Investment Options For NRIs In India: 2023

Who is a Non-Resident Indian?

NRI or Non-resident Indian, in simplest words, is a person who is a citizen of India by birth but now lives abroad.

Who Is An Indian Resident?

• Any individual living in India by birth
• Or living in India for 182 days in the preceding financial year
• Or has lived for 60 days in that year specifically
• Or has been in India for continuous 365 days for the last four years

Any citizen of India who does not meet the above-mentioned criteria as the ‘Indian Resident' is a Non-resident of India and is treated as an NRI for paying the income tax.

To make it easier for the NRIs, the government has come up with a plethora of NRI investment options. Let us have a look at the investment options for NRIs and make your pick.

Fixed Deposit

The fixed deposits are popular even in the NRIs. The bank fixed deposits are considered the safest investment avenue for the NRIs to invest in India 2023. The NRIs investing in Fixed Deposits through their NRE, NRO, or FCNR accounts.

The interest rate depends upon

• Bank chosen for Fixed Deposit
• Amount invested
• Tenure of the Fixed Deposit

1. Fixed Deposit in the NRE Account

   Interest earned in India on an FD in the NRE account is tax-free. You may be taxed in your country of residence though.

   The interest rate ranges from 5% to 7% depending on the tenure.

2. Fixed Deposits In The NRO Account

   NRO account can be used to manage your Indian income, for example, rents, dividends from shares, mutual funds, etc. 

   You can remit a maximum amount of $1 million from your NRO account.

3. Fixed Deposits In FCNR Account

   A Foreign Currency Non-resident Account can be opened in any foreign currency. Foreign exchange fluctuation has no impact on FCNR deposits. The tenure may last from 1 to 5 years and the interest you earn is tax-exempted.

   Generally, banks and NBFCs’ offer a high interest rate on the high sum deposited for the long tenure. Fixed Deposits offer a high interest rate to NRI senior citizens.

   One should go for Fixed Deposits if they do not want to take any risks and can easily settle in normal returns.

National Pension Scheme

The National Pension Scheme is another reliable investment option as it is government-backed. Any individual aged between 18 years and 60 years can open the National Pension Scheme Account. An eNPS account can also be opened if you have Pan Card or Aadhar Card.

NRE and NRO bank accounts are widely considered while investing in NPS.

You can opt for…

1. Active Choice

   Where you decide asset allocation in

   • Equity
   • Corporate Bonds
   • Government Securities

   A maximum of 75% can be allocated towards Equity.

2. Auto Choice

   The asset is allocated automatically depending upon your age.

   You cannot decide the proportion of allocation under auto choice.

3. Withdrawal under National Pension Scheme

   If withdrawn before 60

   • Only 20% of the accumulated corpus to be received
   • Rest 80% must compulsorily annuitized

   If 60 years or older

   • 60% of accumulated corpus to be withdrawn
   • Rest 40% must be compulsorily annuitized

   National Pension Scheme will always be paid in Indian Rupees.

Mutual Funds

Mutual funds are an investment that is subject to market risk. Mutual funds offer high returns when compared to the bank fixed deposit. An individual should pick the fund houses as per the risk profile and financial objectives. Many fund houses are offering ample Mutual Fund schemes. Some AMCs have however restricted NRI investments from the USA and Canada.

The NRIs’ can invest in the mutual funds through the NRE or NRO accounts. The investment needs to be done in Indian rupees and not the foreign currency. The return rate offered by the mutual fund in India depends upon the type of fund invested (debt, equity, and hybrid) and also your time horizon.

Mutual Funds are investment option for NRIs as it offers some great returns over long-run.

Equity Investments

In case an NRI is an aggressive investor, then investing in equity is an ideal investment option. The NRIs can easily invest in the stock market of India within the portfolio investment scheme of RBI. The NRIs mandatorily should have an NRO/NRE account, a Demat account, and a Trading account to invest in the stock market of India.

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

Real Estate

Over the last decade, real estate prices have surely skyrocketed. The NRIs’ can easily buy properties in India and put them out for rent. This helps to fetch a handful amount. The present scenario provides an excellent opportunity for investment in real estate for the NRIs’ as affordability is at a higher point. Post the COVID-19, this sector has certainly drawn more investment from the NRIs in both the long and short term. Real estate is a fair way to invest at minimum risks.

Public Provident Fund

You can carry forward your Public Provident Fund (PPF) account that you opened when you were an Indian Resident. But, if you do not have a PPF account already, then the government does not provide any such benefits. Once a Non-resident Indian, you cannot extend the PPF account after the maturity period of 15 years.

Conclusion

If you are an NRI, you have ample options to invest in India. You just have to make the right choice as per your requirements and willingness of the amount for investment.

What better option to invest in the country where you lived once?

Invest wisely! Pick the best!