Are these rates high?

Hey.

Im about to open an NRI Demat account with ICICI. Their rep has given me the following rates. Can you please tell me if the rates are okay? OR would I be better off opening a resident Indian account? Thanks for your help.

Here are the rates:

The charges for opening and maintaining an ICICI Direct Account is as mentioned below:

*
One time Account Opening charges: - Rs.4,000.
*
Demat (Annual Service Charges)
*
* In case of a Foreign Address - Rs.1,200. (Rs.1,150 for customers receiving statement by E-mail)
*
* In case of an Indian Address - Rs.500 (Rs.450 for customers receiving statement by e-mail ).
*
PINS Charges ( Apart from the Annual Service Charges ) - Rs.1,000 annually for the maintenance of the PINS Approval.
*
You need to maintain an Average Quarterly Balance of Rs.10,000 in your savings account.

You can open the account under PINS as well as NON PINS. PINS (Portfolio Investment Scheme) is a scheme of the Reserve Bank of India (RBI) under which the 'Non Resident Indians (NRIs) can purchase and sell shares of Indian Companies on a recognized stock exchange in India by routing all such purchase/sale transactions through their account held with a Designated Bank Branch. If you have acquired any shares through the primary market i.e., IPO's or have purchased shares prior to the Portfolio Investment Scheme (PINS), ICICIdirect.com provides you with an exit route for selling these shares in the fastest, easiest and the most hassle free manner by providing you with a Non Pins Account. Through your Non Pins Account, you can sell shares acquired through the Primary market and also sell shares acquired in the secondary market other than through the PINS route. However you cannot buy shares from the Non-Pins account.

You may opt for the accounts as per your requirements in the Account Opening form.

*** Conditions Apply

This service is not available to countries, where availing of such services would be contrary to any applicable law or regulation or which would subject ICICI Bank Limited, ICICI Securities and any of their respective affiliates or group companies to any registration or licensing requirement within such jurisdiction.

Further, there are two types of brokerage plans for the Resident Indians i.e.
1. Fixed plan
2. Variable plan.

For the NRI's, the brokerage slabs are as follows:

SLABS (Turnover per Calendar Month): Brokerage

Trades above Rs.50,00,000 (Above Rs.50 lacs): 0.50%
Rs.25,00,001 to Rs.50,00,000 (Rs.25 lacs to Rs. 50 lacs): 0.75%
Rs.10,00,001 to Rs.25,00,000 ( Rs.10 lacs to Rs.25 lacs): 0.90%
Rs.5,00,001 to Rs.10,00,000 ( Rs.5 lacs to Rs.10 lacs): 1.00%
Up to Rs.5,00,000/- (Rs. 5 lacs): 1.25%

For NSE Trades Brokerage is calculated on a per share basis and is rounded off to the fourth decimal.

For BSE Trades Brokerage is calculated on a per share basis and is rounded off to the second decimal.

SERVICE TAX OF 12.36 % of BROKERAGE will be charged additional. The service tax is calculated per share and rounded off to four decimals. Service tax rates and other statutory levies are subject to change from time to time.

SECURITIES TRANSACTION TAX (STT) EQUITY - STT is calculated on the Weighted Average Price of the client for a particular day. This is also calculated on the value and rounded of the second decimal.

STT at the rate of 0.125% of turnover will be charged in addition to the Brokerage on all Delivery Trades

The final value of Brokerage and Service Tax is arrived at by multiplying the per share value in four decimals with the Quantity. This value is then rounded off to two decimals.

The minimum value of the order that would be accepted would be Rs. 500/- and the minimum brokerage would be Rs.25/- per trade. The minimum brokerage is Rs.25/- or 2.5% of the trade value whichever is lower. The brokerage is inclusive of bank’s charges for Portfolio Investment Services (PINs), demat market transaction charges and postage charges. Service Tax and Securities Transaction Tax (STT) will be charged additional as per the applicable rate.

I have been trying to open trading+DEMAT accounts and based on my enquiries ICICI is the most expensive in terms of initial fees and brokerage. I have looked into Kotak who are also expensive (Approx Rs 3000/- initial charges & >1% brokerage), HDFC (Approx Rs 2750/- & 0.75%), Sharekhan (Approx Rs 2000/- & ?0.5% (appears to be variable)). I have written e-mails to Geojit, Karvy and couple of others who have not responded.

The above is only about cost, quality of service seems to be poor across the board, don't know who is least bad. Resident Indian users of this forum have compared quality of service in other threads, please read them.

Its not good idea to open resident accounts while you are a NRI, they can easily find out through PAN No as you would not be filing taxes/returns in India, you would be breaking a number of laws, my view bend rules but don't break them.

Hi ,

Enquire with Sharekhan.They surely woudl offer less brokerage than ICICI.

Raju

Hey Jali.

Thanks a lot for your help.

I'm a bit wary of going for individual accounts with separate service providers. I want a tightly integrated 3-in-1 account. Thats why ICICI. Its got horrible reviews, thats why maybe I would go for HDFC or IDBI Paisabuilder.

As far the resident/nri address is concerned, I know its illegal to file an indian address while being an NRI.

How about this idea - I open the 3-in-1 account on my brother's name with his PAN details. He is still in college in India. Once the account is opened, I would get the usename/passwd and operate it from abroad. Would that land me or him in trouble?

Would you be arranging for tiffin services in Jail, or would you be just sending him the money?

Why do u wanna invest in India.
You must be having equally good opportunities in US ( if u r there ) with mouth watering brokerages....and simple account opening procedures

After all, a technical analyst can trade any liquid market, and what better liquid market than the US ones.

Aww you mean to say thats not allowed as well? Hmm.

I am also sceptical about individual accounts, actually for NRIs its 4-in-1 if you include the mandatory Portfolio Investment Scheme (PIS) account. I have been trying to open Savings and PIS accounts with HDFC and the DEMAT & Trading accounts with Sharekhan, have been having lot of problems with paper work, I now kind of have decided to go with HDFC for all the accounts(choice of HDFC is mainly because of proximity to my home in India, my family members can liaise with the bank if required), hopefully things will be smooth as everything will be under one roof.

Your idea of trading with your brothers accounts is fine and lot of people do this but consider (1) how your brother is going to account for all that money, especially if he is college student (I hope you know that you can lend money only for family maintainance and not for business for which you need RBI clearance) (2) You will have to trust your brother completely.

Lending money for business may require clearance, but if the money is remitted from abroad, does it matter? I mean, I can transfer the money to his account from my NRE account, which is not subject to income tax.

Also, the tax on profits would be deducted from his account at source. So is this whole idea a problem?

I've never worked in India much, so I'm a bit naive about matters like these.