What is an NRO Non-PIS account and how is it different from an NRE account?

An NRO Non-PIS account enables NRIs to invest in eligible Indian equities and mutual funds using funds held in an NRO account. It operates outside the Portfolio Investment Scheme (PIS) and is primarily used for managing investments through an NRO savings account.

Unlike an NRE account, which is used for holding and investing foreign income or eligible repatriated funds in INR, an NRO account is commonly used to manage income earned in India.

Features of an NRO Non-PIS account

No PIS letter is required.
No daily RBI trade reporting is required.
Bank linking: Can be linked with an NRO savings account held with any RBI-scheduled bank.
Investments: Supports eligible mutual fund and equity investments.
F&O trading: You can activate the F&O segment with FYERS. A Custodial Participant (CP) code is not mandatory.
Intraday and BTST: Intraday and BTST trades are not permitted.

Types of bank accounts available to NRIs

NRIs are not permitted to maintain resident savings accounts in India under FEMA. Instead, they can use designated NRI bank accounts based on the source and intended use of their funds.

NRO (Non-Resident Ordinary): Used for managing income earned in India and eligible inward remittances.
NRE (Non-Resident External): Used for holding and investing foreign income or eligible repatriated funds in INR.

These accounts differ in their repatriation, taxation, funding, and investment eligibility.

Key differences between NRO and NRE accounts

Feature	NRO Account	NRE Account
Purpose	Manage income earned in India, such as rent, dividends, and pension	Hold and invest foreign income or eligible repatriated funds in INR
Source of deposits	Indian earnings, inward remittances, and eligible NRO transfers	Inward remittances and eligible transfers from other NRE accounts
Repatriation	Up to USD 1 million per financial year, subject to applicable documentation and regulatory requirements	Principal and interest are repatriable, subject to applicable FEMA and RBI guidelines
Taxation	Interest is taxable in India	Interest is tax-free in India, subject to applicable tax rules
F&O trading	F&O can be activated with FYERS. A CP code is not mandatory	Not allowed
Mutual fund investments	Allowed, subject to applicable eligibility and fund house restrictions	Allowed, subject to applicable eligibility and fund house restrictions
PIS letter requirement	Not required	Required for equity investing through the NRE PIS route
RBI reporting	No daily PIS reporting required	Applicable reporting is handled through the designated PIS bank
Bank linking with FYERS	An NRO savings account with any RBI-scheduled bank can be linked	NRE PIS is supported through FYERS-supported PIS banking partners
Joint holding	Allowed subject to applicable NRO account rules	Allowed subject to applicable NRE account rules

Note: Repatriation refers to transferring eligible funds from India to an overseas account, subject to applicable FEMA and RBI requirements.

What if...

Scenario	Solution
You want to trade in F&O	You can activate the F&O segment with FYERS using your NRO Non-PIS setup. A CP code is not mandatory.
You want to link your existing NRO bank account	You can link an NRO savings account held with any RBI-scheduled bank.
You prefer repatriable investments through an NRE account	Consider the NRE PIS route, subject to applicable PIS requirements and supported banking arrangements.
You still operate a resident savings account	Your banking status must be updated to the applicable NRI account type before investing as an NRI.
You want to trade intraday or BTST	Intraday and BTST trades are not permitted under the NRO Non-PIS setup.