Investment & Financial Planning

Normal Demat Account Vs NRI Demat Account - Key Differences

autohr img By Ritesh Jain | Last Updated : 26 Dec, 2025

Normal Demat Account Vs NRI Demat Account
Table of Contents

A demat account is a non-negotiable requirement for anyone who is trading in the Indian stock market. Whether you live in India or not, having a demat account is essential if you want to buy, sell, or transfer securities in the Indian stock market.

Although the requirement of having a demat account is mandatory under the regulations, the processes and rules can change depending on your residential status. Hence, it is important to understand the difference between a normal demat account vs an NRI demat account.

In this guide, we will discuss all these differences in detail, including the main features, NRI demat account rules set by RBI, SEBI, and FEMA, and more.

Key Takeaways
  • You must be 18 or older to hold a Demat account.
  • There are two types of NRI demat accounts: NRE Demat Account and NRO Demat Account.
  • An NRE demat account allows complete repatriation, whereas an NRO demat account does not.
  • The normal demat account is also of two types: the regular account and the basic service account (BSDA) and The regular account is also called the Basic Services Demat Account (BSDA).
  • With an NRI demat account, you can make quick, easy transactions in shares and securities during trading.

What is a Normal Demat Account?

A demat account is for Indian residents who want to hold securities and shares virtually. A demat account lets you buy, sell, or transfer securities and shares virtually without the hassle of physical certificates.

In a nutshell, the demat account holds your shares in a secure digital record by using encryption and other security measures mentioned. Now that all securities and shares are held electronically, processing transactions takes less time and costs less money.

Types Of Normal Demat Accounts

  • Regular Account & Basic Services Demat Account (BSDA): This demat account is specifically for Indian residents who invest in the Indian market and trade in equity.
  • Basic Services Demat Account: This demat account was introduced by the SEBI to accommodate new investors. The key feature of this account is that it has zero maintenance charges if your account's overall holding value is less than Rs 50,000.
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What is an NRI Demat Account?

The Foreign Exchange Management Act (FEMA) has rolled out the idea of creating an NRI demat account for NRIs who are willing to invest in the Indian market and shares legally.

Types Of NRI Demat Accounts

  • NRE (Non-Resident External) Demat Account: This demat account is for investments made by NRIs using foreign income. This account allows complete repartition without any restrictions.
  • NRO (Non-Resident Ordinary) Demat Account: This demat account is for NRIs who want to invest with income earned in India. The account is non-repatriable, meaning it allows limited repatriation.

Both the regulatory frameworks of SEBI (Securities Exchange Board of India) and FEMA (Foreign Exchange Management Act) regulate these demat accounts.

Normal Demat Account Vs NRI Demat Account: Key Differences

The following table clearly shows the differences between a normal demat account and an NRI demat account.

The Features Normal Demat Account NRI Demat Account
Eligibilty Resident Indians Non-resident Indians
Linked Bank Account Resident Savings Account. NRE/NRO bank account
Regulator Guidelines SEBI SEBI, RBI, FEMA
Repatriation Not Applicable NRE Demat Accounts are repatriable, whereas NRO accounts are non-repatriable.
Investment Scheme General stock market transactions This might require the PIS (Portfolio Investment Scheme) for an NRE Account.
Taxation As per the Indian resident tax rules. Subject to the TDS and NRI tax laws.
Conversion Requirement Not Applicable You have to convert upon a change of the residential status.
Number of Accounts Only one demat account per individual You can have both an NRE demat account and an NRO demat account per individual.

Which Demat Account NRI Should Choose And Why

The following table outlines the NRIs' situation, recommends a demat account based on that situation, and explains why that account is suitable.

The Situation Recommended Demat Account To Use Why Is It Suitable
An Indian resident living in India Resident Demat Account This account is made for residents under FEMA regulations.
Recently became an NRI An NRI demat account ( conversion or new)

This account is suitable for ensuring FEMA compliance after the change in residency status
Planning to move abroad soon Convert the Resident Demat account to an NRI Demat account. This avoids regulatory issues once the NRI status is updated.
NRIs who want to have full repatriation of funds. NRE PIS demat account. This account permits equity trading with complete repatriation of funds.
NRIs who want trading flexibility over complete repatriation. NRO/ Non-PIS Demat Account. This account prides flexibility with a simpler structure and fewer PIS restrictions.
NRIs who are holding existing shares only. NRO/ Non-PIS demat account. This account is suitable for NRIs who want long-term shareholding without active trading.
NRIs who are actively trading in Indian equities. NRE-PIS Demat Account. This account is designed for frequent equity transactions.
NRIs who are planning to return to India permanently. You must convert an NRI Demat account to a resident Demat account.

This account is required once the Indian resident status is regained.
Long-term investors who plan to change their residential plans. Demat type, which is based on the current FEMA status. The demat account should always match the currency residency status.
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The Bottom Line

Introduction of demat accounts has changed the entire outlook towards Indian stock market investment. Gone are the days when you had to rely on certificates and physical papers for trading purposes. Now we thrive in a secure digital process overall.

This new approach, or rather, this digitized approach, has made the life of an NRI investor easier, as they can manage their financial assets from anywhere and at any time.

However, as an NRI, if you're still looking for proficient investments or portfolio managers to manage your securities and investment portfolio in India effectively. Savetaxs is the name to trust.

We have been helping NRIs from 90+ countries manage their investment accounts and portfolios in India, ensuring your investments are accurately tracked, and your portfolio is marked in green.

Connect with us as we serve our clients 24/7 across all time zones.

Note: This guide is for information purposes only. The views expressed in this guide are personal and do not constitute the views of Savetaxs. Savetaxs or the author will not be responsible for any direct or indirect loss incurred by the reader for taking any decision based on the information or the contents. It is advisable to consult either a CA, CS, CPA or a professional tax expert from the Savetaxs team, as they are familiar with the current regulations and help you make accurate decisions and maintain accuracy throughout the whole process.

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Ritesh Jain (Tax Expert)

Mr. Ritesh has 20 years of experience in taxation, accounting, business planning, organizational structuring, international trade financing, acquisitions, legal and secretarial services, MIS development, and a host of other areas. Mr Jain is a powerhouse of all things taxation.

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Frequently Asked Questions

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Yes, an NRI can convert a normal demat account into an NRI demat account.

No, an NRI cannot hold a normal demat account after moving abroad.

Types of demat accounts NRIs can hold are: NRE Demat Account and NRO Demat Account.

Yes, an NRI can have two main types of accounts, one for repatriable investments and the other for non-repatriable investments.

Having a demat account has multiple benefits, such as easy fund transfers, the ability to invest across multiple segments, regulatory compliance and taxation assistance, and more.

The NRI demat accounts are not taxable, but the income generated through them is taxable.