NRI Trading Account in India, Pricing, Questions for 2017
Check this detailed article on NRI Trading in India with answers on some crucial questions people have to go along with top Stock brokers for NRIs in India.
NRI Trading in India
Indian stock market is booming and this is the best of the times to invest and trade, even if you are not living in India. In this article, we will talk about the complete procedure for NRIs to start trading in the Indian stock market along with details on pricing and frequently asked questions (FAQs). Lets start with the basics first:
Who is an NRI (Non-Resident Indian) ?
An NRI or Non-Resident Indian is someone who holds an Indian passport but has moved to a different country on a temporary basis for 180 days or more.
How does an NRI start trading in the Indian Stock Market?
There are 2 ways to do it:
Get an NRE account
An NRE or Non-resident external account is an account by which NRIs can transfer their assets earned in the foreign country to an Indian account of rupee denomination. The principal amount transferred and the interest earned can always be repatriated. However, if you own just the NRE Account, then you would need to go through the PIS (Portfolio Investment Scheme) route which allows NRIs to buy and sell shares or debentures of Indian companies listed on a recognized Indian stock exchange. An NRE account allows you to trade in Equity segment only.
Get an NRO account
An NRO or Non Resident Ordinary account is the one that allows you to save your Indian rupee earnings even though you you do not stay in India. With an NRO account, you don’t need to do any PIS formalities and you can trade across Equity as well as Derivative segments.
What documents does an NRI need to open an NRE/NRO account?
The following documents are required to open an NRE/NRO account:
- A Valid Indian Passport
- In case of a foreign passport, place of Birth mentioned must be India
- PAN card
- Overseas address proof (driving license, utility bills, bank statement, notorized copy of rent agreement)
- Passport sized photograph
- a cancelled cheque
- Proof of respective bank and depository accounts
In case of NRE Account, client needs to provide PIS permission letter from the designated bank (not required for NRO account)
What to post account opening to get started with Trading?
Almost done, really! Now you need to link up your NRO account with the trading/demat account, assuming you have one. If you dont own a trading account yet, there are few things you need to take care of while choosing a stock broker for yourself. Once your trading account is activated, this needs to be linked up with the NRO account.
Once you have linked in the NRO bank account with your trading account, the funds can be transferred to the latter as and when required.
Any specific things to take care of while trading?
Yea, there are few aspects that you need to consider while trading in the Indian stock market, such as:
- No trading allowed in currency or commodities segments.
- Even within Equity, NRIs are allowed to trade on delivery basis and not at intra-day level.
- NRIs can hold more than 10% holdings in the stock of any Indian listed company.
- You can open separate trading accounts based on NRE and NRO accounts.
There could be few more aspects that get introduced on a timely basis.
Stock broker(s) that is known well for NRI trading?
there are only a handful stock brokers that offer NRI trading with utmost ease. Here are those listed:
Zerodha, is definitely, one of the most prominent discount stock brokers in India. As far as NRI trading is concerned:
Prostocks, is a recent entrant is the stock broking space in India but has been able to gain a lot of attention, especially because of its pricing.
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