An NRI Demat account is a Demat account for NRIs/ PIO &OCI Cardholders to keep securities such as Stocks, Mutual Funds, Bonds, etc. in electronic format. As per RBI guidelines, NRIs have to open two separate Demat accounts – repatriable and non-repatriable account – for repatriable and non-repatriable investments. An NRI repatriable Demat account is an ordinary Demat account with a sub-status as ‘NRI Repatriable’. An NRE repatriable account is mandatory for NRIs to invest their foreign earnings in the Indian stock market.
NRI Repatriable account meaning
There are two types of bank accounts for NRIs i.e. NRE (Non-Resident External) and NRO (Non-Resident Ordinary). You can open an NRE account to manage your overseas earnings. The funds in this account are fully repatriable i.e. can be transferred abroad.
Key features of NRI repatriable Demat account:
- NRI repatriable Demat account needs to be linked with an NRE bank account.
- This account is also called an NRE Demat account and/ or repatriable Demat account.
- All the proceeds from the sale of securities and profits from investments can be transferred abroad.
- NRIs have to open 2 separate Demat accounts for investments on repatriable and non-repatriable basis.
NRI Non-repatriable Account Meaning
An NRO account is used to manage the Indian income of NRIs such as rent, dividend, pension, etc. An NRO account is legally a non-repatriable account. However, after May 2012, the RBI allowed NRIs to remit up to USD 1 million per financial year from an NRO account after payment of applicable taxes.
Key features of NRI non-repatriable Demat account:
- An NRI Non-repatriable Demat account must be linked with an NRO bank account only.
- This account is also called an NRO Demat account and non-repatriable Demat account.
- All the proceeds from the sale of securities and profits from investments can’t be transferred abroad. Funds up to $ 1 million can be transferred abroad.
What is the Difference between NRE and NRO Account?
NRE vs NRO Demat account
For investments on a repatriation basis, open an NRE Demat account and an NRO Demat account for investments on a non-repatriation basis.
|Details||NRE Demat Account||NRO Demat Account|
|Type of linked bank account||The account is linked to NRE Bank account (PIS or Non-PIS)||NRO Demat account is linked to the NRI Non-PIS account|
|Purpose||For investments on a repatriation basis||For investments on non-repatriation basis|
|Fund repatriation||Fully repatriable||Proceeds from the sale of securities and profits from investments can be repatriated post payment of taxes. Funds up to $1million can be transferred abroad.|
How to Open NRI Demat Account
There are basically two ways to open an NRI Demat account.
- Open an NRI Demat account at a bank/ stockbroker or depository participant (DP)
- Open an NRI Demat account online with SBNRI
Open NRI Demat account with stockbroker/ bank/ DP
While the application process may vary from broker to broker or bank to bank, here is the common process and documents. You need to fill in the NRI Demat account opening form and submit it to the respective office along with required documents as under:
- Filled account opening form signed by the applicant
- Self-attested photographs of all the applicants
- PIS permission letter from the bank
- PAN Card
- Overseas address proof of the applicant
- Cancelled cheque of the linked NRE/ NRO bank account
- Photograph and signature of the nominee
All the documents should be self-attested and notarized by the Indian Embassy or any competent authority.
NRI Repatriable Investment
NRIs can invest in Indian market through portfolio investment scheme or PIS. Such transactions are routed through their NRE/NRO savings accounts. NRIs can invest in various asset classes including stocks, bonds, NCD, mutual funds, etc. on repatriable basis by using their PIS-enabled NRE account linked with demat and trading accounts.
It is not mandatory for NRIs to have a demat account to invest in mutual funds in India whether repatriable or non-repatriable basis.
Open NRI Demat account using SBNRI app
SBNRI is a corporate partner of IIFL Securities and offers NRI Demat account opening services. You can open NRI Demat account as well as an NRI bank account through SBNRI App in a few simple steps as under:
- On the SBNRI App home page, click on “Open Demat Account“
- Make the one-time payment of INR 2151/-
- Upload your documents and click on “Submit“
- Your PIS/Non-PIS account will be opened in 3-5 working days, if all requirements are fulfilled
- After a video KYC, IIFL Securities will open the Demat & trading account (5-7 working days)
- All your trading will be taking place on the App (platform) of IIFL Securities
Before investing in the Indian market, NRIs must consult market experts to make informed decisions. You can get investment advisory from experts at SBNRI. Download SBNRI App from the Google Play Store or App Store to ask any questions related to NRI Demat account, NRI investment, NRI account opening and tax filing in India. To ask any questions, click on the button below. Also visit our blog and YouTube channel for more details.
An NRI Demat account’s charges and fees are similar to a resident account. Some key charges as under:
– NRI Demat account opening fee
– Annual maintenance charges
– Debit transaction charges
Yes, US-based NRIs can open a Demat account and invest in the Indian stock market. However, there are limited investment options for NRIs from the USA and Canada due to complicated compliance under FACTA.
Yes, an NRI can open as many Demat accounts as he/ she wants, including NRE Demat account and NRO Demat account.
The company issues shares on the basis of specific or general permission from the RBI/ Government of India. Hence, an NRI is not required to obtain any permission.
NRIs can trade in shares of Indian companies listed on recognized stock exchanges on repatriable and no-repatriable basis.
To invest on repatriable basis, they need to open a demat account linked to NRE savings account, which is know as a repatriable demat account.
Your demat account must be linked to your NRE savings account that shows sub-status as “NRI repatriable”.