Last Updated: Mar 21, 2024 Value Broking 5 Mins 1.4K

Suppose you are a Non-resident Indian (NRI) and want to open a Demat account. You can open it through an NRE and NRO bank account. However, an NRI cannot use a regular savings account for their usage.

An NRE saving account for NRI status people allows them to hold deposits safely and conveniently. These deposit funds can come from foreign earnings or transferred from foreign earnings. In the NRE account, whichever currency you earn will convert into Indian rupees. It is one of the easy ways to allow NRI to maintain foreign income. One more benefit of NRE accounts is that it gives interest earned on NRE accounts and is exempt from tax, and account holders can also repatriate the money any time they want.

An NRO account in India helps NRIs manage income earned in India from rent, pension, dividends, etc. NRO accounts also give the facility to convert foreign currency into INR. When your resident status changes to NRIs, you can change your savings account into an NRO account. 

If you are an NRI person, you may consider these accounts. However, you must choose which account is best for your banking service based on your transaction and requirement. To understand the difference between a nre and nro Demat account, you have to know the importance of NRO and NRE Demat accounts. 

Why NRO and NRE Demat Account is So Important?

Both accounts are open for NRIs. For example, people with NRO and NRE bank accounts can open an NRE and NRO Demat account. Or you can say your savings account is linked to your Demat account. An NRE and NRO Demat account is linked to a bank account.

The Demat account for NRI account investment can come in two forms PIS and NON-PIS account.

The PIS or portfolio investment scheme account needs an RBI permission letter through one of the partner banks. You can use both NRO and NRE bank accounts to invest with this account.

In the case of Non- PIS, This account doesn’t require any permission from specific banks. But there is a catch: only funds from NRO accounts are used for investing in your Demat account in these accounts. As a result, you can use Non-PIS accounts due to lower costs, fewer restrictions, and a more effortless investing experience.

Your NRO Demat account should be linked to your NRO bank account in non-PIS for non-repatriable transactions.

For using an NRI account, your Demat account must be under PIS.

What’s the Difference Between a NRE and NRO Demat Account?

NRE and NRO accounts are helpful for someone who earns in India and some foreign countries. If you are someone who works in some multinational company and does some freelance in India and invests in the share market of the countries. In that case, an NRE and NRO Demat account plays a crucial role. Both the accounts have their advantages.

NRE Demat Accounts

Suppose you use NRE Demat accounts, which will help you watch your Demat Account and money generated from countries other than India. And if you transfer any fund in this Demat account of yours, it will first convert that amount into INR. After conversion, you can use this amount for investing. Moreover, the amount in this account is repatriable, which means you can transfer amounts to your foreign account.

NRO Demat Accounts

NRO accounts are the backbone of NRIs because it helps track revenue generated in India. The revenue can be from property or room rent, salary, or some income from freelancing. It’s a rupee account, but you can get payments in INR or some foreign currency. This account can get opened as a savings account, current account, salary account, and a fixed deposit.

NRE and NRO Demat Account in a Nutshell

We can look further at particular ratios to understand more about these accounts.


In the NRE account, your deposit in the NRE account and interest earned are fully repairable. In the NRO account, you can repatriate just one million dollars with the help of a CA.


In the NRE account, the interest earned is tax-free. In the NRO account, the taxation reduces their tax liability in India by availing tax benefits under the Double Taxation Avoidance Agreement with some countries.

Joint Account

An NRE account doesn’t allow an Indian citizen to make a joint account with the NRE account holder. But you can make a joint account with an NRI. In the case of an NRO account, you can make a joint account holder a resident of India.

Currency Difference

The NRE account is not safe to exchange fluctuations and conversion loss. In the NRO account, deposits are not exposed to daily currency fluctuations.


India has an excellent opportunity to invest and grow. Many tech and global powers are investing in India. The Indian stock market is a place to make huge profits and grow with the booming economy. The Indian government and banks provide an easy way to open NRE and NRO Demat accounts and trade. With the help of a stockbroker online, you can trade and be a part of the Indian stock market.

Frequently Asked Questions (FAQs)

Yes, an NRI student can make an NRE and NRO Dematerialized account.

  • To Open an NRE and NRO account, you need the following documents as follows:
  • Identity proof (Copy of PAN, passport)
  • NRI status proof (Copy of visa, work permit, OCI, PIO)
  • Proof of residence abroad
  • Indian address proof
  • Canceled cheque
  • PIS permission letter

Depending upon your bank service, you can easily open an NRE and NRO bank account and a Demat account with these bank accounts.

For NRIs, it is essential to open an NRE and NRO Demat account to trade and invest in the Indian stock market.