NRI Trading Account: What Are The Benefits of NRI Account?

One of the world’s equity markets with the fastest growth is the Indian share market. Due to various benefits, Non-Resident Indians (NRIs) are coming on board in addition to Indian investors to profit from the expanding Indian equity market. Any investor, whether an Indian or an NRI, must open Demat and Trading accounts to trade on the Indian capital market. Right now, any Indian share market app make it incredibly simple to open a Demat and Trading account. Now one question may come to your mind: How do you find the best trading app for NRIs? Here you can find all the details you should know.

What is an NRI trading account?

Between an NRI Demat account and financial assets like equity shares, bonds, mutual funds, and other assets, an NRI trading account serves as the intermediary. When you purchase shares, they are added to your Demat account through your online trading account.

What is an NRI demat account?

NRI Demat or Dematerialized accounts provide online storage for investors’ digital stock. The depository institutions that look after investors’ Demat accounts in India are CDSL (Central Depository Services Limited) and NSDL (National Securities Depository Limited). Shares traded on the BSE are stored by CDSL, while shares traded on the NSE are stored by NSDL. A unique sixteen-digit number known as the Demat account number allows access to various financial products.

Different types of NRI trading accounts

NRI trading accounts have different kinds of specifications. Based on those specifications, major two types are as follows:

  • NRE (Non-Resident External) Trading Account: NRIs who keep their money in freely transferable Non-Resident External (NRE) accounts can open an NRE Trading Account.

  • NRO (Non-Resident Ordinary) Trading Account: NRIs who hold their money in Non-Resident Ordinary (NRO) accounts, which are not subject to free relocation, should consider opening an NRO Trading Account.

Features of NRE trading account:

  • The currency of the NRE Trading Account is the Indian Rupee (INR).
  • There are no restrictions on the free repatriation of funds held in the NRE Trading Account, including the proceeds from the sale of securities, dividends, and interest.
  • Funds from outside of India, or foreign income, are used to fund the NRE Trading Account.

Features of NRO trading account:

  • The NRO Trading Account uses Indian Rupees (INR) as its currency.
  • Funds held in the NRO Trading Account are subject to repatriation restrictions, unlike NRE Trading Accounts. The repatriation must receive prior authorization from the authorized bank and is subject to several restrictions.
  • Rent, dividends, pension payments, and any other Indian income sources are used to fund the NRO Trading Account.

What are the benefits you can get from an NRI trading account?

You can enjoy many advantages when you own an NRI trading account.

  • According to the Income Tax Act of 1961 provisions, as an NRI, you are not required to pay taxes on the interest income earned on your NRE and FCNR (B) accounts.
  • You can obtain a loan in India using the funds deposited in your NRI account. Loans, including fund-based and non-fund-based facilities, are provided to NRIs by banks and financial institutions authorized to do business in India.
  • Various digital platforms like a share market trading app are easily available for opening NRI trading accounts.

Till now, you have understood what an NRI trading account is and what other things are related to it. You can take help of a share trading app to open an NRI trading account so that anyone can start investing easily.

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