Demat Account

NRI Trading Account

NRI Trading Account

What do you mean by a Dematerialized account?

Dematerialized account is also known as a Demat account. Today many brokers provide you with online demat accounts in India. It is an electronic account where you can hold and manage all of your shares as an investor. You can start a demat account by opening on with a broker or a bank. You will need a PAN (Permanent Account Number) card to open it. It takes a couple of days after you purchase a share for it to be seen in your account.

The shares you buy will get credited to your account a few days after you buy. Although it is easier to receive your information about you shares through your demat account, you can still receive it physically too.

If you decide to receive your information in dmat mode, then you will need to mention the name of the DP (depository participant) in the application for dmat in India. It would be a good idea to receive it in demat form because physically, you face a risk of the information being forged or fake. If you want to purchase and sell stocks, a demat account is necessary.

Why do NRIs need a Demat Account?

Today, most trades have to be put through in demat form. Even though the SEBI has let trades of around 500 shares be put through in physical form, it is a lot easier and a lot more accurate in demat form. When trading and investing, a demat account is needed.

What is the difference depository and a depository participant?

A depository is an account where stocks and shares of investors are kept electronically. The people who work and manage these depositories are DPs (depository participants). You can relate a depository to a bank. The place where all the information about all the accounts is like a depository. The different branches that give to the individuals are the DPs. The two depositories in India are the NSDL and the CDSL.

Please checkout some reliable Trading/Demat brokers for NRI – PIO – OCI:

www.NriDemat.com

www.NriInvestmentsIndia.com

8 thoughts on “Demat Account

  1. So does this mean if I am in the USA can I still open a Demat Account and use the same to buy and sell shares in the Indian stock market?

    Besides this the information given on this website is really helpful.

    Thanks.
    Ajay

  2. Basis : non-repatriable

    2 Demat accounts are req’d to be opened !
    One for IPO / MF
    Other one for PIS

    Service charges for 2 demat a/c and PIS charges – about Rs 5,000 pa

  3. You should try opening NRO pis NRI trading account.
    You may simply use the contact form on the right in that website to email question related to demat charges and other related dematerialisation queries.

    Regards
    Hari

  4. I already have a PIS and Demat account with a leading bank and trading in shares, can i open another one with another bank without which has online trading facilities? without closing the earlier one?

  5. It is surprising that in Australia there are no such conditions for anyone wanting to invest in investment property or overseas non residents. Even the Australian banks will lend upto 80% of the property purchase price for non resident property purchases in Australia.
    Rob

  6. I am holding NRE shares and wants to demat these physical shares

    Can I open an NRO demat+ PI account.

    I do not want to repatriate funds from selling these shares.

  7. I am new in online Stock trading world. So I have lot of questions to ask. I really have no idea how these things work, but I want to learn it for investment.
    How is this website: http://www.learn-trade.com

  8. When an Indian broker says “No problem”, he is right because there is no objection from the Indian side.

    But the problem comes from the US side. No, USA wouldn’t stop you from investing anywhere except from some named countries.

    The problem is not for you, but for the financial institution who accepts money from you. Institutions who accept money from US Citizens and long-term residents,are needed to file annual reports on the income received by such people.

    This an unnecessary burden on foreign firms, not to speak of huge fines and unnecessary litigations if the account holder runs foul of any US laws. Until now Forex was untouched, but Forex too is affected from 2010.

    Indians were not aware of this until now because only US IRS had a presence in India. But from 2011, Indian ITD will be opening offices in some US cities and that means reciprocal information exchange and stricter application of rules.

    Everybody thinks US is a free country so we can invest anywhere any time and will think these measures draconian. May be Indian government doesn’t care much about money laundering but US government do.

    That is why they allow Mutual Funds and ETFs to invest in India but pass restrictions on individuals.

    When foreign brokers can make money without US residents, why should they undertake unnecessary headaches that Swiss bank had to recently?

    But these laws are not against Indians. It is against all foreign investments by Individuals.

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