As you might already be aware, having a demat account is a mandatory prerequisite for investing in the Indian stock market. However, what you may not know is that you can possess multiple demat accounts. Yes, you read that right. An Indian citizen residing in India has every right to possess multiple demat accounts.
Now that we’ve gotten that point across, what about Non-Resident Indians (NRIs)? Can an NRI possess multiple demat accounts? If this is something that you’ve been wondering for a long time, we have the perfect answer for you. Continue reading to find out.
To put it simply, the answer is yes. An NRI can have multiple NRI demat accounts under their possession. Depending on the investment objective and the type of investment, they can have different demat accounts. Here’s a quick look at the types of demat accounts that NRIs can possess.
1. Non-repatriable demat account
Being an NRI, you can choose to have a demat account linked to a Non-Resident Ordinary (NRO) bank account. The funds in an NRO bank account cannot be repatriated outside India. And so, by extension, the funds that you receive through the sale of shares held in a demat account linked to an NRO account cannot be repatriated. With such a demat account, you can invest in the primary market and buy mutual funds online.
2. Repatriable demat account
On the other hand, NRIs can also choose to have a demat account linked to a Non-Resident External (NRE) bank account. The funds in an NRE bank account can be freely repatriated outside India. This effectively means that the funds that an NRI receives from the sale of shares held in a demat account linked to an NRE account can be transferred outside India. As with the previous type of demat account, an NRI can invest in the primary market and mutual funds.
3. NRI demat account for investing in the secondary market
To be able to invest in the secondary market, an NRI needs to have a demat account that’s linked to a separate bank account (one that’s not an NRE or an NRO account). This demat account has to also be linked to the Portfolio Investment Scheme (PIS) by the Reserve Bank of India.
An NRI, at any point in time, can hold multiple demat accounts under their name. In fact, if you’re a regular investor, you can choose to open all the above three NRI demat accounts - one for repatriable investments, another for non-repatriable investments, and a third for investing in the secondary market.
If you’re an NRI wanting to invest in the Indian stock market, visit the website of Motilal Oswal right away. The process for demat account opening is easy and can be completed within minutes.
Related Articles: How to Open a Demat Account Without a Broker | Factors to Keep in Mind While Opening a Demat account | Factors to Consider When Opening a Demat Account | 10 Points to Remember When Operating your Demat Account | Types Of Demat Account & Trading Account
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