PIS Account for NRI – A Complete Guide
Today we have different ways of investing to generate more income. However, some of them have high risks and one should evaluate them in detail before investing money. By generating more income through the right investments, we can achieve goals in financial planning. The Reserve Bank of India (RBI) offers exclusive investment schemes for Non-resident Indians to ensure high returns. PIS is one of them. PIS full form is Portfolio investment scheme. What is the PIS account all about? It is an account that allows NRIs to buy and sell stocks under schedule 3 of the Foreign Exchange Management Act 2000. It is ideal for those who want to manage their investment portfolios with ease.
The scheme comes with various features enabling NRIs to generate more income. To enjoy the benefits of a PIS account, an NRI should have an NRE or NRO account in any designated banks that enable the PIS scheme. It makes feasible methods to monitor the stock market movements with more attention that will help accomplish goals significantly. Another thing is that it gives ways to minimize losses and other problems to a large extent. Moreover, the portfolio investment scheme is the right choice for earning more income with high returns.
Why do NRIs need a PIS account?
NRIs who want to invest money in the Indian stock markets should have a valid account to purchase and sell shares without any difficulties. The PIS account for NRI makes the stock investment process a simple one by addressing the essential needs. It gives ways to invest money based on repatriation or non-repatriation basis. Furthermore, the account allows NRIs to trade freely that will help ensure high returns. The primary objective of this account is to make seamless transactions in share investments.
How does the PIS work for NRIs?
NRIs should know what a PIS account is and how it works before investing money that will help make an informed decision. They should open an NRE or NRO account in approved banks when they want to trade shares in stock markets. The account is mandatory for NRIs to process the transactions with ease. Investors should link the account to the NRI Demat and NRI trading account.
What are the Benefits of the PIS?
- Ease of Transactions: The PIS scheme allows NRIs to ensure seamless transactions within the ambit of the rules and regulations. It provides ways to generate high returns by addressing the essential needs.
- Low-Cost Transactions: One of the primary advantages of opening this account is that it allows investors to make low-cost transactions that will help save money.
- Value-Added Service: The account offers value-added services for NRIs thereby showing methods to focus more on their financial goals. An NRI cannot carry forward the profits but the scheme will calculate the capital gains based on the net profits. Furthermore, the account permits loss set-off only on future profits and not on earlier profits.
- Investment Trading: NRIs can invest in shares and bonds of companies listed on the stock exchange based on their choices. Also, they can trade them through an approved stock exchange that will help generate high returns.
- Seamless RBI Compliance: Under the PIS account scheme, you are allowed to invest in a number of particular shares and that limit is set up by the RBI. It will monitor the stock market investments for every transaction and the investors can get seamless RBI compliance.
What are the Charges for Opening a PIS Scheme in India?
NRIs should know the PIS account charges in detail that will help proceed further. Some of them include issuance charges, account maintenance charges, and reporting charges. An issuance charge is a one-time charge collected by the bank when NRIs want to open an account. Similarly, an account maintenance fee is a fee levied by banks in defined periods after opening the scheme. Investors have to pay a reporting charge per trade date and they should confirm the same with a bank.
What are the Documents needed to open a PIS scheme?
NRIs should submit certain documents needed to open a PIS scheme to process transactions as soon as possible. Some of them include:
- PAN card
- C-KYC
- NRI status proof
- Address proof – (Including Indian and Overseas)
- FATCA
- Additional documents such as PIO status card if needed
Eligibility to Open a PIS Scheme
When opening a PIS scheme, NRIs should check the eligibility conditions that will help process the same immediately. Those who meet the following criteria are eligible to open an account.
- An employee who is traveling to other countries for work
- Individuals who migrated overseas for business purposes
- Mariners who work in Indian shipping companies
- Persons of Indian Origin (PIO) who have a valid passport
- A spouse of a PIO
How to Open a PIS Scheme?
NRIs who want to open a PIS scheme should follow the below steps that will help make the process a simple one:
- The first step is that they should collect the details of banks that offer the PIS scheme for investment purposes
- Investors should visit the nearest bank to gather more information about the scheme
- A bank will provide a PIS account opening and one should submit the same with the necessary details
- An NRI can open an account in a bank where he/she has an NRE/NRO account
NRIs should submit valid proof and proper documents when they want to open a PIS scheme. A bank will reject any application form if it is not satisfied with the details and documents provided by an investor.
The Conclusion
Investing money in stock markets may become a challenging process for many NRIs. But PIS is one of the best options available for them to generate high revenues. At the same time, one should understand not just the PIS account’s full form but also what is a portfolio investment scheme from different sources including online.
In most cases, a bank will guide NRIs to open an account with experienced staff to overcome unwanted problems. Investors must read the instructions properly before choosing the scheme. This will help a lot to reduce the complications in the account opening process to ensure peace of mind.
