Are you looking for best demat account for NRI?
Earlier, we have already discussed demat account meaning and its importance. As we know, there exist several demat accounts in India, but our prime focus here is best demat account for NRI. Most of the time people do not get the clear picture of right NRI demat account and related process involved. We found people demanding integration of all such queries and clearances as a whole. To simplify their difficulties, we are going to discuss foremost criteria for the same. They can start by choosing a tech savvy bank or a broker, i.e. to examine if it can handle long distance transactions appropriately. It can assure easy transfer of funds. You can check broker’s background in terms of balance sheet etc.
NRI accounts are under the control of both SEBI and RBI, so there are some terms and conditions in NRI trading. It is fine that NRIs can open demat account in India but can only trade in equity delivery, no short selling, no exposures etc. They can invest in mutual funds and IPOs through NON PIS i.e. NRE/NRO saving accounts. As per the RBI Circular on 2nd Feb 2017, where they get access to the exchange traded currency derivatives(ETCD) market to hedge currency risk incurring out of their investments in India. Now, they can take positions in the currency derivatives too. Moreover, the best demat account for NRI must include wide range of market products.
If we talk about demat account charges, that specifically include demat transaction charges and yearly maintenance fees. Because, lowest brokerage demat account offer free account opening. If you are a demat account holder you need to pay the maintenance fee except if in any case, the broker make it free in any of its plan.
Factors to know, while chasing perfect demat account for NRI
Sometimes the question arises that if NRI can do trading through relatives in India. That varies broker to broker and it is possible if he can give a power of attorney. That is easier and faster. However, it depends on brokers’ policy if they allow such thing.
Additionally, while discussing best demat account for NRI, we notify you about PIO (Person of Indian Origin, citizen of any country except Bangladesh or Pakistan). If he invests in Indian Securities, it is treated as the investment by NRI and requires similar approvals and same level of exemptions are applied to them.
What is NRE Account?
NRE Bank Account is Non Resident External Account. Any money in NRE account or external account, can be remitted outside the country that depicts, money is fully repatriable.
What is NRO Account?
NRO Bank Account is Non Resident ordinary Account. With NRO Account the limitation is applied i.e. repatriation of 1 million USD per annum.
You can not transfer money from NRO Account to NRE Account, but money can be freely transferred from NRE to NRO Account. Also, it is not required to open PIS Bank Account for investment in Indian stock market if you already have NRO savings account. If you doubt it, you can investigate about the same. You can also go through PIS route to trade in Indian Stock Market.
Simple steps to follow if you want NRI Demat Account
Apart from search of best demat account for NRI, we have mentioned common steps to take in that direction. Firstly, you can open a bank account with a RBI designated bank that allows NRI, NRO, NRE accounts. The information is also available online on their website that whether they are designated banks or not. Step two is to open a demat account and when I say demat account it is to held your assets like equities, debentures or Mutual Funds. In step three, you have to open an account with a right brokerage firm i.e. SEBI registered. This step needs a little attention as there are many stock brokers that are SEBI registered and allow trade in NSE or BSE.
Guidelines in reference to NRI Demat Account
Ask your bank for PIS i.e. Portfolio Investment Scheme approval. It may take a nominal fee of around Rs 1000 or Rs 2000 and then you are allowed to invest in the stock markets. You should also remember, that you are not allowed to speculate on a day-to-day basis in the share markets. Like, if you buy shares on Monday, you would have to wait till Wednesday to sell it. However, in derivatives the condition may vary. RBI has now simplified the rules and it depends on related bank to verify paper work and the contract notes. They may charge you a fee for these activities.
How to open best demat and trading account for NRI?
You can follow the simple method to open Demat Account for NRI:
- You need to open RBI-approved bank account.
- PIS (Portfolio Investment Scheme) approval is required(Only for NRE Account).
- Client has the option to trade with one bank account only.
- Fill up trading & demat account opening forms with brokers according to KYC guidelines.
People with NRI with NRO Account can trade in equity delivery as normal as Indian resident. Here, you just need to open a normal demat and trading and link it to your NRO Saving Account.
Common documents asked for opening NRI Demat Account
- Photocopy of PAN card.
- Latest photographs of applicant.
- Photocopy of PIS permission letter from RBI approved bank & Bank Account details(Applicable only for NRE Account).
- Indian Address Proof (Aadhar Card/Voter ID/Driving License/Bank Statement/Utility bill)
- Overseas Address Proof – driving license/Bank Statement/Lease paper.
- Photocopy of FEMA declaration
- Indian Passport or Foreign passport with place of birth as India accompanied with PIO/OCI card.
- A cancelled cheque leaf of your NRE or NRO savings bank account.
Explore the following brokers to search best demat account for NRI in India
Best demat account for NRI by discount brokers
- Wisdom Capital
- SAS Online
- 5 Paisa
Best NRI Demat Accounts in the discount brokers category
- Wisdom Capital NRI demat account
- UPSTOX NRI demat account
- SAS Online NRI demat account
- 5 Paisa NRI demat account
Perfect demat account for NRI by full-time brokers
NRI Demat Account providing financial brokers
- HDFC Bank Limited
- HSBC Bank
- Citi bank etc.
Right demat accounts for NRI in traditional brokers category
- ICICI Direct NRI demat account
- HDFC Securities NRI demat account
- SBI demat account for NRI
- Kotak Securities demat account for NRI
If we talk about financial brokers like ICICI Direct, it is one of leading broker in traditional broker category. Although ICICI Direct demat account ranks at top in full time brokers category still they have average customer support. The firm fails to attend queries of its customers on time. Despite having the sound client base some of the services are found unsatisfying to the users. ICICI NRI demat account charges are also high. Similarly SBI Smart trade login also give similar trade facilities but lacks in good client assistance. If you are looking up the best demat account for NRIs, there are low brokerage demat account providers too. They too serve well in trading and provide better customer support at very less prices. The list includes Wisdom Capital, RKSV, SAS Online, Trade Smart Online etc.
Get to know about latest updates made for NRI Trading in India
In accordance with the latest amendment in FEMA regulation, NRIs are now allowed to invest in Equity market similar to the resident individuals.
- Few years ago, NRIs were allowed to invest in Equity market but through a PIS account only.
- Now PIS account is only required in case of NRE Account by which you can take out the funds out of the country and the sale proceeds.
- NRI with NRO Account can trade in Equity delivery like the resident Indian. Only opening of a normal demat and trading account is needed and further link it with your NRO Savings Account.
Some other regulations applied on NRI Trading/Investment in stock/shares
- Intraday trading is restricted for NRIs.
- The contract notes of buy and sell transaction has to be informed to PIS banker by the broker itself.
- Sell related transactions will be credited to client’s bank account net of Tax. And, the capital gains will be calculated by CA.
- Tax on long term capital gains is Nil and short term capital gain is 15.45%.
Finally, nowadays opening of demat account for NRI does not involve lengthy paperwork. The procedures are simplified and left behind the trouble regarding best demat account for NRI in India. In this post, we have tried to cover all the essential things to know while opening NRI demat account. Latest guidelines are also mentioned. We assume that the traders with various doubts like, which demat account is best for nri, Can NRI open demat account in India or which is prime demat account for NRI etc got the answers. We appreciate your participation in asking queries from us. Feel free to share your views and if you still have any doubts, you can contact us. Thank you, we hope you have profitable trading ahead.