Non-Resident Indians (NRIs) looking to invest in the Indian stock market can opt for the NRI 3-in-1 Account – a combination of a bank account, demat account, and trading account into a single online platform, providing convenience and efficiency for NRI investors.
The NRI 3-in-1 Account functions as a comprehensive investment tool, facilitating transactions across its constituent accounts. With features like After Market Orders (AMO) and Good Till Cancelled (GTC) order types, NRI customers can execute trades round the clock, enhancing flexibility and accessibility.
The NRI 3-in-1 Account comprises three essential components
1. NRI Bank Account (PIS Linked): This account serves as the hub for monetary transactions in Indian Rupees. Linked to the Portfolio Investment Scheme (PIS), it enables NRI investors to repatriate funds. While the PIS linking is mandatory for NRE accounts, it is optional for NRO accounts, providing flexibility in investment choices.2. NRI Demat Account: Designed to hold securities in electronic format, the NRI Demat Account accommodates various investment instruments, including shares, mutual funds, bonds, and ETFs.
3. NRI Trading Account: The gateway to the stock market, the NRI Trading Account facilitates the buying and selling of securities. Integrated with the bank and demat accounts, it ensures seamless execution of trades based on available funds and shares.
Most major banks in India, including HDFC Bank, ICICI Bank, Kotak Mahindra BA, Axis, and SBI, offer the NRI 3-in-1 Account.
Benefits of the NRI 3-in-1 Account
- Convenience: Integrated accounts offer a hassle-free investment experience, consolidating multiple functions into a single platform.
- Online Accessibility: With a unified user ID, investors can access and manage their investments conveniently from anywhere with an internet connection.
- Diverse Investment Options: The account facilitates investment in a wide range of instruments, including stocks, futures and options (F&O), mutual funds, and more.
- Seamless Fund Movement: Transferring funds between accounts is effortless, ensuring smooth liquidity management.
- Flexible Order Types: Features like GTC and AMO orders enhance trading convenience, allowing investors to capitalize on market opportunities efficiently.
What are your investment options with a 3-in-1 account
The NRI 3-in-1 Account not only simplifies the investment process but also offers a plethora of opportunities across various financial instruments. Here’s a glimpse into the wide array of investment avenues available to NRI investors through this integrated platform:
- Equity: Investing in shares of companies listed on the stock market opens doors to potential dividends and capital appreciation. With the NRI 3-in-1 Account, NRI investors can seamlessly participate in equity trading, leveraging market opportunities to maximize returns.
- Mutual Funds: Pooling funds with other investors, NRI investors can benefit from professional fund management expertise by investing in mutual funds. These funds allocate investments across a diversified portfolio of securities, including stocks and bonds, aiming to generate returns over the long term.
- Exchange-Traded Funds (ETFs): Similar to mutual funds, ETFs represent a pooled investment vehicle traded on stock exchanges. NRI investors can capitalize on the flexibility and liquidity of ETFs, which track specific indices or sectors, providing exposure to a diversified basket of assets.
- NCDs, Bonds, and Corporate FDs: NRI investors seeking fixed-income opportunities can explore non-convertible debentures (NCDs), bonds, and corporate fixed deposits (FDs). These instruments offer predictable returns and serve as avenues for corporates and governments to raise capital from investors.
- Systematic Investment Plan (SIP): SIPs enable NRI investors to systematically invest in mutual funds through regular, periodic payments. This disciplined approach not only fosters long-term wealth creation but also mitigates the impact of market volatility through rupee cost averaging.
- Derivatives: NRI investors with a higher risk appetite can consider derivatives, which derive their value from underlying securities such as stocks or indices. Futures and options contracts offer opportunities for hedging, speculation, and portfolio diversification, albeit with inherent risks.
- Tax Saving Instruments: The NRI 3-in-1 Account facilitates investments in tax-saving instruments, enabling NRI investors to avail exemptions and deductions to optimize their tax liabilities. Instruments like Equity Linked Savings Schemes (ELSS) and Public Provident Fund (PPF) offer tax benefits while promoting long-term wealth accumulation.
- Currency Derivatives: For NRI investors interested in currency trading, currency derivatives provide a platform to hedge against currency risk or speculate on forex markets. These financial contracts involve the exchange of two different currencies at a predetermined rate, offering opportunities for profit in volatile currency markets.
Opening an NRI 3-in-1 Account
It typically involves a straightforward process, albeit with some variations among banks. While some banks offer online account opening for NRIs from specific regions, others require manual submission of documents.For instance, ICICI Direct provides a paperless online account opening facility for NRIs from the USA and Canada, while other countries follow a four-step process involving form submission, document verification, and account activation.
However, it’s essential to be aware of associated charges, which may include account opening fees, PIS account maintenance charges, and brokerage fees for equity trading.
Some Banks to consider for your 3-in-1 Account
1. ICICI Direct 3-in-1 Account: An ICICI customer can register a 3-in-1 account with ICICI Direct for a one-time cost of up to Rs 975. The standard brokerage plan is as follows: Intraday at 0.275% per side, Futures at 0.05%, Options at Rs 95 a lot, and Equity Delivery at 0.55%.2. Kotak Trinity Account: No charges are levied for opening an account, but there is a minimum account maintenance fees of Rs 50 per month. No brokerage fee is changed.
3. HDFC 3-In-1 SmartInvest Account: No initial deposit is required to open an account and there is no requirement for an average monthly balance. There are no charges levied for non-maintenance of the account. There are no Demat AMC charges for the first year and discounted pricing for managed customers from 2nd year onwards. No brokerage for trade volume up to Rs 25 lakh for first 90 days. Equity brokerage charges up to 10p (post free volume). F&O & Derivatives at flat Rs 20/order.
