A PIS or Portfolio Investment Scheme account is a regulatory account for facilitating investment in Indian shares for NRIs.
Once you move overseas from India, the way you look at your savings and investments changes drastically . You now have new systems to use and new rules to understand. One such regulation is the use of the Portfolio Investment Scheme or PIS account for making investments in the Indian stock market. What is it, and does it still hold relevance with digital NRI banking solutions? Learn more in this detailed guide.
What is a PIS account, and how does it help NRIs?
A PIS or Portfolio Investment Scheme account is a regulatory account for facilitating investment in Indian shares for NRIs. It helps you stay compliant with Indian law, as every buy and sell transaction is reported to the RBI through the linked bank.
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You can use this account to directly invest in equities on a repatriable basis, which means you can send back the principal and profits to your overseas account. The account is linked to a Non-Resident External or NRE account. The entire process is simplified online through banks with efficient financial solutions, like IDFC FIRST Bank.
How NRI investing has changed over the years
NRI investing today looks vastly different from what it used to be a decade ago. Here’s what you can expect:
- Flexible routes
Earlier, investing in Indian equities meant a PIS account. There is increased flexibility now with NRI banking and digital tools.
- Digital-first investing
Banks like IDFC FIRST Bank have future-focused online platforms that enable faster remittances and simplified KYC, which transforms your investing experience.
- Continued advancements
Where we’ve reached today with banking efficiency is only expected to get better with tech-focused improvements in NRI banking and investment avenues.
PIS vs Non-PIS investing for NRIs
With increased flexibility, you can invest either through a PIS account or through a non-PIS investing account. Learn about the difference as outlined below:
- PIS investing
When you choose a PIS investing account, your equity trades are simplified and reported, and repatriation is possible. You link it to an NRE bank account to put your foreign income to good use.
- Non-PIS investing
A non-PIS investing account helps you invest with a long-term perspective with your Indian income, as it is linked to a Non-Resident Ordinary or NRO account.
When is a PIS investing account still required?
Even with the new advancements, some situations continue to demand the use of the traditional route. Here’s when choosing the PIS setup makes sense:
- You’re actively trading and value repatriation
If you’re involved in frequent direct investments in equity-oriented assets, PIS investing through an NRI account makes sense. It helps you freely move your foreign income and grow your savings.
- You want the RBI-tracked transparency
If you prefer the comfort and efficiency of automatically reporting your investments and staying on the right side of law, then you can conduct monitored trading through a PIS investing account.
- You want an integrated setup
Your investments are reported and tracked through an NRI account, facilitating integrated management. You can also view your investments online.
When can you do without a PIS investing account?
In other cases, you can invest with your NRI bank account without the extra layer. Some examples include:
- You’re investing with a long-term vision
If you want to focus on mutual funds or hold stocks without actively trading, the PIS route may not add much value to your setup.
- You’re comfortable with the non-repatriable route
You have the option to invest through an NRO-linked non-PIS investing account, where the investment journey is just as smooth. However, you can repatriate up to a limit of USD 1 million.
- You prefer fewer touch points
When managing your investments directly through an NRI account is more convenient, with the backing of reliable banks like IDFC FIRST Bank, you can proceed without a PIS investing account.
Final words
With modern advancements, NRI investing has become simpler and straightforward. While PIS investing still has its place, you can explore convenient investing through NRI banking as well as non-PIS investing. Or you can combine both approaches for different investments. You have complete flexibility, and you can manage your investments, regardless of the approach, through banking platforms and mobile apps.
