Are you looking for the Best Demat Account for NRI?
Earlier, we have already discussed the Demat account meaning and its importance. As we know, there exist several Best Demat account in India, but our prime focus here is the Best Demat Account for NRI. Most of the time people do not get a clear picture of the right NRI Demat account and the 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 the 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 the easy transfer of funds. You can check the 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 accounts 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 currency derivatives too. Moreover, the best Demat account for NRI must include a wide range of market products.
If we talk about Demat account charges, that specifically includes Demat transaction charges and yearly maintenance fees. Because the lowest brokerage Demat account offers free account opening. If you are a Demat account holder you need to pay the maintenance fee except if in any case, the broker makes it free in any of its plans.
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 from 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 a thing.
Additionally, while discussing the best Demat account for NRI, we notify you about PIO (Person of Indian Origin, a 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 the same level of exemptions are applied to them.
What is the NRE Account?
NRE Bank Account is a Non-Resident External Account. Any money in an NRE account or external account can be remitted outside the country that depicts, money is fully repatriable.
What is the NRO Account?
NRO Bank Account is a 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 the Indian stock market if you already have an NRO savings account. If you doubt it, you can investigate the same. You can also go through the PIS route to trade in the Indian Stock Market.
Simple steps to follow if you want NRI Demat Account
Apart from the search for the best Demat account for NRI, we have mentioned common steps to take in that direction. Firstly, you can open a bank account with an RBI designated bank that allows NRI, NRO, NRE accounts. The information is also available online on their website whether they are designated banks or not. Step two is to open a Demat account and when I say Demat account it is to hold your assets like equities, debentures, or Mutual Funds. In step three, you have to open an account with the right brokerage firm i.e. SEBI registered. This step needs a little attention as there are many stockbrokers 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 banks to verify paperwork and the contract notes. They may charge you a fee for these activities.
How to open the best Demat and trading account for NRI?
You can follow the simple method to open a Best Demat Account for NRI:
- You need to open the RBI-approved bank account.
- PIS (Portfolio Investment Scheme) approval is required(Only for NRE Account).
- The 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 residents. 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 applicants.
- 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 a place of birth as India accompanied with PIO/OCI card.
- A canceled cheque leaf of your NRE or NRO savings bank account.
Explore the following brokers to search best Demat account for NRI in India
Top 4 Best Demat account for NRI by discount brokers in India
- 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
Top 4 NRI Demat Account providing financial brokers
- HDFC Bank Limited
- HSBC Bank
- Citi bank etc.
Top 4 Right Demat accounts for NRI in the traditional broker’s 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 the leading brokers in the traditional broker category. Although ICICI Direct Demat account ranks at the top in the full-time broker’s category still they have average customer support. The firm fails to attend queries of its customers on time. Despite having a sound client base some of the services are found unsatisfying to the users. ICICI NRI Demat account charges are also high.
Similarly, the SBI Smart trade login also gives similar trade facilities but lacks 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 fewer prices. The list includes Wisdom Capital, RKSV, SAS Online, Trade Smart Online, etc.
Get to know about the latest updates made for NRI Trading in India
In accordance with the latest amendment in FEMA regulation, NRIs are now allowed to invest in the Equity market similar to the resident individuals.
- A few years ago, NRIs were allowed to invest in the Equity market but through a PIS account only.
- Now PIS account is only required in the case of an NRE Account by which you can take 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 links 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 buying and selling transactions have to be informed to the PIS banker by the broker itself.
- Sell related transactions will be credited to the 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%
Final Conclusion on best Demat account for NRI
Finally, nowadays opening of Demat account for NRI does not involve lengthy paperwork. The procedures are simplified and left behind the trouble regarding the best Demat account for NRI in India. In this post, we have tried to cover all the essential things to know while opening an NRI Demat account. The 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.