How to open an NRI Trading Account in India?

The Indian stock market has reached its peak and it is the best time to invest and trade even if you do not live in India. In this article, we will talk about the prices and frequently asked questions along with knowing the complete process to start NRI trading in the Indian stock market.

Also, if you do not know about the Indian stock market, then you can read about Share Market Knowledge.

First let's start with the basic elements:

Who is an NRI (Non-Resident Indian)?

An NRI or Non-Resident Indian is a person who holds an Indian passport but has migrated to another country on a temporary basis for 180 days or more.

How can an NRI start trading in the Indian stock market?

There are two ways to do this:

Open an NRE Account

An NRE or Non-Residential External Account is an account through which NRIs can transfer their foreign deposits to an Indian Rupee account.

The principal amount and the interest amount sent to the account can also be called back.

However, if you are an NRE-only account holder, you will have to go through the PIS (Portfolio Investment Scheme) route to buy/sell shares and debentures of Indian companies listed on a recognized Indian stock exchange.

An NRE account allows you to trade or trade only in the equity sector.

Open an NRO Account

An NRO or Non Resident Ordinary Account is one that allows you to add money to your account in Indian currency even if you are not resident in India.

In NRO account you also do not have to go through the PIS process and you can trade in Equity as well as Derivatives segment or sectors.

What are the documents required by an NRI to open an NRE/NRO account?

The following documents are required to open an NRE/NRO account:

• A valid Indian passport
• In case of foreign passport, the place of birth should be India
• Pan card
• Proof of foreign address (driving license, utility bill, bank statement, notarized copy of rent agreement)
• Passport size photo
• A canceled check
• Proof of relevant bank and depository accounts
• In case of NRE accounts, the customer has to provide PIS permission letter from his appointed bank. (This is not required for NRO accounts)

What to do to start trading after account opening?

Now all your work is done, for sure!

If it is assumed that you have a Trading/Demat account available with you then now you need to link your NRO account with your Trading/Demat account.

If you do not have a trading account yet, then you have to keep a few things in mind while choosing your stockbroker on your own. Once your trading account is activated or activated, you need to link it with your NRO account.

Once you have linked your NRO bank account with your trading account, you can transfer or remit funds to your trading account anytime as per your requirement.

Are there any special things we have to keep in mind while trading?

Yes, while trading in the Indian stock market, we have to keep some aspects in mind, such as:

• Trading in currency and commodity segments is not permitted.

• Even in equity sector/segment trading, NRI investors are allowed to buy/sell shares or sell/trade or delivery trading only for a long period of time. He cannot do intraday stock trading trading in the same day.

• NRI investors can buy and hold shares of up to 10% of any listed Indian company.

• You can open different trading accounts based on NRE and NRO accounts.

• In all this some more new aspects may be introduced from time to time.

Are there any stockbrokers who are known for NRI trading?

Yes, there are many stockbrokers who offer NRI trading with utmost convenience. Some of these are:

Zerodha

Zerodha is certainly one of the leading names amongst the cheap stockbrokers in India.

As far as NRI trading is concerned:

• Zerodha allows you to link your NRE Bank accounts with Axis Bank, HDFC and Yes Bank.

• As far as NRO accounts are concerned, these can be directly linked with your trading accounts.

• In Delivery, Equity Futures and Options segment, brokerage is levied at 0.01% or Rs 200, whichever is lower.

• The same documents as mentioned above will be required to open a trading account.

Prostocks

Prostocks is a recent new competitor in the stock broking space of India but it has caught the attention of the people especially due to its low prices.

Some of its features are as follows:

• In the equity, delivery and futures segments, customers have to pay a fee of Rs 100 for each completed transaction.

• If you want to open an account in Empty Equity Delivery it is free. However, for trading in the futures and options sector, a Custody or Protection account has to be opened with a fee of Rs 1200.

• NRIs can avail the facility of free annual account maintenance or free annual maintenance by paying a refundable fee of Rs 1000.

• To open a trading account, the same documents are required as mentioned in the FAQ above.