An NRI Trading Account allows Non-Resident Indians to invest/trade online in Stocks, Stock Derivatives, IPOs, Mutual Funds, and Bonds at Indian stock exchanges i.e. BSE and NSE.
An NRI Trading Account allows Non-Resident Indians (NRIs) to invest/trade online in Stocks, Stock Derivatives, IPOs, Mutual Funds, and Bonds at Indian stock exchanges i.e. BSE and NSE. This account is a must for NRIs looking to invest in the stock market listed companies in India.
In addition to the NRI Trading Account, an NRI also need an NRI Bank Account and NRI Demat Account to invest in Indian Stock Market.
As per the government regulations, NRIs are only permitted to invest/trade in equity and equity derivatives. They are not permitted to trade in Currency and Commodity derivatives. NRIs are also not permitted to do intra-day trading in India.
An NRI Trading Account can be opened with a stock broker like Zerodha, ICICI Direct, and HDFC Securities for online trading. Each trading account has a unique trading ID, which is used for conducting transactions.
The trading account facilitates the online stock market investments. It is in the middle of all the stock market transactions performed between a Bank Account, a Demat Account, Stock Exchange and the NRI investor, as shown in the below diagram.
Note: In Equity Derivatives trading, the broker sends the contract note to the Custodial, who settles the trade on behalf of the customer.
NRI trading account are classified into 2 types:
An NRI 3-in-1 account is an integrated account combining of 3 accounts; an NRI Trading Account, an NRI Demat Account, and an NRI Bank Account. Some brokers also call it NRI 4-in-1 account as they open 2 bank accounts; PIS and Non-PIS bank account.
Read NRI 3-in-1 account and PIS Account to know about it in detail.
The 3-in-1 account offers the most convenient way to invest in the Indian Stock Market. All the transactions between the 3 accounts are seamless and taken care by the bank offering the 3 in 1 account.
The 3-in-1 account is offered by the banks in India. This includes ICICI, HDFC, SBI, Axis Bank, Yes Bank, etc.
An NRI 2-in-1 account combines an NRI Trading Account and an NRI Demat Account. These accounts are mostly offered by brokers who don't have a banking license i.e. Sharekhan, Zerodha. NRIs need to open PIS, NRE & NRO savings bank accounts on their own before opening a 2-in-1 account.