If you’re a NRI looking for an investment in the Indian market, opening a Demat is a must to start your investment. You do not need to come to India to open a Demat account while planning your investment. You can get in touch with an Indian stock broker who provides NRI Demat Account services directly.
The elimination of risk associated with physical certificates is the primary benefit of opening an account. You’ll get regular statements from this account, which will help you keep track of your portfolio regularly. Some brokers even allow you to buy or sell a single share, with no minimum lot requirement.
Types Of NRI Demat Account
NRE (Non-Resident External) Demat Account:
NRIs can use this account to buy or sell securities on a repatriable basis. You can only invest in the stock market using this, and you must use the Portfolio Investment NRI Scheme, or PINS, to do it. Both the principal and interest earned on an NRE Demat account are reimbursable.
NRO (Non-Resident Ordinary) Demat Account:
A non-repatriable account is used to trade non-repatriable shares, including futures and options. You don’t have to go through the PINS process when you open a Demat account under NRO, and you can repatriate up to $1 million per financial year. Furthermore, the principle amount is reversible, however, the interest earned is not.
Procedure To Open A Demat Account For NRIs:
Here is the procedure to open a Demat account:
- Compile all the necessary documents like a PAN card, details of your NRI bank account, and a PIS permission letter issued by RBI.
- Ensure that all your documents are verified by the local Indian Embassy as per the guidelines laid out by SEBI.
- Look for the best services in the market and visit their website.
- Go to the website and open a Demat and trading account.
- Fill out the account opening applications and upload scanned copies of all the required documents.
- Upon submitting the required documents, your application will be processed by the DP.
Documents Required:
Documents required to open an NRI account are as below:
- Passport
- Visa copy
- Form 60 (in case PAN Card not submitted)
- PIS Permission
- Electricity bill (last 3 months)
- Bank Statement/ Bank Passbook
- Leave and License Agreement
- Telephone bill (not more than 2 months old)
- Banker’s verification (from a Schedule commercial bank only)
- Driving license (Name, Address and photo pages)
NRI Demat Account Charges
An NRI Demat account attracts charges like a normal Demat account. NRI Demat account charges are as follows:
Account Opening Fee (One Time)
For processing the account opening application, most brokers charge an NRI Demat account opening fee. This is a one-time fee that must be paid during the Demat account opening process.
Annual Maintenance Charges (Yearly)
The Demat AMC is a cost levied by the broker to keep your Demat account active. It is a yearly fee that is levied whether or not you have made a transaction in your NRI Demat account.
Debit Transaction Charges
When you sell shares and the shares are withdrawn from your Demat account, you will be charged a fee. This fee is paid by the customer for each withdrawal from the Demat account. Some brokers charge a flat fee for each transaction, while others take a percentage of the transaction’s value.
Other Charges
Pledge Fees and a fee for changing your personal information are two more modifications for NRI Demat accounts.
Note: NRIs are allowed to open Demat accounts, but they must follow certain rules set down by the Foreign Exchange Management Act (FEMA). For NRIs, the Indian equities market offers significant options. NRIs desire to invest in India’s stock markets to be a part of the country’s success story.
NRIs must obtain a PIS (Portfolio Investment Scheme) approval from the RBI to engage in India’s secondary market, according to FEMA standards. Because any investment made through NRI accounts must be disclosed to the RBI, PIS permission is required.
Conclusion
An NRI Demat account is the ideal approach to keep your stocks safe if you want to grow money with them. Even though the process is simple and everything can be done online, it is recommended that you use Demat services from a reputable fintech provider. After all, keeping track of so many obligations while also adhering to rules can be exhausting.