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A Demat account is mandatory for investing in the stock market in India for residents and NRIs. An NRI is an individual who resides in a foreign country for 183 days or more in a financial year. NRIs can trade in bonds, stocks, IPOs, mutual funds, and more, through NRE/NRO Demat account. All NRI transactions are governed by FEMA regulations.
Key Takeaways
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Under the FEMA regulations, NRIs can open both NRE and NRO Demat accounts to invest in the Indian share markets.
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It is vital to close the resident account before opening the NRI Demat account. The holdings can be transferred via DIS Slip.
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Other than secure, paperless, online global trading, NRI Demat accounts offer portfolio diversification and controlled risks.
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Charges such as annual maintenance, transactions and broking are applicable when opening a demat account for an NRI. However, the price may vary across brokers.
Also, read What is Demat Account here.
What Does a Demat Account for NRIs Do?
The Indian stock market offers lucrative investment opportunities to global investors. Seeing the growing interest from NRI investors to invest in the Indian market, several stockbrokers in the country have started catering to the NRI segment. Using a Demat account, one can trade online securely.
However, an NRI Demat account differs from a Demat account available to general Indian investors. For NRIs, the types of Demat accounts offered are repatriable or non-repatriable.
You can open both NRE-Demat and NRO-Demat accounts with Angel One. Understanding which type of NRI Demat account is suitable for you is essential to selecting the right option. Below are some points to remember.
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Permanent NRI, without any residential holding in India, should open an NRE account that allows fund transfers from Indian bank accounts to foreign ones.
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If you are a Resident Indian and moved to another country without having a Resident demat account, then you directly open an NRE/ NRO account.
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If you are a Resident Indian and have moved to another country with a Resident demat account, you must close your existing Demat account and open an NRE/NRO Demat based on your needs. Direct conversion of an existing Demat to an NRI Demat is not allowed. Once your new NRI Demat gets activated, you can shift your current holdings to the new account.
Also, read Types of Demat Account here.
Understanding NRI PIS and Non-PIS Accounts
The following are the 2 types of NRI trading accounts.
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Portfolio Investment Scheme (PIS) Account: In order to invest in Indian equity shares on a repatriable basis, NRIs need a PIS (Portfolio Investment Scheme) account linked to their NRE account. This Demat account is regulated by the Reserve Bank of India (RBI). It ensures all transactions follow foreign exchange rules. Under this system, NRIs must carry out their stock market trades through the PIS account, and every buy or sell transaction is reported to the RBI. it is important that all these trades are carried out under the guidance of trusted financial institutions.
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Non-PIS Account: This type of account is used for investing in Indian stocks on a non-repatriable basis through an NRO (Non-Resident Ordinary) account. It’s ideal for NRIs who want to invest in India but don’t plan to send the money back to the country where they currently live.
Also, read What is SIP Investment here.
Benefits of NRI Demat Account
There are certain advantages to opening a Demat account for NRI –
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You can invest in the Indian stock market online quickly and easily from anywhere in the world without the cumbersome process of physical documentation.
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The transactions are fast and efficient and are immediately reflected in the Demat account.
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There is a minimal risk of loss of physical documentation, forgery, delayed delivery and other such issues related to transactions with the NRI Demat account.
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The minimum capacity for the NRI Demat account is as low as one share.
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You can diversify your portfolio by investing in various investment instruments - ETFs, shares, mutual funds, convertible debentures, etc.
Also, learn the Importance of NRO and NRE accounts here.
Features of NRI 3 in 1 – PIS + Demat + Trading Account
With an online NRI Demat Account, managing investments in India becomes easy and far more simplified for NRIs. As it is connected directly to the NRE PIS or NRO bank account, fund transfers and quick settlement of trades become smooth and effortless. Investments can be done in different segments, such as equities, bonds, and ETFs, helping you build a well-diversified portfolio.
With a secure online trading platform, you can trade anytime, anywhere using your phone or computer. You also get access to real-time market updates, research insights, and charting tools to make smarter decisions. Every transaction follows RBI and SEBI rules, ensuring full compliance and transparency.
Your securities are safely stored in digital form. This eliminates the risk of losing physical documents. The dematerialisation process makes managing investments easier, and IPO allotments are credited directly to your account quickly.
Altogether, an NRI 3-in-1 account (PIS + Demat + Trading) is a complete and hassle-free solution for NRIs who want to invest in India confidently.
Types of NRI Demat Accounts
When it comes to investing in India, there are mainly two types of Demat accounts for NRI investors, with specific purposes of their own.
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Repatriable Demat Account: The first is a Repatriable Demat Account, which is linked to your NRE (Non-Resident External) bank account. This type of account allows you to move your money freely in and out of India. So, if you earn profits from your investments, you can easily transfer those funds back to your country of residence without any restrictions. It’s ideal for NRIs who want flexibility in managing their overseas income.
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Non-Repatriable Demat Account: The second is a Non-Repatriable Demat Account, which connects to your NRO (Non-Resident Ordinary) bank account. Here, you can invest money earned in India, such as rent or pension. However, there are limits on how much you can transfer abroad.
Both types of Demat account for NRI investors make it easy to manage and grow your investments safely in India.
Account Opening Procedure for NRI
All primary banks, stockbrokers and mutual fund houses, including Angel One, offer NRI Demat Account opening services. Here is the account opening process followed for NRIs.
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If you already have a Demat and trading account, you must submit two closure forms to close both these accounts.
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Once done, fill the form to open an NRE/NRO demat account and submit it with the required documents.
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Once your NRE/NRO Demat account is open, a second closure form for closing the demat account is required to transfer all your existing investments to the new NRI Demat through DIS Slip.
Check How to Open NRI Demat Account in detail here.
Documents Required for NRI Demat Account
Following are the documents required for an NRI Demat Account;
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PAN Card, Aadhaar Card (if applicable)
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Overseas residence proof (utility bill, bank statement)
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Passport and Visa
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NRE/NRO bank account statements and documentation
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Obtain a PIS letter from the designated bank
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Photographs and signatures as per the DP's requirements
NRI Demat Account Charges
Even the best Demat account in India for NRI will attract costs. The central depositories and the broker charge these Demat accounts and transaction-related fees. There are also government taxes that NRIs pay for their Demat account. The account charges for Demat account for NRI are as follows:
1. Account Opening Charges
The Account Opening charge covers the processing and opening costs of one’s Demat account with the broker. It is a one-time fee paid at the initial level. A broker may discount or waive the charges to attract more customers.
2. Annual Maintenance Charges (Yearly)
The broker typically attaches an annual charge to the Demat to maintain the account and offer related services. It is called AMC or Account Maintenance Charge. Depending on business policies, a broker may charge an AMC for the NRI Demat accounts. You may confirm the rate with your broker before opening an account.
3. Debit Transaction Charges
A small fee is charged whenever shares are sold or withdrawn from one’s Demat account. Depending on your broker, it can be a flat fee or a percentage of the trading volume.
4. Brokerage Charges
A brokerage charge is a commission the broker collects for executing transactions and offering specialised services to investor clients. The brokerage charges vary between brokers. Angel One charges its NRI customers a brokerage fee of 0.50% on transaction turnover or 0.05 per unit, whichever is lower for equity delivery.
Calculating Brokerage on NRI account
Scenario 1: Mr A bought 1000 shares of ABC Ltd at ₹9 each, and his brokerage was allotted 0.50% in delivery, and the upper limit was kept at ₹ 10/- then the calculation would be.
Delivery brokerage:
(Quantity*brokerage rate) i.e. 0.05*1000 = ₹50 ( Charged on Quantity as the traded price was less than the upper limit of ₹ 10)
Scenario 2: Mr A has bought 1000 shares of ABC Ltd at ₹11 each and his brokerage was allotted 0.50% in delivery, and upper limit was kept on Rs. 10/- then the calculation would be.
Total delivery brokerage: (0.50% on Transaction turnover) i.e. 0.50% of 11000 (1000 Qty*11 Traded price) = ₹55 (Charged on Transaction turnover as the traded price was more than the upper limit
Minimum Brokerage
As per the agreed brokerage slab, if generated brokerage is less than ₹30, you will be levied an additional brokerage up to ₹30 or 2.5%, whichever is lower in a particular segment.
X has bought three shares of ABC Ltd at ₹100 in delivery, and the brokerage slab in delivery was agreed at 0.40%.
Total Transaction Volume: 3*100 = ₹300
Brokerage calculation: 0.50% of ₹300 = ₹1.5
The maximum limit is 2.5% of turnover volume: 2.5% of ₹ 300 = ₹7.5
In the example above, the maximum turnover at 2.5% is less than ₹30. Hence the client will be charged ₹7.5 only.
If 2.5% of the turnover is more than ₹30, then the client will be charged ₹30 only. (This would be applicable segment-wise.)
Managing Demat Account from Abroad
Most brokers, including Angel One, now provide easy online platforms and mobile apps that allow NRIs to manage their Demat account anytime, anywhere. You can track your portfolio, monitor market trends, and make trades in just a few clicks. Before opening your Demat account, it’s always wise to check what digital features and tools your broker offers for a smooth and convenient experience.
When funding your Demat account from abroad, it’s important to choose a secure and cost-effective transfer method. Many NRIs prefer using trusted global money transfer services that offer transparent fees, fair exchange rates, and fast processing times. These platforms help you move funds quickly to your Angel One Demat account without worrying about hidden charges or delays.
With the right broker and reliable transfer options, managing your Demat account as an NRI becomes simple, efficient, and completely hassle-free.
Unlock Your Investment Potential with an NRI Demat Account
Opening a Demat account for NRI is a smart way to start investing in India’s fast-growing financial markets. It gives you access to a wide range of investment options, including shares, bonds, and mutual funds, helping you build and manage your wealth from anywhere in the world.
A Demat account makes investing easy, secure, and completely online. You can track your portfolio, trade efficiently, and take advantage of India’s expanding economy without the hassle of paperwork.
If you’re an NRI looking to grow your assets and stay connected to the Indian market, opening a Demat account for NRI is a great first step towards achieving your long-term financial goals.
Conclusion
A Demat account is the only way to invest in the Indian stock market for NRIs. However, opening and operating a Demat account for NRIs is different to that for resident Indians.