Best NRI investment options in India - The misconception

Best NRI investment options in India - The misconception - The Economic Times (2024)

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Sep 05, 2023, 05:36:07 PM IST

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The misconception

It is a common misconception that Non-resident Indians (NRIs)are not allowed to invest in India. The reality is that they can easily invest just by following guidelines set by the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) under the Foreign Exchange Management Act (FEMA). There are a lot of NRI investment options in India. A look at some of the investment options for NRIs in India.

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Fixed Deposits

FDs are said to be the safest investment option for NRIs. You can invest up to a certain amount for a particular period and get guaranteed returns on maturity. NRIs are allowed to open their FD account with both a bank or a NBFC in India. The only drawback is that the investor will not be able to withdraw their money before maturity. NRIs can invest in three types of FDs in India - Non-Resident External (NRE) FD, which allows an NRI to invest their foreign earnings in India, Non-Resident Ordinary (NRO), FD, which allows them to invest their income generated in India, or Foreign Currency Non-Resident (FCNR) FD, which allows them to deposit funds in a foreign currency.

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Mutual Funds

Mutual funds are the most popular choice amongst NRIs. It provides high returns and are not as risky as the stock market. MFs allow investors to select between the equity, hybrid, and debt funds as per their risk appetites and investment objectives. One can invest in a mutual fund scheme through a Systematic Investment Plan (SIP) or lump sum.

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National Pension Scheme

Government allows NRIs to invest in NPS. They can open their account with any authorised service provider by providing a few documents like PAN Card, Aadhar card, and their NRO or NRE bank account details.

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Real estate

According to financial experts, real investment is the best investment for nri as the government policies are favourable for NRIs. It is also preferred as there is a high chance of possibility of earning significant returns. To purchase a property in India, NRIs can use either NRE bank account, NRO bank account, or FCNR bank account.

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Stock markets

Investing in stock market is considered to be the best investment option for NRIs who are willing to take risk to get high returns. They can invest in the shares of different companies and earn profit through capital appreciation under the Portfolio Investment Scheme (PIS) of the RBI. To be able to trade in India, the investor needs to have a NRE or NRO bank account, a demat account and a trading account.

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