Over the last ten years, investing in the Indian stock market has gained popularity among investors. This has been attributed to the various investment channels, such as mutual funds, ULIPs, and direct equity, that investors can explore. However, if you choose the direct equity route, then you are required to have a demat account.
This requirement also applies if you are an Indian residing out of the country and want to invest in the Indian market. Fortunately, opening an NRI demat account online has become more accessible, with stockbrokers and Depository Participants (DPs) offering it.
Read on to learn about demat accounts for NRIs, the best demat accounts available and how to open them online.
Opening an NRI demat account is the first step to investing in the Indian stock market, if you live overseas. Opening a secure trading account to hold and manage your investments is a good decision for you to maintain your finances.
To proceed with the NRI demat account opening processes, you must fulfil the following eligibility criteria:
NRI Status: You must hold an Indian passport or have OCI (Overseas Citizen of India) or PIO (Person of Indian Origin) status.
Bank Account: You must have a bank account in India to open an NRI trading account.
PAN Card: You need to have a PAN (Permanent Account Number) card issued by the Indian government.
To open a demat account for NRI online, you will need the following documents:
A copy of your passport with a valid visa
A copy of your PAN card
A copy of your address proof both Indian and overseas, such as a utility bill, bank statement or rental agreement
Your NRE/NRO account details
Recent passport-sized photographs
A copy of the cancelled Cheque
After you have collected the documents, you can open a demat account online. Here are the steps you can follow.
Visit the Bajaj Markets demat webpage and click on "Open Account"
Fill the form, select the account type and proceed
Upload the necessary documents, including your passport, address proof, and PAN card
Wait for the account opening process to be completed
Once your account is opened, get your login details, transfer funds to the account and start trading
You can now start trading on the Indian stock market using your NRI demat account.
Being an NRI, if you want to invest your foreign income that can be repatriated to your country of residence, you must open a repatriable demat account.
Being an NRI, you can invest in India but the earnings on these investments can’t be transferred to foreign accounts as this action is restricted.
While opening an NRI demat account is beneficial, you need to be aware of its risks. Here are a few worth noting:
Maintenance charges: Owning and operating an NRI demat account comes at a cost, levied by the financial institution you chose. These costs vary, based on the service you opt for and the benefits you enjoy.
Potential for improper trading: Online trading is possible, and quicker than ever. With demat accounts and services easily accessible on the go, it is much easier to execute trades on a whim. This can lead you to buy or sell shares inefficiently and incur losses.
Dependence on technological mastery: While demat accounts make it easier to invest and trade online, they require users to be fairly tech-savvy. This goes beyond logging in to the account and monitoring your portfolio. Depending on the platform, trading, monitoring, or any other process can be complex.
It is essential to choose the right demat account. Several options are available, each with its features and benefits. Here is the list of the few DPs with the best demat accounts for NRI investors.
Bajaj Financial Securities Limited NRI Demat Account: BFSL is a trusted name in the financial sector in India. Its NRI demat account offers features like online account opening, zero account opening charges, research reports, and a dedicated NRI helpdesk.
HDFC Securities NRI demat Account: HDFC Securities is a popular choice due to its easy-to-use platform, 24/7 customer support, and competitive brokerage rates. It also offers a wide range of investment options and research reports.
ICICI Direct NRI demat Account: ICICI Direct is another well-known name in the Indian stock market. Its NRI demat account offers features like easy online account opening, research reports, and a dedicated NRI helpdesk.
Kotak Securities NRI demat Account: Kotak Securities is a full-service broker with a strong presence in India. Its NRI demat account offers features like online account opening, research reports, and a dedicated NRI helpdesk.
While the list of the best DPs offering NRI demat accounts isn’t exhaustive, they are smart options to consider. In any case, opening an NRI demat account on Bajaj Markets is arguably your best choice, and here’s why.
No charges will be levied on opening a demat account.
A nominal brokerage charge of ₹20 will be charged per order placed
The account opening process is online and can be completed within 15 minutes
There are no Annual Maintenance Charges for maintaining a demat account
You can trade in equities and derivatives and avail of margin trade funding facilities per their investment objectives
A demat account for NRI is a way to securely and conveniently hold your securities. With no physical paperwork, you can better manage your investments and ensure financial growth stress freely.
Remember, choosing the right demat account for trading is crucial for your success as an NRI investor, so do your due diligence and make an informed decision.
Yes, you can invest in most types of securities using a demat account, including stocks, bonds, mutual funds, ETFs, and IPOs. However, please note that certain securities, such as government securities, require prior approval from the RBI before investing.
Yes, you can trade in the Indian stock market from overseas using an NRI demat account. In addition, you can buy or sell securities through a broker or an online trading platform if you comply with the regulations and restrictions set by the RBI and SEBI.
Yes, you can hold multiple demat accounts as long as you comply with the regulations set by the SEBI and RBI. However, it's advisable to consolidate your investments in one or two demat accounts to make it easier to manage and monitor your portfolio.
Yes, you can convert your resident demat account into an NRI demat account by submitting the necessary documents and complying with the KYC norms. However, it's essential to inform your stockbroker or DP about your change in status to avoid any legal or regulatory issues.
There are many Demat account providers that NRIs can choose from such as Bajaj Financial Securities Limited, HDFC Securities, and Kotak Mahindra Securities among others.
Yes, it is mandatory for NRIs to convert their Demat account to NRO category in order to continue trading
Yes, an NRI can open a Demat account by submitting the necessary documents such as PIS letter, copy of the passport, visa, etc.