Who is an NRI?
The people living abroad are classified into three major categories, namely Non-resident Indians (NRIs), Overseas Citizens of India (OCIs), and Persons of Indian Origin (PIOs).
An Indian Citizen who lives in a foreign country for more than one hundred and eighty-three days in a financial year for employment or business will be considered an NRI. NRI abbreviation is expanded to be Non-resident Indian.
Investment Options for NRIs in India
Following are some of the top investment options for NRIs in India in the year 2025:
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Public Provident Fund
One of the safest investment options in India is investing in the Public Provident fund. The Public Provident Fund is a scheme backed by the Indian government. Any Indian or non-Indian resident is permitted to invest in the Public Provident Fund. The present return rate on the investment of PPF is 7.1 per cent per annum. The Public Provident Fund has a lock-in period of 15 years. The maximum sum that can be invested is Rs 1.5 lakh annually. Moreover, investing in the Public Provident fund also offers tax deductions within Section 80C of the IT Act.
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Fixed Deposit
The fixed deposits are popular even in the NRIs. The bank fixed deposits are another safe investment avenue for the NRIs to invest in India in 2025. The NRIs can begin with the fixed deposit with their NRE, NRO or FCNR accounts. The interest rate depends upon the bank, the sum that one deposits and the term of the deposit. The banks and NBFCs mostly offer high interest rates on the high sum deposited for the long term. A high interest rate is offered to senior citizens. Investing in the fixed deposits is ideal when the NRI is risk-averse and does not mind settling for the average returns.
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National Pension Scheme
The National Pension Scheme is another reliable investment option as it is government-backed. Investing in the National Pension Scheme comes along with tax benefits. The accumulated amount during maturity remains tax-exempt. Investing in the NPS is as safe as investing in the FD or a PPF. Any individual aged between 18 years and 60 years can invest in the NPS and offer yearly interest of 9% to 12%.
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ULIPs- Unit Linked Insurance Plans
ULIPs offer a combination of insurance and investment which is ideal for moderate to high-risk investors. With a 5-year lock-in, partial withdrawals, and tax benefits under Sections 80C and 10(10D), ULIPs provide flexibility to switch funds and redirect premiums. They offer guaranteed death benefits and long-term growth potential, which can be an ideal choice for NRIs to invest their money in India
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Mutual Funds
Mutual funds are an investment that has moderate 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. The NRIs can invest in mutual funds through 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.
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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 and the trading account to invest in the stock market of India.
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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.
Conclusion
Investing in India helps create wealth and also helps the country's economy. For NRIs seeking to invest in India in 2025, a diverse range of opportunities awaits. By carefully considering their individual circumstances, financial goals, and risk tolerance, NRIs can strategically allocate their funds across various asset classes and make well informed financial decisions.
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