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What is the difference between NRI Demat and Trading Account?

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An NRI has to open 3 accounts to trade or invest in the Indian stock market. This includes:

The NRI Demat Account is used to hold securities in electronic format. The demat account is similar to a bank account but instead of holding money, it holds securities (i.e. Shares, Mutual Funds, ETFs, NCDs etc.).

The NRI Trading Account is an account opened with the stock broker. It facilitates the transactions at the stock market. The stock market investors in India can buy or sell shares only through the stock brokers.

Here are a few key differences between NRI Demat Account and Trading Accounts:

NRI Demat Vs Trading Account

  NRI Demat Account NRI Trading Account

Purpose

Account to hold securities in electronic format

Facilitates buy/sell transactions in the stock market

Account opened with

Depository - CDSL or NSDL

Stock Broker i.e. Zerodha, ICICI Securities

Charges

Debit transaction charge, pledge charges, AMC and GST Tax

Brokerage and taxes (STT, Exchange Transaction Charge, GST, SEBI Fees and Stamp Duty)

Account Types

NRI Repatriable (NRE PIS)

NRI Non-Repatriable (NRO Non-PIS)

NRI Repatriable (NRE PIS)

NRI Non-Repatriable (NRO Non-PIS)

Joint Account

Yes

Yes

Online Account

Yes

Yes

Nomination

Yes

Yes

Delegation through Power of Attorney

Yes

Yes

Charges when account is not in use

Yes, Annual Maintenance Charges (AMC) is charged irrespective to uses

No

Required for Derivatives Trading in Equity, Currency

Yes for Equity derivatives (Due to mandatory physical settlement of stocks on expiry)

Yes

Note:

  • Demat and trading account charges (i.e. AMC, brokerage, demat debit transaction charges) varies by broker to broker.
  • A broker requires Demat Account Power of Attorney (PoA) to withdraw the shares from demat account when customer sells them online.



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