Stock investment as an NRI: Present RBI rules for NRI equity investors encourage
long term investments. For a typical NRI casual investor under 35 who will buy and hold stocks over a long term, an ideal investment platform should have decent online interface and low recurrent fees. Brokerages/Accounts with Annual Maintenace Charges (AMC) are an unviable option for NRIs. High annual fees can not only significantly reduce gains from investments but are also difficult to sustain over a long term as most NRIs don't have perennial income in India to continue paying fees endlessly.
PIS NRE Account: Few months back I had made this thread on high AMCs charged by most banks for NRE PIS accounts. RBI mandates investors to open a PIS NRI bank account to invest in stocks, which are provided by only a few banks and the most popular providers (such as Axis/ICICI/SBI) charge hefty AMCs. Axis banks waives the
Rs 1500 AMC for customers who maintain a minimum balance of
Rs 10 lakhs (15000 USD)which is also un-practical for many NRIs.
Axis Bank's AMC waiver for a minimum balance gave me the idea of searching for banks that charged the lowest PIS AMCs in the market and attempt AMC-waiver bargain with them in exchange of a more practical deposit amount. Yes Bank and IndusInd banks offer NRE PIS with the lowest AMC of Rs 500. On contacting Yes Bank, they declined to entertain any such request. IndusInd bank, on the contrary, agreed to waive my NRE PIS AMC for < 40% of what Axis bank asks after a phone negotiation. The bank rep also assured me that this agreement will remain permanent as long as I maintain my minimum negotiated deposit.
IndusInd's bank rep was very curteous and gave timely guidance on the account opening process. After mailing all my documents to their Fort, Mumbai office, I finally got my NRE PIS account open and got my RBI permission letter allowing me to invest in stocks as an NRI. I highly recommend IndusInd bank to those interested in an NRI PIS account.
If you decide to apply, be prepared for paperwork to open account.
PIS Account opening charges: Rs 1000 + Rs 150 service tax + Minimum Deposit to be maintained for AMC waiver: Negotiable
Discount Brokerage: Out of the most popular NRI-friendly discount brokerages:
Zerodha charges Rs 300 AMC for Demat accounts. The next most popular discount brokerage, SAS Online offers 0 AMC Demat + Trading, but, they clearly told me that they only allow NRIs to invest through non-PIS NRO account (which is non-repatriable) which was again a deal-breaker for me.
Chittorgarh.com has been a great source of information for me to understand and compare discount brokerages and lately they have been advertising
Prostocks.com as a new discount brokerage, which is also NRI friendly. They offer 0 AMC Demat + Trading in exchange of a refundable deposit of Rs 1000. Prostocks.com are fully compatible with IndusInd NRI PIS accounts. They employ email based OTP and online account opening so filling forms and compiling paper work was simpler due to their online form upload and compiling option (final set of forms have to be notarized and snail-mailed). Customer Service replies were timely and helpful. After mailing my documents to their Mumbai office, they promptly finished all formalities for KYC, Trading & Demat account set up + online access. Prostocks user-interface looks like
this.
Brokerage opening charges: Refundable Demat opening charges: Rs 1000
TLDR: If you want a long term sustainable solution to invest in indian stocks as an NRI then negotiate a 0 AMC NRE PIS account with IndusInd bank for a minimum negotiable deposit and open a brokerage account with Prostocks.com