In this article, we will cover all you need to know about the best Demat account for NRI (Non-Resident Indian). let’s start…
What are the Best Demat Accounts for NRIs?
India’s economy is among the world’s fastest-growing. As a result, it is regarded as advantageous for investment, particularly by non-resident Indians in Indian companies. A Non-Resident Indian (NRI) is a citizen of India who lives outside of the country. An NRI must also have a Demat account to trade in the Indian capital market. An NRI’s Demat account also allows them to trade in bonds, stocks, initial public offerings (IPOs), mutual funds, and other financial instruments.
Below listed are the best Demat and trading accounts for NRI.
List of Top 4 Best Demat Accounts for NRI – 2024:
| Sl.no | Broker Name | Ratings |
|---|---|---|
| 1. | Zerodha NRI Demat Account | 9.37/10 |
| 2. | Sharekhan NRI Demat Account | 9.26/10 |
| 3. | IIFL NRI Demat Account | 9.17/10 |
| 4. | Kotak Securities NRI Demat Account | 9.12/10 |
How to open a Demat account for NRI?
Opening Procedure of Best Demat Account for NRIs: A depository participant, stockbroker, or bank registered with NSDL and CDSL can open a Demat and trading account for an NRI. As a result, stockbrokers offer two-in-one account services, whereas banks offer three-in-one account services. All three, however, meet the requirements for opening a Demat account.
To begin, the NRI must choose between a “repatriable Demat account” and a “non-repatriable Demat account” based on their preference. They have the option of opening a Demat account online or in person.
The steps to open a Demat and Trading account are as follows:
- Fill out the Demat account application form.
- Please include all essential documentation.
- All documents should be self-attested and notarized by the Indian Embassy/ Consulate or any other competent authority.
- Send the completed form, along with any supporting materials, to depository participants or brokerage firms.
Documents required to open an NRI Demat account:
The paperwork needed to open an NRI Demat Account is listed below.
- An account opening form that has been properly filled out and signed by the account holders.
- The Reserve Bank of India has issued a letter of permission to the NRI applicant under the Portfolio Investment Scheme (PIS).
- A passport-sized photo of the account holder with their signature across the photo is required.
- Copy of PAN card scanned Proof of the holder’s overseas address.
- Visa and passport photocopy A NRO/NRE bank account’s canceled check must be connected to a Demat account.
- To use the Demat account’s nomination facility, the nominee must provide a photograph and signature.
- The Notary, Banker, or Indian Embassy in the nation where the NRI resides should certify all of the aforementioned documents.
What is a Demat Account?
A Demat account is also referred to as a Demat account. It’s a type of account that keeps electronic records of financial assets. A Demat account also allows for the smooth purchase and sale of financial securities. It also holds dematerialized equity shares, debentures, bonds, government securities, ETFs, mutual funds, and other securities. When you purchase or sell shares of a corporation, your Demat account is credited or debited in the same way that your bank account is. National Securities Depository Limited (NSDL) or Central Depository Services Limited (CDSL) manages all Demat accounts in India.
Types of NRIs Demat Account:
NRI (Non-Resident Indian), PIO (Person of Indian Origin), and OCI (Overseas Citizen of India) cardholders can open a Demat account. The account opening process, transactions, and costs are virtually similar to those of a resident Demat account. In India, a Demat account is required to invest in stocks. This Demat account can also be used to invest in mutual funds, ETFs, and convertible debentures.
The two forms of NRI Demat Accounts are as follows.
NRE Demat Account:
An NRE bank account is coupled with an NRE Demat account. An NRE account is used to manage funds earned outside of the United States. As a result, the money is entirely repatriable, meaning it can be moved internationally. An NRE Demat Account is often referred to as a Repatriable Demat Account. Because all revenues from the trading of shares can be moved abroad, this is the case.
NRO Demat Account:
An NRO bank account is coupled with an NRO Demat account. To manage funds generated in India, an NRI registers an NRO account. A Non-repatriable Demat Account is also known as an NRO Demat Account. The reason for this is that not all funds can be moved internationally. After paying taxes, the principal amount of investments can be reclaimed. It is permissible to move up to $1 million of funds abroad in a financial year, according to RBI guidelines. After TDS is subtracted, the interest earned on this account is remittable. Overall, NRIs must open two distinct Demat accounts for repatriable and non-repatriable investments, according to RBI regulations.
NRE Demat Account vs NRO Demat Account:
The distinctions between NRE and NRO Demat Accounts are as follows.
| Criteria | NRE Demat Account | NRO Demat Account |
|---|---|---|
| Goal | For repatriation-based investments | Non-repatriation investments are those that are made with the intention of not being repatriated. |
| Type of linked bank account | NRE bank account | NRO bank account |
| Funds Repatriation | Fully repatriable | After taxes, the principal amount is reimbursable. In a financial year, a person can transfer up to $1 million. After TDS has been deducted, the interest earned is reclaimable. |
Best Demat Account for NRI Benefits:
The following are some of the advantages of having an NRI Demat account.
- From anywhere in the globe, an NRI can invest in the Indian stock market swiftly and easily. NRI transactions appear in the Demat account almost instantly.
- The transaction’s physical documentation process is also simplified.
- NRI Demat account transactions are swift and efficient. Forgery, loss of physical papers, late delivery, as well as other issues are unlikely to occur with an NRI Demat account.
- Even a single share can be kept in an NRI Demat account. Shares, convertible debentures, ETFs, mutual funds, and other financial instruments are available to NRIs.
For more details about the benefits of the Demat account.
What types of charges are applied for an NRI Demat account?
The following fees apply to NRI Demat accounts:
Demat account opening fee, Demat account AMC (Yearly), Debit transaction charges, and Other charges i.e. pledge fees, and fees for updating Portfolio.
How Can I open an NRI trading account online?
The process of opening an NRI account is partially online. Fill out the account opening form online, then save the PDF file to your computer, print it, sign it, and mail it to the depository participant.
NRIs need three accounts to invest in the Indian stock market:
1. NRI savings bank account (NRE/NRO account)
2. NRI Demat account
3. NRI trading account
Can an NRI hold a Demat Account?
Non-resident Indians (NRI) and residents of India can both maintain a Demat account to trade stocks in India. When it comes to opening a Demat account, an NRI is required to fulfill FEMA’s guidelines (Foreign Exchange Management Act). Unreturnable and nonreturnable Demat accounts can both be opened by an NRI.
Just after obtaining a Portfolio Investment Scheme (PIS) license from a designated bank can an Indian NRI trade in the secondary markets using a Demat account?
According to the Reserve Bank of India (RBI), an NRI can only own up to 10% of a company’s paid-up capital. Investments in Initial Public Offerings can be made by non-resident Indians (NRI) utilizing NRE Demat accounts. For non-repatriable investments, the NRI will use his or her NRO account and NRO Demat account.
But let’s say someone already has a Demat account before becoming an NRI. When they leave the nation, they can convert it to an NRO account and trade from there, or start a new account. There will be a transfer of shares from the existing brokerage business into a new NRO account.
Which is the Best Demat account for NRI?
Banking brokers and sharebrokers provide Demat accounts. It’s hard to decide which option to take when there are so many.
Here is the list of top NRI Demat account providers in India.
1. Zerodha NRI Demat Account
2. Sharekhan NRI Demat Account
3. Kotak Securities NRI Demat Account
Can an NRI have a Demat account?
Yes, NRIs are permitted to open Demat accounts in India. They’d need RBI clearance for a PIS (Portfolio Investment Scheme). The PIS allows NRIs to buy and sell stocks on the Indian stock exchange.
Can NRIs hold shares in India?
Yes, NRIs are permitted to own shares in India through stock investments. In their status as a resident Indian, they can also opportunity to reveal as a gift or purchase. NRIs will need an NRI Bank account, NRI Trading account, and NRI Demat account to participate in the Indian capital market.
Can NRI invest in shares in India through a stock exchange?
On a repatriation or non-repatriation basis, a Non-Resident Indian (NRI) can invest in the Indian stock market by buying assets through the Portfolio Investment Scheme (PIS). In addition, the Reserve Bank of India’s (RBI) PIS plan allows NRIs to purchase shares or convertible debentures from the stock exchange using a bank account at a designated branch. The PIS plan is not necessary for NRO (Non-Resident Ordinary), according to the newest guidelines, because they will be recognized as investments by citizens.
Is NRI allowed to invest in ETF?
Yes, NRIs can invest in India’s exchange-traded funds. They have the option of investing on a repatriation or non-repatriation basis.
