You may get confused while applying for a Demat account. because of different types of Demat accounts.
To avoid confusion you should know how many types of Demat accounts available in India
As we know Demat account is necessary to invest in the share market. Because it holds your share like your saving account holds your money.
Types of Demat Accounts in India:
There are primarily three types of Demat accounts available in India
- Regular Demat Account
- Repatriable Demat Account
- Non-Repatriable Account
Regular Demat Account:
Regular Demat account is for Indian citizens residing in India. If you are an Indian citizen and want to trade or invest in shares then you need to get this account.
Regular Demat account service is provided by depositories:
There are two depositories in INDIA
1- NSDL –
2- CDSL
Depositories provide these services through depository participants that we popularly know as Stockbroker.
Repatriable Demat Account:
A repatriable Demat account is particularly for NRI. An NRI can do investments in the Indian share market through a repatriable Demat account.
It provides a facility to NRI. he can invest in the Indian Market by residing in any part of the world.
As we know digital payment method shows the transaction on an immediate basis. Similarly, a Repatriable account shows the number of shares on an immediate basis as you purchase the shares from the stock market.
Repatriable Demat accounts allow easy foreign fund transfers as a result NRI gets an easy investment facility. Just he needs to have an NRE account to facilitate foreign fund transfers.
Non-Repatriable Demat Account:
A non-Repatriable Demat account is also for NRIes but it comes with certain limitations it doesn’t allow foreign fund transfers.
It requires an NRO account to facilitate share investment. As we know an NRI earning foreign, as well as Indian money, faces difficulty in financial management.
But he can manage it with the help of NRO and NRE accounts.
As per RBI guidelines, NRI can hold up to 5% of paid-up capital In an Indian Company.
