PIS vs Non-PIS Account for NRIs - Which One Should You Choose

A few months ago, Ritwik from Dubai had a question for us.

He wanted to invest in Indian stocks but was confused. His bank said he needed a PIS account. His broker said Non-PIS was easier. 

A friend told him he could do F\&O only with one type. He had no idea who to believe.

Sound familiar?

If you are an NRI wanting to invest in Indian equities, you have probably heard both terms thrown around. PIS. Non-PIS. NRE. NRO. The jargon can make your head spin.

Here is the truth. Both accounts help you invest in Indian stocks. But they work differently. They suit different goals. And choosing wrong can cost you time, money, and flexibility.

At Belong, we have helped many NRIs like you navigate this exact question. 

In this guide, we will break down everything you need to know about PIS vs Non-PIS accounts. No jargon. No confusion. Just clear answers.

By the end, you will know exactly which account fits your needs.

What is a PIS Account?

PIS stands for Portfolio Investment Scheme. The Reserve Bank of India (RBI) created this scheme to let NRIs invest in Indian stock markets through a regulated route.

Think of PIS as a monitored gateway to Indian stocks.

When you buy or sell shares through a PIS account, your bank reports every transaction to the RBI. This ensures you stay within investment limits and follow all foreign exchange rules.

Here is how PIS works:

You open a special PIS-enabled bank account (NRE or NRO). This account links to your demat and trading accounts. When you trade, funds flow through this designated bank account. The bank tracks everything and reports to RBI.

The RBI introduced PIS to prevent excessive foreign ownership in Indian companies. 

It monitors how much NRIs collectively own in each company. Individual NRIs can hold up to 5% of a company's paid-up capital. All NRIs together can hold up to 10% (extendable to 24% with a special resolution).

👉 Tip: You can only have one PIS account at a time. Having multiple PIS accounts with different banks is not allowed.

What is a Non-PIS Account?

A Non-PIS account is simpler. It is basically your regular NRO savings account linked to a demat and trading account. No special RBI approval needed. No mandatory transaction reporting.

With Non-PIS, you can:

Invest in Indian stocks on a non-repatriable basis. Trade in Futures and Options (F&O). Do equity intraday trading (since July 2025). Invest in mutual funds, bonds, and IPOs.

The key difference? Non-PIS does not require RBI oversight of every trade. Your investments stay in India. Repatriation has limits.

Many NRIs today prefer Non-PIS because of its ease and lower costs. Unless repatriation is your top priority, Non-PIS often makes more sense.

Key Differences: PIS vs Non-PIS

Let us put them side by side:

Source: RBI FEMA Guidelines and SEBI Regulations

Big Changes in 2025: SEBI Makes Non-PIS More Attractive

Here is news that changes everything for NRI investors.

In July 2025, SEBI removed the mandatory Custodian Participant (CP) code requirement for NRIs. Earlier, if you wanted to trade F\&O, you needed a custodian. This meant extra paperwork and fees.

Now? NRIs using Non-PIS can trade F\&O directly without a custodian.

Even better, NRIs can now do equity intraday trading through Non-PIS accounts. You can buy and sell on the same day. You can do BTST (Buy Today, Sell Tomorrow) trades. All through a single account.

This brings NRI trading access much closer to what resident Indians enjoy.

👉 Tip: If you opened an NRI account before 2025 and want F\&O access, ask your broker about the new simplified process. No CP code needed anymore.

Which Account Type Allows What?

This confuses most NRIs. Let us make it crystal clear:

NRE-PIS Account: You can invest in equity delivery (buy and hold stocks). You can participate in IPOs. Investments are fully repatriable. You cannot trade F\&O or do intraday.

NRO-PIS Account: Similar to NRE-PIS but with NRO funds. Investments are on a non-repatriation basis. You can participate in IPOs. No F\&O or intraday allowed.

NRO Non-PIS Account: You can trade equity delivery. You can trade F\&O (since 2025, no CP code needed). You can do intraday trading. You can invest in mutual funds and bonds. Repatriation limited to $1 million per year.

If you want to trade actively, trade derivatives, or do intraday trading, Non-PIS is your only option.

Understanding Repatriation Rules

This is where many NRIs get stuck. Let me explain simply.

Repatriation means sending your money back abroad. If you want to transfer your investment gains to your UAE account, you need a repatriable route.

With NRE-PIS, both your principal and profits are fully repatriable. No annual limits. You can send all your money abroad after paying applicable taxes.

With NRO (PIS or Non-PIS), repatriation is restricted. You can transfer up to $1 million per financial year. This limit includes all NRO sources: rental income, dividends, investment proceeds, everything.

Here is an important question to ask yourself:

Do you plan to bring this money back to UAE/abroad? Or will you use it in India (retirement, property, family expenses)?

If you plan to retire in India or use the money there, Non-PIS with an NRO account works perfectly. The repatriation limit rarely matters.

If you definitely want to send money abroad, NRE-PIS gives you more freedom.

👉 Tip: Many NRIs use both accounts. NRE-PIS for long-term equity investments they want to repatriate. NRO Non-PIS for active trading and F\&O where profits stay in India.

What About Trading Restrictions?

NRIs face restrictions that resident Indians do not. Let me list them:

Restrictions for all NRIs: You cannot trade in commodity derivatives. You cannot trade in currency derivatives (except through banks). You cannot buy Sovereign Gold Bonds (but can hold existing ones). Certain sectors are off-limits (atomic energy, lottery, gambling, etc.).

PIS-specific restrictions: No intraday trading in equities. No short selling. No F\&O trading. No BTST trades.

Non-PIS allows: Intraday equity trading (since 2025). F\&O trading in stocks and indices. BTST trades. All subject to TDS deduction.

If you are a trader who wants flexibility, Non-PIS is clearly better. If you are a buy-and-hold investor who wants easy repatriation, PIS makes sense.

Fees and Charges: Which Costs More?

PIS accounts cost more. Here is why:

The bank charges for PIS issuance (one-time fee). Annual PIS maintenance charges apply. RBI reporting fees add up. Banks charge for PIS-related compliance.

Non-PIS accounts are simpler and cheaper. No special approval fees. No RBI reporting charges. Lower overall maintenance costs.

Let me show you typical brokerage differences:

Source: Zerodha NRI Charges

From September 2025, Zerodha reduced Non-PIS brokerage from Rs 100 to Rs 50 per order. PIS brokerage remains at Rs 200 per order.

Over a year, this difference adds up. If you make 100 trades worth Rs 1 lakh each, PIS costs you Rs 20,000 in brokerage. Non-PIS costs Rs 5,000.

👉 Tip: Compare NRI account charges across banks before opening an account. Some banks waive PIS charges for high-value customers.

Tax Implications: Same for Both

Good news here. Tax treatment is identical for PIS and Non-PIS accounts.

Equity Capital Gains (as of 2025): Short-Term Capital Gains (sold within 1 year): 20% plus surcharge and cess Long-Term Capital Gains (sold after 1 year): 12.5% plus surcharge and cess on gains exceeding Rs 1.25 lakh

Source: Income Tax Department

Debt Instruments: Short-Term (within 36 months): As per your tax slab Long-Term (after 36 months): 12.5% without indexation

TDS is deducted at source for NRIs. Your broker or bank handles this automatically. When you sell shares, the tax is deducted before you receive the proceeds.

If you live in UAE, you can claim DTAA benefits to avoid double taxation. India and UAE have a tax treaty that can reduce your burden.

For detailed guidance on NRI taxation, check our complete NRI taxation guide.

Which Account Should You Choose?

Let me make this practical. Here are common scenarios:

Choose PIS if: You earn in foreign currency and want to invest for retirement abroad. Full repatriation matters to you. You are a long-term buy-and-hold investor. You do not need F\&O or intraday access. You are comfortable with higher costs for regulatory peace of mind.

Choose Non-PIS if: You have income in India (rent, dividends, salary). You want to trade actively, including F\&O and intraday. Lower costs matter to you. You plan to use the money in India eventually. You are fine with the $1 million annual repatriation limit.

Consider both accounts if: You want flexibility. You have funds in both NRE and NRO accounts. You want to separate long-term investments (PIS) from active trading (Non-PIS).

Most NRIs today prefer Non-PIS because of its ease and cost-effectiveness. Unless repatriation is your absolute priority, Non-PIS offers more flexibility.

How to Open a PIS Account

Here is the step-by-step process:

Step 1: Open an NRE or NRO savings account with an authorized bank. Banks like HDFC, ICICI, SBI, Axis, and IDFC First offer PIS accounts.

Step 2: Apply for PIS permission from the same bank. Submit your passport, visa, PAN card, and overseas address proof.

Step 3: The bank sends your application to RBI for approval. This takes 7-10 business days.

Step 4: Once approved, you receive a PIS letter. Keep this safe.

Step 5: Open a demat and trading account with a SEBI-registered broker. Link it to your PIS bank account.

Step 6: Start investing through the linked accounts.

The entire process takes 10-15 business days. Some banks now offer online NRI account opening which speeds things up.

👉 Tip: Choose a bank that partners with your preferred broker. Zerodha partners with HDFC, ICICI, Axis, IDFC First, IndusInd, and Yes Bank for PIS accounts.

How to Open a Non-PIS Account

Non-PIS is simpler:

Step 1: Open an NRO savings account with any Indian bank. Most banks let you do this online now.

Step 2: Open a demat and trading account with a broker. Link it to your NRO account.

Step 3: Complete KYC verification. If you are in India, you can use Aadhaar e-sign. If abroad, you may need to courier signed documents.

Step 4: Once approved, you can start trading.

Total time: 3-7 business days.

No RBI approval needed. No PIS letter required. Much faster and simpler.

Can You Have Both PIS and Non-PIS Accounts?

Yes. Many NRIs do this.

You can have: One NRE-PIS account for repatriable equity investments. One NRO Non-PIS account for F\&O trading and other investments.

This gives you maximum flexibility. Your long-term equity portfolio stays repatriable through NRE-PIS. Your active trading happens through NRO Non-PIS.

Some brokers allow you to link both NRE and NRO accounts to a single trading account. You choose which account to use for each trade.

Common Mistakes to Avoid

We see these errors regularly:

Mistake 1: Opening PIS when you only want to trade F\&O. Solution: You need Non-PIS for F\&O. PIS does not allow derivatives trading.

Mistake 2: Assuming all profits are automatically repatriable. Solution: Only NRE-PIS profits are fully repatriable. NRO funds have limits.

Mistake 3: Not considering costs over time. Solution: PIS costs add up. Calculate your annual trading costs before choosing.

Mistake 4: Ignoring the repatriation limit. Solution: The $1 million limit applies to all NRO outflows, not just investments. Plan accordingly.

Mistake 5: Opening multiple PIS accounts. Solution: RBI allows only one PIS account. If you switch banks, close the old one first.

What About Mutual Funds?

Here is good news for mutual fund investors.

You do not need PIS or Non-PIS for mutual funds. You can invest directly using your NRE or NRO account through the folio-based route.

At Belong, we help NRIs invest in GIFT City mutual funds with special tax advantages. No demat account needed. No PIS hassle. Zero capital gains tax for NRIs investing through GIFT City.

Funds like DSP Global Equity Fund and Tata India Dynamic Equity Fund are popular choices among our community members.

👉 Tip: If you are new to Indian market investing, mutual funds offer a simpler start than direct stocks. Professional managers handle stock selection. You avoid the PIS vs Non-PIS complexity entirely.

Alternatives: Investing Without the Complexity

Direct stock investing is not the only way to participate in Indian markets.

Consider these options:

GIFT City investments: Invest in USD-denominated products. No NRE/NRO complexity. Zero capital gains tax for NRIs. Use our NRI FD comparison tool to explore options.

Mutual funds: No PIS needed. Professional management. Start with as little as Rs 500 through SIPs.

Fixed deposits: Simple, safe, predictable returns. Compare best NRI FD rates across banks.

For NRIs uncertain about stock trading, these alternatives offer exposure to Indian growth without the regulatory complexity.

The Bottom Line

PIS and Non-PIS serve different purposes. Neither is universally better. The right choice depends on your goals.

Want easy repatriation and long-term equity holding? PIS with NRE. Want trading flexibility and lower costs? Non-PIS with NRO. Want both? Open both accounts.

If you are still confused, do not worry. Many NRIs feel the same way. The key is to start with your end goal. Where do you see this money 10 years from now? In India or abroad?

That answer will guide your choice.

At Belong, we help NRIs simplify their India investment journey. Whether you choose mutual funds, fixed deposits, or GIFT City investments, we are here to guide you.

Not sure about your current status? Use our free Residential Status Calculator to know where you stand.

Have questions? Join our WhatsApp community where many NRIs discuss exactly these topics. Get real answers from real people facing similar decisions.

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Sources

1. Reserve Bank of India - Portfolio Investment Scheme Guidelines: https://www.rbi.org.in
2. SEBI - NRI Trading Regulations: https://www.sebi.gov.in
3. Zerodha - NRI Account Updates 2025: https://zerodha.com/z-connect/business-updates/recent-updates-to-make-investing-easier-for-nris
4. Income Tax Department - Capital Gains Tax Rates: https://www.incometax.gov.in
5. Federal Bank - PIS Account Features: https://www.federal.bank.in/portfolio-investment-scheme