re aware of your residency status.

Under FEMA Deposit Regulations, 2016:

“A person resident outside India is not permitted to hold a savings account in India. All such accounts must be converted to NRE/NRO/FCNR depending on the source and type of funds.”

Such violations can trigger regulatory actions, including:

• Account suspension
• Denial of interest
• Notices from tax authorities

The RBI Master Direction on Deposits (2016) and the FEMA (Deposit) Regulations make it mandatory for banks to ensure compliance.

The digital revolution: No visit required anymore

Until recently, opening an NRE or NRO account meant:

• Booking a flight to India
• Physically visiting a bank branch
• Coordinating with notaries or embassies
• Waiting weeks for activation

Today, leading banks and fintech platforms offer fully digital onboarding for NRI accounts.

Here’s how the experience has evolved:

A growing number of institutions now support 100% remote NRI account setup. Banks such as ICICI, HDFC, Axis, and IndusInd offer seamless digital onboarding experiences, often in partnership with fintech platforms. 

For example, ICICI Bank provides a paperless NRE account opening journey for NRIs in the USA, with accounts getting activated within a day in many cases.

Do you still need to courier documents?

Yes – but only at the final step, after your account is fully set up.

Once your KYC is approved online and your application is provisionally accepted:

• Your account is activated immediately—you can deposit or withdraw funds right away.
• Banks usually provide up to 60 days to send the required physical documents.

You will need to submit a signed physical application form, along with a self-attested and notarised copy of your passport and address proof. In some cases, banks may request additional documents depending on their internal compliance policies.

Importantly, many banks facilitate the courier process themselves, either by arranging pickups or partnering with courier providers. This means customers usually don’t have to bear courier costs or worry about logistics – it’s a smooth and coordinated process from the bank’s side.

As an added convenience, some banks offer RM visits in major foreign cities, and others accept documents via their international branches or global courier partners

Digital notarisation has replaced physical notary visits

Notarisation is the process of verifying the authenticity of your identity documents – typically your passport and proof of address – by an authorized professional (a notary public). It ensures that the documents you submit are genuine and legally acceptable to banks and regulatory authorities.

Earlier, notarisation was one of the biggest pain points:

• Long queues at embassies
• Expensive local notaries
• Tedious scheduling

These platforms are legally valid, fast, and significantly cheaper than traditional alternatives. 

Just make sure to confirm with your bank that notarized documents from your selected provider is accepted before proceeding.

Final thoughts

The hassles of visiting India or coordinating in-person for notarisation are slowly coming down.

With advancements in digital KYC, remote notarisation, and fintech-bank collaborations, NRIs can open and operate NRE, NRO, and FCNR accounts entirely online—while staying compliant with FEMA and RBI norms.

Disclaimer: This blog is for informational purposes only and should not be considered financial or tax advice. Please consult with a qualified professional for personalized guidance.