Convert Demat Account to NRI

Resident Demat Account to NRO Demat Account


What is a Demat account?

Demat Account or Dematerialized Account Number is a special type of account which allows an investor to hold shares and stocks in the electronic form. Stocks and shares invested via a Demat account remain in the dematerialized form. The process of dematerialization is essentially the process where physical shares are converted into the electronic form.


This specific Demat account number of any individual investor has to be quoted whenever the individual wishes to make any transaction in the electronic format especially in order to accomplish trade settlements. Every individual shareholder, therefore, needs to have a Dematerialized Account in order to accomplish transactions. The Demat Account can be operated as a bank account and essentially fulfills the basic function just like any bank account such as storing money and recording all transaction entries in the bank passbook. Securities, just like cash in normal bank accounts, are held in the electronic form which is debited or credited as and when required. The Demat account can be stated with zero shares and can have a zero balance in the account as well.


NRI Demat Account Charges Comparison


Some of the basic charges associated with Demat Account include Account Opening Charges, Annual Maintenance Charges, Custodian Charges, and Transaction Charges. Though the Demat Account Charges are approximately similar, there are minor charge differentiations as mentioned below:


Particulars

ICICI Bank

Kotak Bank

Discount Brokers such as RKSV

Zerodha

Account Opening Fee

INR 4000

INR 3750

INR 250

-

Bank Account AMC

INR 1000/per year

INR 1000 per year

-

-


Demat Account AMC

-

INR 75 plus taxes per month

INR 300 in the first year and free from the subsequent years

-

Brokerage Charges for Equity Delivery

1.25-0.50%

1%

INR 0

-

Brokerage Charges for Equity Future

0.05-0.03%

-

INR 0

INR 200 per trade

Brokerage Charges for Equity Options

INR 95-75

-

INR 0

INR 200 per trade


While the figures mentioned above are merely related to some of the players in the market in order to give a brief understanding of how the market operates, the individual investor is advised to understand the risk associated with each such player and the charges associated with opening and maintaining such accounts carefully, prior to operating such accounts.


Convert Demat Account to NRI


According to the law of the land, an NRI faces certain restrictions while investing in Indian equities market. One such example of a restriction includes not being allowed to invest more than five percent in the paid-up capital of an Indian company. According to RBI mandates, an NRI needs to make certain changes in their Demat Account such that the restrictions can be monitored by RBI.


In case an NRI is holding some existing shares even before becoming an NRI, then the NRI individual needs to understand that he/she cannot operate such shares and stocks through the regular Demat Account. The regular Demat Account the NRI individual held prior to becoming an NRI needs to be closed and the shares and stocks in such Demat account need to be transferred to an NRO Demat Account.


The NRI further has an option of choosing whether to hold or sell the shares in the original Demat account. In case the NRI opts to sell the shares, the proceeds from such a sale would be credited to the NRO savings account which further faces restrictions on repatriation (An individual NRI can repatriate up to USD 1 million per the calendar year including any other account remittance, which would also require a duly authorized certification from a Chartered Accountant).


Best NRI Demat Account


While almost all Indian banks are offering the best Demat account options for the NRIs, some of the best Demat Account includes Demat Account with Indian Bans such as ICICI, HDFC, Kotak, SBI, and other such recognized banks. The investor is advised to make an informed decision while choosing their investing partner.