HDFC NRI Demat Account: Investing in India from Abroad

HDFC is one of the most popular banks in India with ample services for Non-resident Indians (NRI). One of the bank’s offerings is a Demat account which lets NRIs invest in the Indian stock market. Read on to learn more about how to open an NRI Demat account with HDFC bank.

Can NRIs open a demat account in HDFC?

Yes, NRIs can open a Demat account with HDFC, as long as they comply with banking and FEMA regulations. NRIs do not need specific permission from regulators like the Reserve Bank of India (RBI) or SEBI to open a Demat account. NRIs can open either repatriable or non-repatriable accounts, depending on if they intend to send the money to their residence abroad. Opening a Demat account is especially easy for existing HDFC NRI customers.¹

Overview of HDFC Demat Account for NRIs

A Demat account lets you hold the electronic securities certificates purchased from the Indian stock market. The account works in conjunction with a trading account to complete your share purchases. HDFC offers four different types of Demat accounts for its customer:

• HDFC Bank Standalone Demat A/c - This account is ideal for resident Indian investors with accounts in HDFC Bank. They can open an HDFC Securities Trading account and link this account to their standalone Demat account.²
• HDFC DigiDemat 2-in-1 Demat & Trading A/c - This account lets you open a trading and demat account together if you already have a resident savings account. You can link the savings account to this account to facilitate easier purchase and trading in stocks and securities.³
• HDFC SmartInvest 3-in-1 A/c - This account offers savings, demat, and trading facilities in a single account. Thus, you can manage your savings, invest, create your portfolio, and gain exposure to the securities market.⁴
• HDFC Equities and Derivatives 4-in-1 A/c - This account offers comprehensive services that links your savings, demat, trading, and PIS accounts to allow for easy movement of funds and shares.⁵

One of the major benefits of opening a Demat and trading account is that NRIs can participate in Initial Public Offerings (IPO) in India. To take full advantage of perks, NRIs can open the HDFC Smart Invest 3-in-1 and HDFC Equities and Derivatives 4-in-1 accounts because these accounts offer the ability to complete the purchases from end to end. The HDFC DigiDemat 2-in-1 Demat and singular Trading account facility is not presently available to NRIs.⁶

Features of the HDFC Demat Account for NRIs

NRIs can benefit from the features of the HDFC Demat Account for the following reasons:⁷

• Easy to access HDFC Securities InvestRight mobile app.
• Can invest in equities, IPOs, derivatives, and bonds. ETFs, mutual funds, futures and options.
• Comprehensive delivery-based trading facilities available on the NSE and BSE.
• PIS transactions online facilities.
• NRIs can invest through repatriable and non-repatriable funds.
• Dedicated customer care facilities are available to NRI investors.
• Seamless transactions between HDFC accounts.
• Same-day direct payout of funds available.
• HDFC Demat accounts offer SSL security with 128-bit encryption.

HDFC makes it simple to invest, but the risks with market exposure are still borne by the accountholder.

Steps to manage and operate the Demat account from abroad

Here are the steps to manage and maintain a HDFC Demat account when you live outside of India:

• Open a demat account - NRIs can open a Demat account from abroad with HDFC Bank subject to compliance with FEMA and PMLA regulations.
• Obtain a PIS License - NRIs must get the Portfolio Investment Scheme (PIS) license to operate a Demat account in India.
• Link your NRE/NRO accounts - NRIs can link their Non-resident External (NRE) or Non-resident Ordinary (NRO) accounts with the Demat account. NRIs don’t qualify for resident savings account in India. The HDFC Smart Invest 3-in-1 and Equities and Derivatives 4-in-1 accounts automatically link with the desired NRI account.
• Easy management through Net Banking - Investors can operate their Demat and trading accounts through the online portal or through the HDFC Securities app.

How to open demat account in HDFC for NRIs

NRIs can open an HDFC Demat account online or in-person. The online method is easier for NRIs who are currently abroad, but in-person can be an option if they are visiting India. While NRIs can be a primary customer, OCIs and PIOs can also use the online portal to apply for a Demat account. Existing HDFC customers will find the processes simple to open an account.⁸

To open a Demat account, you must either have an existing NRI account with HDFC or open a new one if this is your first time working with the bank.

In-person

NRIs can visit an HDFC Bank branch that has NRI services to complete the Demat account opening process. This means completing the application form and submitting the photocopies of the necessary documents. A branch representative should be able to walk you through the process and inform you of any other requirements.

Online

1. Visit the HDFC Securities NRI website
2. Complete the form with your details on the right side of the screen.
3. Await contact from a HDFC securities representative.
4. Provide necessary documents to open your account.
5. Complete the necessary forms such as a PIS to be able to buy and sell shares.

The HDFC securities representatives should be able to walk you through the online process. It is a good idea to have your documents ready as PDFs beforehand. Check out the section below for the documents you may need.

Documents Required

You must provide two copies of self-attested documents with your account opening forms:

• Passport sized photos
• PAN Card
• Valid Passport
• Visa abroad (if applicable)
• Valid OCI card
• Overseas Address proof such as a utility bill, driver’s license, bank statement or a resident permit.⁹

NRI customers can trade in the Derivative Segment through their NRO account only and will need to submit their income proof. The documents must be attested by a notary public, court, magistrate, judge, local banker, or the Indian Embassy.

Minimum Investment Amount

NRIs must submit a cheque for ₹16,000 when opening the Demat account. The physical cheque is unnecessary if you maintain an HDFC Bank NRE or NRO account.

FATCA Declaration

US- based NRIs must sign a Foreign Account Tax Compliance Act (FATCA) declaration when opening a trading and Demat account. FATCA is to prevent account holders from avoiding taxation in their resident country on earned income from securities accounts abroad.

HDFC NRI Demat account charges

Here are the fees for a HDFC NRI Demat account:

Brokerage charges

Brokerage charges depend on the type of securities and derivatives you trade-in. Here is a complete list of the brokerage fee structure. Besides brokerage charges, you incur a stamp duty of 0.01% on the transaction value. The SEBI Turnover Tax is 0.0001%.

International transfer fees

If you choose an NRI account that is repatriable, that means you can send the funds to your resident country. This incurs the bank’s outward remittance transfer fees plus taxes:

This is solely the transfer fee and does not include any extra fees that may be hidden in the exchange rate. Often banks mark up their exchange rate and make it more expensive to capture a hidden fee. Check out mid-market rate you see on Google to understand the bank’s markup.

Deposit funds to HDFC Demat Account from abroad

NRIs can transfer funds to their NRE accounts to then send money to a Demat account. Here are the steps to add funds to your account on the mobile HDFC app:

1. Step 1: Open the HDFC Securities InvestRight mobile app
2. Step 2: Click on menu on the left hand side
3. Step 3: Tap on Fund Limit
4. Step 4: Tap on Add Funds
5. Step 5: Enter the amount you want to add
6. Step 6: Complete the transaction and the funds should be available in the account.

Use Wise to send direct transfers to your NRE account in India. With just one low transfer fee and the mid-market exchange rate, you can save money when compared to big banks. Plus the funds can be there fast and securely with the Wise app.

Withdrawing funds from HDFC Demat Account

You can sell out of your holdings and transfer funds to your NRI account. If you have opened a repatriable account, you can send the funds to your NRE account which allows for sending funds abroad. If your account is non-repatriable, then the funds can be deposited in your NRO account and kept in India.

Tax Consideration for NRIs investing in India

NRIs are liable to pay tax on realized income earned in India. The taxation slab depends on the amount of taxable income.

While tax compliance on the income earned in India is crucial, NRIs must be mindful of declaring their income in their residence country. The Double Taxation Avoidance Agreement (DTAA) benefits NRIs by taking care of the risk of double taxation from both countries. Under the DTAA, the income earned in India has tax according to the rates set in the DTAA with the relevant resident country. Speak with a tax professional to understand the implications of DTAA and its benefits to eligible NRIs.

Read more on taxes in India for NRIs in our complete guide.

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