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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 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:
Topic: NRI Demat Account Defenition
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