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NRI Demat Account - Online Opening Procedure, Charges, Rules

Published on Thursday, July 4, 2019 by Chittorgarh.com Team | Modified on Monday, November 18, 2019

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NRI Demat Account - Online Opening Procedure, Charges, Rules

A Demat Account is mandatory in India to invest in the stock markets. Whether you are a resident Indian or a non-resident Indian (NRI), you should have a demat account to invest in stocks, IPOs, mutual funds, Bonds, and NCDs etc.

Note an NRI is defined as a person resident outside India who is a citizen of India or is a person of Indian origin. All transactions by NRI's are governed by the FEMA regulations.

A Demat Account is an online account for holding securities in electronic format. It's very similar to a bank account but instead of money, it holds stock, MF, ETF, NCD and Bonds. A Demat Account makes online trading and investment easy, fast and secure.

To know more about Demat Account, visit below articles:

Let's take a look at how to open an NRI Demat Account Charges, Requirements, Benefits, Opening Procedure and Taxation, etc.


NRI Demat Account

The Indian stock market is one of the attractive destinations for investors across the globe. Any NRI (including PIO, OCI) seeking to create wealth through investments in stocks and mutual funds cannot ignore the Indian stock markets.

The first step towards investing Stocks, Mutual Funds, IPOs, etc. in India, is to open NRI Demat account.

The Demat Account for NRI is same as the Demat Account for a resident Indians. It is opened and operated in the same way as resident Indian account. Even the NRI Demat Account Charges are the same as a resident Indian demat account. The only difference is while opening the demat account; a customer has to mention the type of demat account as Resident Indian or NRI (subtype as Repatriable or Non-Repatriable).

Demat Account Opening Form for NRI

The demat account is opened and managed by Central Depositories in India. The National Securities Depository Ltd (NSDL) and the Central Depository Services India Ltd (CDSL) are government-approved central depositories (CDs) who manages the demat accounts in India.

The stock brokers are the registered members (authorized agents) of the central depositories. The role of a stock broker is limited to acting as an intermediary between the customer and the central depository.

The NRI Demat Account is linked with the NRO or NRE bank account. The proceedings from the sell of shares, dividends and earning are directly deposited in the linked bank account.

An NRI customer can open multiple demat accounts on the same name with different brokers. But only 1 demat account is allowed per depository participant (stock broker).

Note: As per RBI guidelines, an NRI must maintain two separate accounts for repatriable and non-repatriable investments. So, if you trade with funds from your NRE account then sale proceeds can be credited to your NRE account for repatriation. If you choose to trade on a non-repatriable basis, then, the proceeds will be credited to the NRO account.

NRI Demat Account Key Facts

  • Demat account is the safest way to keep securities for the long term.
  • NRI Demat Account can be opened with any Depository Participant (DP). Most stock brokers and large banks are DP's also.
  • NRI doesn't need permission from RBI or SEBI to open a demat account.
  • An NRI demat account can be opened as a single holder or a joint holder.
  • NRI demat account has nomination facility.
  • NRI Demat Account has to be linked with the NRI Bank Account (NRE or NRO) for direct deposit of dividends.
  • The customer has to provide a signed Power of Attorney (PoA) to the stock broker. This PoA allows the broker to withdraw the shares from the demat account when the customer sells them online through the broker.

NRI Demat Account Types

The NRI Demat Account is classified into two major subtypes:

  1. NRE Demat Account (Repatriable Demat Account)
  2. NRO Demat Account (Non-Repatriable Demat Account)

While opening the demat account, an NRI has to mention the account type as NRI and subtypes as Repatriable or Non-Repatriable. An NRI must open separate demat accounts for holding Repatriable and Non-Repatriable securities.

NRE Vs NRO Demat Account

 

Repatriable Demat Account (NRE Demat)

Non-Repatriable Demat Account (NRO Demat )

Purpose

To buy/sell shares on repatriable basis.

To buy/sell on non-repatriable basis.

To hold securities which are bought as Indian resident before becoming NRI.

Linked with Bank Account

NRE Bank Account with PIS

NRO Bank Account (Non-PIS)

Dividend/Interest

Both principal and dividend/interest are Repatriable

The principal is not Repatriable. Dividend/interest is Repatriable.

Detail comparison - NRE vs NRO Account in India for NRI


NRI Demat Account Opening Process

NRI Demat Account opening procedure is simple as it doesn't require any approval from RBI. NRI Demat Account can be opened with any of the stock brokers or banks registered with NSDL or CDSL as depository participant. All major banks and stock brokers like HDFC, Kotak, ICICI, Axis Bank, SBI, Zerodha, Sharekhan, Angel Broking, etc., offer NRI Demat Account Opening services.

NRI Demat Account Prerequisites

NRI Customer should have the following accounts or permissions before opening a demat account:

  1. PAN Card
  2. NRI Bank Account (NRE or NRO)
  3. PIS approval by RBI

Documents Required for NRI Demat Account

The following documents are required to open an NRI Demat Account-

  • Completely filled account opening form signed by all the holders.
  • PIS permission letter from the bank (issued by RBI).
  • Photographs of all the holders with signatures across the photo.
  • PAN Card copy for all holders.
  • Overseas address proof for all the holders.
  • Canceled cheque of the linked NRE/NRO Bank account specified in the form.
  • Photograph and signature of the nominee (for nomination facility).

Note: All the documents must be verified by the local Indian embassy or any other competent authority approved by the banks.


NRI Demat Account Charges

An NRI Demat account attracts charges like a resident demat account. This includes fees by the Central Depository and Depository Participant (Broker). There are also government taxes to be paid on the demat account. Some key NRI demat account charges are:

  • Account Opening Fee (One Time)

    Most brokers charge an NRI demat account opening fees for processing the account opening application. This fee is to be paid a one-time during the account opening process. Stock brokers, from time to time, run promotional programs wherein they give a discount on opening fees or waive it completely.

  • Annual Maintenance Charges (Yearly)

    The Demat AMC is a fee charged by the broker for maintaining your demat account. It is an annual fee charged irrespective of whether you have done a transaction in your NRI demat account or not.

  • Debit Transaction Charges

    A fee charged when you sell shares and the shares are withdrawn from the demat account. Customer pay this fee for every withdrawal from the demat account. Some brokers charge a flat rate fee per transaction while other charges it in the percentage of the value of the transaction.

  • Other Charges

    The Other changes for NRI demat account include Pledge Fees and Fee for modification of your personal info.


NRI Demat Account Taxation

NRI Demat Account transactions charges are taxed under GST (18%). The GST is applicable on all charges except stamp charges for power of attorney.


NRI Demat Accounts with Broker

1. NRI Demat Account HDFC

HDFC, the leading bank and financial service provider in India, offers a range of NRI Products and services.

HDFC NRI 3-in-1 account is a key offering by HDFC group to NRI's who would like to invest in a wide range of securities such as Equity, FD, MF, etc. This account combines banking, broking and demat account which makes online equity trading seamless and hassle-free.

Read our HDFC NRI Account Review to know in detail about various NRI Trading services offered by HDFC.

2. NRI Demat Account Kotak

Kotak, a leading bank and financial service provider offers online NRI account for trading and investing in India stock market, mutual funds, bonds, FDs etc.

The Kotak Securities' NRI account is a 3-in-1 NRI account. This includes a savings bank account, a trading account and a demat account. These accounts are interlinked to offer a seamless trading experience to the NRI customers.

Kotak offers free trading software including the mobile app, research reports and trading tips and hand-holding for beginners.

Read our Kotak NRI Account Review to know in detail about various NRI Trading services offered by Kotak Securities.

3. NRI Demat Account ICICI

ICICI bank is a leading private bank in India with presence in almost every part of India and major cities around the world.

ICICI offers a unique 3-in-1 account by integrating banking, broking and demat accounts. This online NRI investment account offers a wide range of investment options including Stocks, FTF, Derivatives (F&O Trading), Mutual Funds, and an IPO. In addition, ICICI also offer services related to PAN Card, Portfolio Investment Scheme (PIS), NRI Taxes, Stock Research and Tips.

ICIC offer following type of accounts based on the need of NRI

  • Demat Accounts (NRE or NRO)
  • Savings Account (NRE or NRO)
  • Trading Account (PIS or NON-PIS)

4 steps to open NRI Account with ICICI

  1. Fill enquiry form and request a free callback.
  2. Fill the online NRI application form.
  3. Free courier pickup of documents at your doorstep
  4. NRI Account opened.

Read our ICICI Securities NRI Account Review to know in detail about various NRI Trading services offered by ICICI.

4. NRI Demat Account Axis Bank

Axis bank is the third largest private sector bank in India. Axis Bank offers 4 in 1 NRI Investment Account which has multiple investment options such as equities, derivatives, IPOs, mutual funds and ETFs. The key feature of 4-in-1 account includes transactions with the ease of integrated account, being able to choose from a wide range of products and access to independent and third-party research.

Read our Axis Bank NRI Account Review to know in detail about various NRI Trading services offered by Axis Securities.

5. NRI Demat Account SBI

State Bank of India is the largest bank in India. SBI NRI customers can invest online in Equities, Derivatives, IPOs, and Mutual Funds through its 4-in-1 account consisting of:

  1. NRE Savings Bank (SB) account
  2. NRE Portfolio Investment Scheme (PIS) account
  3. Demat Account
  4. Trading Account

While the SBI 4-in-1 account offers the convenience of investment and trading, the brokerage charges of 0.75% on the transaction is very high in comparison to the most other brokers.

Read our SBI NRI Account Review to know in detail about various NRI Trading services offered by SBI Capital.

6. NRI Demat Account Zerodha

Zerodha is India's largest stock broker offering discount brokerage services to stock market investors and traders. Zerodha is famous for its excellent trading platform, flat rate brokerage and lowest changes in the industry.

Zerodha NRI Account consists of a trading and a demat account. Zerodha serves only those NRI customers who have their PIS account with Axis Bank, HDFC bank or Yes Bank.

Zerodha NRI Brokerage Charges

Segment

NRI Brokerage Charges

Equity Delivery

₹200 per executed order (both side)

Equity F&O

₹100 per executed order (both side)

Read our Zerodha NRI Account Review to know in detail about various NRI Trading services offered by Zerodha.

7. NRI Demat Account Sharekhan

Sharekhan NRI Demat account is a key offering of India's one of the largest stock broker with presence in over 600 cities around India and abroad.

Sharekhan offers NRI trading and demat account. It has partnerships with Axis Bank, IndusInd Bank and HDFC Bank for NRI bank account.

Sharekhan offers a dedicated relationship manager to all NRI customers along with the free online trading platform. Sharekhan also offers research reports and recommendations.

Sharekhan NRI Trading Charges

Transaction

NRI Charges

Account Opening Charges

₹3000

Account Service Charge

₹2500

PIS Account AMC

₹1000

Brokerage - Equity Delivery

0.50%

Brokerage - Equity Futures

0.1% on first leg and 0.02% on second leg if squared off on the same day or 0.1% if square off on any other day.

Brokerage - Equity Options

₹250 per contract note

Read our Sharekhan NRI Account Review to know in detail about various NRI Trading services offered by Sharekhan.

8. NRI Demat Account Angel Broking

Angel Broking is one of the oldest brokerage houses in India with a wide physical presence across cities in India.

Angel offers NRI Trading and NRI demat account. Angel offers 2 types of account to NRI customers:

  1. PIS Account (NRE or NRO) - For Stock investment
  2. Non-PIS Account (NRE or NRO) - For investment in IPO, Mutual Funds, and NCD etc.

Read our Angel Broking NRI Account Review to know in detail about various NRI Trading services offered by Angel Broking.

FAQ's

  1. 1. Can NRIs open demat account in India?

    Yes, NRIs can open a demat account in India. In fact, a demat account is must to invest in stocks, mutual funds, and derivatives, etc., in Indian stock exchanges.

    The demat account is an online account to hold securities like stocks, MF, and debentures etc.

    An NRI demat account can be opened on Repatriable or Non-Repatriable basis. These accounts are linked to NRE or NRO Bank account.

    Discuss this question

  2. 2. Can NRI open a joint NRI Demat account?

    Yes, NRIs can open a joint NRI Demat Account. The joint holders in an NRI demat account can be either another NRI or a Resident Indian.

    Discuss this question

  3. 3. Do I need to get RBI approval before opening my Demat Account?

    No, you do not need any approval from RBI to open a demat account.

    But to trade or invest in India Stock Market, you need PIS permission from RBI. Note that PIS (Portfolio Investment Scheme) enables NRI's to buy and sell stocks in India by routing these transactions through their NRI Bank (NRE or NRO). It's simple permission which the bank helps you to get.

    Discuss this question

  4. 4. I have an Indian Resident Demat Account. Do I need to open a separate NRI demat account?

    Yes, you need to close the existing Demat Account opened when you were a 'Resident Indian', and a new NRI demat account needs to be opened. The securities held in your old demat account can be moved to the new NRI demat account.

    You would need to present documents supporting the acquisition of the securities like contract note or a letter of allotment.

    Discuss this question

  5. 5. Can someone else, residing in India, operate my Demat Account?

    Yes. For this, you have to give a Power of Attorney in favor of the person residing in India. Also, a copy of the Power of Attorney, duly notarized, must be submitted to your stock broker.

    Discuss this question

  6. 6. Can NRIs have Demat Account in India?

    Yes, NRI's are eligible to open and operate the demat account in India.

    While a demat account can be opened by NRI without any approval from RBI, the NRI customer needs RBI PIS approval to buy/sell shares in India.

    Note that the demat account is an online repository of shares. It's an online account similar to a bank account. It holds shares, Mutual Funds, ETFs and, Bonds etc. in electronic format.

    Discuss this question

  7. 7. Can NRI hold a demat account in India?

    Yes, NRI's are permitted to have a demat account in India to hold securities in electronic format. These securities include shares of listed companies, mutual funds, ETFs, Bonds etc.

    While opening a demat account, NRI has to choose account type as 'NRI Account' and subtypes as below based on the investment need:

    1. NRE Demat Account (Repatriable Demat Account)
    2. NRO Demat Account (Non-Repatriable Demat Account)

    An NRI has to link his demat account with an NRE or NRO bank account (PIS or Non-PIS) based on the requirement. The dividends and proceed from the sale are deposited into this linked account.

     

    Note that if you have recently become an NRI and hold a Demat Account (Resident Indian), you will have to close the existing demat account and open a new NRI demat account. You could choose to sell all the holding in your existing account or transfer them to the new account. When transferring, you may have to provide the proof of purchase i.e. contract note.

    Discuss this question

  8. 8. Can NRI maintain demat account in India?

    Yes, NRI can maintain an NRI demat account.

    If you are an NRI and still hold a demat account which you opened when you were in India, it's important to close that demat account and open a new demat account for NRI.

    In a similar way, if you were an NRI and now moved back to India, it is required by law to close the NRI demat account and open another demat account.

    Discuss this question

  9. 9. How to open NRI Demat Account online?

    An NRI needs a demat account to invest or trade in India stock market, Mutual Funds, ETFs, Bonds, NCDs etc.

    An NRI should have the few accounts or permissions before opening a demat account in India:

    1. PAN Card
    2. NRI Bank Account (NRE or NRO)
    3. PIS approval by RBI

    With this, most NRI's can open the NRI demat account online with banks or brokers offering NRI trading services.

    To invest in India an NRI need 4 accounts:

    1. NRE or NRO Savings Bank Account
    2. NRE or NRO Portfolio Investment Scheme (PIS) Account
    3. Demat Account
    4. Trading Account

    There are 2 ways to open these 4 accounts:

    1. Open 4-in-1 Account with a Bank
    2. Open Bank account with a Bank and Trading & Demat Accounts with a broker

    The 1st option of account opening is easy, convenient and completely online. Visit the website of any one of the popular banks (prefer the bank you already have a relationship with) and fill their NRI Account enquiry form. You will get a call from them in 24 hours to assist you with account opening.

    In the case of the 2nd options, first, follow the above steps to open the 2 bank accounts. Once you have them ready, choose a broker i.e. Zerodha, Angel Broking or Sharekhan to open the trading and demat account.

    Note the 4-in-1 account offer convenience but their charges are very high in comparison to the brokers like Zerodha or ProStocks. Also, the trading tools available with discount brokers like Zerodha are way more superior then the banks.

    The following is the list of documents required to open an NRI Demat Account:

    • Completely filled demat account opening form signed by all the holders.
    • PIS Permission Letter from the bank
    • Photographs of all the holders with signatures across the photo.
    • PAN Card copy for all holders.
    • Overseas address proof for all the holders.
    • Canceled cheque of the linked NRE/NRO Bank account specified in the form
    • Photograph and signature of the nominee (for nomination facility).

    Discuss this question

  10. 10. Can stocks purchased under repatriable and non-repatriable category be held in a single demat account?

    No. An NRI must open separate demat accounts for holding repatriable and non-repatriable securities.

    An NRI customer has to choose one of the following subtypes of NRI Demat account while opening the account:

    1. NRI Repatriable
    2. NRI Non-Repatriable

    Also, the NRI Demat account must be linked with a corresponding bank account.

    Discuss this question

  11. 11. In case a person who is resident in India becomes an NRI, will he be required to change the status of his demat account from Resident to Non-Resident?

    As per section 6(5) of FEMA, NRI can continue to hold the securities which he had purchased as a resident Indian, even after he has become a non-resident Indian, on a non-repatriable basis.

    But the existing demat account should be closed and a new account with status as NRI should be opened. All the holding can be transferred easily to the new account as long as a valid proof of purchase is provided.

    Discuss this question

  12. 12. Can an NRI nominate or be nominated in the demat account? Whether such a nominee can be person resident in India?

    Yes. Nomination in a demat account is possible in both the ways.

    • An NRI can be nominated in a resident Indian demat account.
    • An NRI can be nominated to an NRI Demat Account.
    • A resident Indian can be a nominee in an NRI Demat Account

    Discuss this question

  13. 13. What type of bank account details is to be given at the time of the NRI Demat account opening?

    The following bank accounts may be given

    • For non-repatriable - NRO [dividend/interest is repatriable]
    • For repatriable - NRE

    The above details should be provided to the broker (DP) with whom you have the demat account. The DP uses this information to directly credit dividend or interest.

    (Dividend/interest received on Investments made on repatriation and non-repatriation basis under the Portfolio Investment Scheme is not an eligible credit to NRE (PIS) Account and NRO (PIS) Account respectively).

    Discuss this question

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