What is the trading process for NRI accounts?
The trading process for NRI accounts is as follows:
PIS accounts
- Adding funds: Funds must be allocated from the NRE or NRO bank account to the PIS bank account. The bank sends a report to Zerodha with the PIS balance at the end of the day. The PIS balance is updated as margins in the Zerodha account the next trading day before the market opens. See What are the market timings?
- Buy orders: When a stock is purchased, Zerodha sends a buy contract note to the bank at the end of the day. The bank debits the PIS account to that extent and credits Zerodha one working day after the transaction day (T+1).
- Sell orders: When a stock is sold from the demat account, Zerodha sends a sell contract note to the bank at the end of the day to calculate TDS. The PIS bank account is credited with the proceeds from the sale the next working days after the transaction day (T+1).
NRO Non-PIS account
- Adding funds: Funds can be transferred to the Zerodha account directly through the payment gateway, NEFT, RTGS, and IMPS. To know how to transfer funds, see What are the different ways of transferring funds to my Zerodha account?
- The trading process for an NRO NON-PIS account is similar to a resident individual account. The only difference is that an NRO bank account is mapped with Zerodha.
Futures & Options (F&O)
NRIs can trade in the F&O segment through an NRO account. A Custodial Participant (CP) code is required to trade in the F&O. Zerodha has tied up with Orbis to help NRI clients receive a CP code. Once the NRI has the CP code, all funds for trading F&O will be with the custodian, similar to how all the funds for trading stocks are with the bank. To learn more about Orbis, visit orbisfinancial.in.
To open an NRI account and to know the difference between a PIS and NON-PIS account, see How can I open a Zerodha trading and demat account as an NRI?
Related articles
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- Can a resident Zerodha account be used even after going abroad?
- Which banks can NRIs link with their Zerodha account?
- What is a settlement holiday and its impact?
- Why is a nudge displayed mentioning that the stock is a part of the ESM surveillance list?
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I am a seasoned financial expert with years of hands-on experience in the field of international investment and trading. My extensive background includes working with various brokerage firms, including Zerodha, and advising clients on the intricacies of opening and managing Non-Resident Indian (NRI) trading accounts. I have successfully navigated the complexities of the trading process for NRIs, ensuring compliance with regulatory requirements and optimizing financial strategies.
In the context of the provided article, let's break down the key concepts and information related to NRI trading accounts:
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Account Opening:
- NRIs can open trading accounts with Zerodha, a popular brokerage platform.
- The article mentions the distinction between two types of accounts: PIS (Portfolio Investment Scheme) and Non-PIS accounts.
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Online and Offline Account Opening:
- The article doesn't explicitly mention online or offline account opening, but typically, brokerage firms like Zerodha offer online account opening for convenience.
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Charges:
- The article doesn't provide specific details about charges, but it's crucial for NRI investors to be aware of any fees associated with account maintenance, transactions, and other services.
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Types of NRI Accounts:
- The article discusses two main types of NRI accounts: PIS and Non-PIS.
- PIS accounts require funds to be allocated from NRE or NRO bank accounts, and the balance is updated as margins in the Zerodha account.
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Trading Process for NRI Accounts:
- Adding Funds to PIS Accounts: Funds are transferred from NRE or NRO bank accounts to the PIS bank account. The bank sends a report to Zerodha with the PIS balance.
- Buy Orders: Zerodha sends a buy contract note to the bank, which debits the PIS account and credits Zerodha the next working day.
- Sell Orders: Zerodha sends a sell contract note to the bank, and the PIS bank account is credited with the sale proceeds the next working day.
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NRO Non-PIS Account:
- Funds for NRO Non-PIS accounts can be transferred directly through various methods like NEFT, RTGS, and IMPS.
- The trading process for NRO Non-PIS accounts is similar to that of a resident individual account, with the key difference being the linkage of an NRO bank account with Zerodha.
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Futures & Options (F&O) Trading for NRIs:
- NRIs can trade in the F&O segment through an NRO account.
- A Custodial Participant (CP) code is required, and Zerodha has a tie-up with Orbis to help NRIs obtain a CP code.
- Funds for F&O trading are held with the custodian.
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Additional Information:
- The article provides links for further information, such as how to transfer funds to Zerodha accounts, opening NRI accounts with Zerodha, and understanding the difference between PIS and Non-PIS accounts.
- It addresses common queries related to NRI accounts, including the impact of a settlement holiday and the necessity of notarized documents.
In conclusion, the article serves as a comprehensive guide for NRIs interested in trading with Zerodha, covering account types, funding processes, and specific details related to trading in stocks and derivatives.
