NRIs do need a Demat account in order to buy Indian stocks, bonds, ETFs, or mutual funds on markets like the NSE or BSE. There is no way to trade on the Indian stock market without one. You need one to keep your shares online. You don’t always need to open Demat account to invest in mutual funds directly through fund houses (not markets), but having one makes it easier to keep track of your investments. A person who is not from India must link their Demat account for NRI to a Portfolio Investment Scheme (PIS) bank account, which can be NRE or NRO. There are rules, such as not trading during the day, only selling futures and options on NRO with a custodian, and following FEMA rules.
Requirements and General Eligibility
You must be an NRI (living outside of India for at least 182 days in a financial year or meeting other RBI requirements) to be eligible. NRIs living in the US or Canada may have to deal with more FATCA/CRS compliance and may need to go to India or verify their identity in person. Tourist visas are not accepted.
Linking to a bank account: You need a PIS-linked NRE (repatriable) or NRO (non-repatriable) bank account to invest in stocks.
Papers Required:
- PAN Card (required).
- A valid passport
- Address proof (foreign location
- Address proof (Indian location
- Picture taken recently.
- Proof of a bank account (NRE/NRO statement).
- For NRIs in the US and Canada: immigration stamps from the last six months and a mailing address in India.
- Tax residence certificate or FEMA statement.
How to proceed?
- Pick a broker or DP that offers NRI services.
- Send in your application form and documentation online or by mail.
- Do KYC (e-KYC if possible, or in person or by video).
- If you require it, seek RBI approval and link your PIS bank account.
- Verification will activate the account.
Kotak Securities charges for demat accounts for NRIs
Kotak Securities charges more for NRIs than for residents. NRIs can’t trade during the day, and the company focuses on delivery-based equity. Here’s a list:
- Account opening fees are Rs. 3750 (one-time) plus Rs. 1000 for linking or going offline.
- AMC costs Rs. 75 a month, while PIS costs Rs. 1000 a year.
- Fees for brokers:
- Equity Delivery: 1% of sales or 25 paise per share, whichever is larger, plus a minimum of Rs. 50 each order.
- Not allowed for NRIs throughout the day.
- Futures and Options: Not available for online NRIs; only for offline NRO with a custodian (costs not fully explained).
- Currency, mutual funds, and IPOs: not much information; brokerage is limited to SEBI limits.
Prices may change, so check Kotak’s website for the latest news or deals. With other brokers like ICICI or HDFC, opening an account is usually free and the brokerage fee is cheaper (0.5–1%), but Kotak offers banking as part of the service. Investing comes with hazards in the market; talk to an advisor.
