Short answer: it depends on one question — does this money ever need to leave India?
- If yes → NRE account + PIS. Full repatriation rights, more setup friction, and — a fact most guides skip — a higher cost on every single trade.
- If no → NRO account, no PIS. Simpler, cheaper per trade, F&O possible, and up to USD 1 million/year can still be repatriated with paperwork.
- Mutual funds, IPOs, bonds → either account. No PIS needed, ever.
The good news for 2026: the setup that used to mean branch visits and couriered forms is now largely digital. The rules haven't changed — the speed has. Details below.
First: you can't keep your resident accounts
Once you become an NRI, FEMA requires you to stop using your resident savings account and resident demat/trading account. The savings account gets converted to NRO; the demat gets re-designated. Continuing to trade on resident accounts is a FEMA violation, and banks now catch it at re-KYC. Do this before anything else — and note that even the conversion is now doable remotely: several NRI-focused platforms handle resident-to-NRI demat conversion end-to-end in about a week, holdings and trade history intact.
The decision table
| I want to... | Account | PIS? | Money can leave India? | Cost per trade |
|---|---|---|---|---|
| Buy NSE/BSE stocks with foreign salary, take profits abroad freely | NRE | Yes | Fully, no limit | Higher — PIS brokerage + bank PIS charges |
| Buy NSE/BSE stocks with Indian income (rent, dividends, old savings) | NRO | No | Up to $1M/FY, after tax + CA certificate | Lower — standard NRI brokerage |
| Buy mutual funds | NRE or NRO | No | Follows the account | N/A (direct plans free) |
| Apply for IPOs | NRE or NRO | No | Follows the account | — |
| Trade F&O | NRO only | No | Non-repatriable | Broker-specific |
That last column is the part most guides skip. The PIS route costs meaningfully more per trade — at a typical discount broker the PIS delivery charge runs several times the non-PIS one, and your designated bank adds its own per-transaction PIS fee on top. If you trade often with money that doesn't actually need to leave India, you're paying a repatriation premium for rights you'll never use. Check your broker's NRI rate card and your bank's PIS tariff sheet before choosing — those two documents decide more of your long-run cost than the fund you pick.
What each account actually is
NRE (Non-Resident External). Holds foreign earnings converted to INR. Only foreign money goes in — you cannot deposit Indian rent or dividends. In exchange: principal, gains and interest are freely repatriable, and interest is tax-free in India while you're a non-resident under FEMA.
NRO (Non-Resident Ordinary). Holds India-sourced income. Interest is taxable with TDS at 30% + cess deducted at source (your DTAA may cut this — covered in our DTAA guide). Repatriation: up to USD 1 million per financial year, each transfer needing taxes settled + Form 15CA/15CB from a CA.
PIS (Portfolio Investment Scheme). Not an account — an RBI permission letter that lets you buy/sell listed stocks with NRE money on a repatriable basis, with every trade routed through one designated bank branch and reported to RBI. The NRO stock route doesn't need it.
How fast is this actually? (snapshot — review this section periodically)
The rules above are stable. Everything in this box is not — bank processes, broker onboarding and the platforms in this space all move quickly. Current as of August 2026; verify before relying on it.
Faster than older guides suggest, if your documents are clean.
Bank account (NRE/NRO): openable fully digitally at most major banks now — several large banks support opening from abroad, and Aadhaar-based video KYC has replaced the branch visit for eligible applicants. The video call itself takes minutes.
Demat + trading account: typically 7-15 business days end-to-end online with video verification. If your KYC is already KRA-verified, most large brokers let you complete everything online with Aadhaar e-Sign, and the fastest setups activate within a couple of days. If your KRA status isn't verified and you're abroad, you're still in courier territory — printed forms, notarised copies (Indian embassy or equivalent), and about a week extra in transit. Getting KRA-verified is the single biggest speed unlock — check your status before you start anything else.
PIS permission: the step that still adds time, since your bank applies to RBI on your behalf. Budget one to three weeks on top. Another quiet argument for the NRO route when repatriation isn't the goal.
Facilitator platforms: a number of NRI-focused services now sit on top of banks and brokers and run the whole sequence — account, KYC, PIS if needed — remotely. They don't change any rule above; they compress the admin. Worth considering if you'd rather not project-manage three institutions from another time zone.
Also worth knowing: you can run UPI on your foreign mobile number linked to your NRE/NRO account — a dozen-odd country codes are supported, including the US, UK, UAE, Canada, Singapore and Australia. Register the foreign number against the account first; no Indian SIM needed.
Setup: the exact sequence
Route A — NRE + PIS (repatriable stocks):
- Open an NRE savings account (digital at most major banks — passport, visa/residence proof, overseas address proof, PAN; PAN-Aadhaar linkage needed for the video-KYC routes).
- Ask the same bank for PIS permission — it applies to RBI and opens the designated PIS-linked account. 1-3 weeks.
- Open the NRI demat + trading account linked to the PIS account (online with e-Sign if KRA-verified; courier if not).
- Fund from abroad → trade. Delivery only.
Route B — NRO non-PIS (non-repatriable stocks):
- Convert your old savings account to NRO, or open one digitally.
- Open the NRI demat + trading account linked to it. No PIS, no RBI wait.
- Trade — at the lower non-PIS brokerage, with F&O possible on this route (a CP code is no longer mandatory).
Mutual funds (either route): complete NRI KYC with the platform/fund house and invest. Don't wait for PIS — it doesn't apply. (US/Canada NRIs: check which AMCs accept you; FATCA makes the list shorter.)
The rules that will surprise you if you don't know them
- PIS = one bank only. All trades route through a single designated branch.
- Delivery trades only on PIS — no intraday, no short-selling.
- Ownership caps (repatriable / PIS route): less than 10% of a company's paid-up capital per NRI; 24% aggregate for all individual non-residents. (These replaced the older 5% / 10% caps, with 24% only by company resolution, in June 2026.)
- TDS at source on sales: the bank/broker deducts capital gains tax before crediting proceeds. If your treaty rate is lower, the excess is refundable — but only if you claim it.
- NRE interest isn't tax-free forever. The exemption tracks your FEMA status; it ends when you move back — see our RNOR status guide for the return sequence.
Three mistakes that actually cost people
- Depositing Indian income into NRE. Breaks the account's foreign-source status and its repatriation rights.
- Mixing repatriable and non-repatriable holdings in one demat. Keep Route A and Route B separate, or your repatriation request stalls while the bank reconstructs which shares came from which money.
- Choosing PIS by default. If the money is staying in India, you're paying a premium on every trade — broker plus bank PIS charges — for exit rights you don't need, and the $1M/year NRO window covers most portfolios anyway.
Where Paisaverse fits
The account decides your money's rights; it doesn't show your results. Once you're trading, upload your Zerodha or Angel One tradebook to Paisaverse and see your return split into stock gain vs currency impact in your own currency — plus, per holding, the TDS deducted at source and how much of it your treaty makes refundable.
General information, not tax or investment advice. Bank processes, broker charges and platform availability change — the timelines and fees above are current as of August 2026; confirm specifics with your providers. Last reviewed: August 2026.
