Personal Finance

Complete Guide to Starting a Demat Account for NRIs with Review of Popular Options in India

Wise

13.02.24

Read time 2 minutes

India's economic growth and diversification have made it a compelling investment destination for Non-Resident Indians (NRIs) seeking to grow their wealth through the investment opportunities available in India.

Guide to NRI Investment Options in India

One of the most efficient ways for NRIs to participate in the Indian markets is by opening an NRI Demat account.

What is an NRI Demat Account

A Demat account (short for dematerialized account) is a secure online facility to hold stocks, bonds, and other financial securities in electronic form. An NRI Demat account is a specialized Demat account designed for Non-Resident Indians (NRIs) who wish to invest in the Indian stock market.

Can NRIs hold a Demat Account in India

Yes, NRIs are permitted to open and operate Demat accounts in India. This allows them to participate in the Indian stock market and invest in a wide range of securities.

Types of NRI Demat Accounts

NRIs typically open two types of Demat accounts, working in tandem:

Repatriable Demat Account: Linked to an NRE (Non-Resident External) bank account. Allows funds to be freely transferred in and out of India.
Non-Repatriable Demat Account: Linked to an NRO (Non-Resident Ordinary) bank account. While funds can be transferred in, there are restrictions on the amount you can repatriate back out of the country.

How to Open an NRI Demat Account

Choose a Broker/Depository Participant (DP): Select a registered stockbroker or DP that offers NRI Demat services. Research their reputation, fees, and platforms offered.
Complete the Application Process: Fill out the account opening forms and KYC documents, submitting them to your chosen DP.
Link NRE/NRO Bank Account: Provide your chosen NRE or NRO bank account details for seamless transactions.
Portfolio Investment Scheme (PIS) Approval: Obtain the necessary PIS approval from the Reserve Bank of India (RBI) through your designated bank. This approval is mandatory for NRIs investing in the Indian stock market.

Documents Required for NRI Demat Account

Typical documents include:

Proof of Identity: Passport, PAN Card, Aadhaar Card (if applicable)
Proof of Address: Overseas residence proof (utility bill, bank statement)
NRE/NRO Bank Account Details: Statements and documentation
PIS Letter: Obtain a PIS letter from the designated bank
Photographs and Signatures: As per the DP's requirements

NRI Demat Account Charges

Fees associated with NRI Demat accounts generally include:

Account Opening Fees
Annual Maintenance Charges (AMC)
Custodian Fees
Transaction Fees (for buying and selling shares)

These charges vary based on provider.

Guide to Popular Demat Accounts for NRIs

To review the costs and features associated with popular provider, check out our guide to the top demat accounts for NRIs.

SBI NRI Demat Account	Sharekhan NRI Demat Account
HDFC NRI Demat Account	Zerodha NRI Demat Account
ICICI NRI Demat Account	Groww NRI Demat Account
Axis NRI Demat Account	Upstox NRI Demat Account

Managing Demat Account from Abroad

Most Depository Participants provide online platforms and mobile apps that enable NRIs to monitor their Demat accounts and execute transactions remotely. Ensure you inquire about the available features before account opening.

💸⇒₹ Funding NRI Demat Account from abroad: Save when you use Wise
Wise offers a fast, easy, and low-cost way to send money directly to NRI accounts in India. Transparent Fees: Wise has a clear fee* structure, so you'll always know exactly how much your transfer will cost. Mid-Market Rates: Get the exchange rate you see on Google, unlike the marked-up rates offered by banks. Fast Transfers: Funds can often arrive within minutes on popular transfer routes. Sign up for Wise today and see how much you could save on your next transfer to India 🚀

💸⇒₹ Funding NRI Demat Account from abroad: Save when you use Wise

Wise offers a fast, easy, and low-cost way to send money directly to NRI accounts in India.

Transparent Fees: Wise has a clear fee* structure, so you'll always know exactly how much your transfer will cost.

Mid-Market Rates: Get the exchange rate you see on Google, unlike the marked-up rates offered by banks.

Fast Transfers: Funds can often arrive within minutes on popular transfer routes.

Tax Considerations for NRIs Investing in India

Income Tax: Investment income in India may be subject to taxation as per Indian tax laws.
Capital Gains Tax: Both short-term and long-term capital gains tax may apply to profit from selling assets in India.

Important: It's strongly advised to consult with a tax expert to fully understand the tax implications of investing in India as an NRI.

Simplify your entire NRI financial life with Wise

Wise offers an ideal alternative to banks for global expats with roots abroad. Take a look at the Wise multi-currency account available for residents living in supported countries. Enjoy an account as worldly as you are and spend just like a local when you travel abroad with a linked debit card, while also paying less in fees.

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*Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information.

This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.

We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.