India is fast becoming an economic powerhouse. The massive development in the last two decades has made the country one of the attractive destinations for investors from around the world. At the same time, various investment options for NRI have led Indian Diaspora living in different countries like the US, Europe, and across the globe to make successful investments here.
If you are new to NRI investment, you must know what is NRI investment? What are the best options for NRI investment in India? What are the benefits of investment in India? Find out the answers below.
According to the rules, NRI or Non-resident Indian is a citizen of India who spends less than 183 days in the country in a given financial year. As a non-resident Indian, you don’t have to pay taxes. NRI investment is the investment opportunity that can be utilized by the NRIs to make profits and earn more money.
So, what is the best investment for NRI in India? There are many options you can choose from. We have listed the best 5 options which can give you a great return on investment and profits.
Fix deposits or bank deposits is one of the most common types of investment made by NRIs in India. As the name indicates, you deposit money in your account for a fixed time period. You can withdraw the money plus the interest once the period ends.
There are generally three kinds of fixed deposit accounts for NRIs namely;
The easy deposit process, repatriation of funds, and tax exemption for the interest make it an attractive option.
If you are a risk-taker and would want to invest aggressively, equity is the best option for NRIs. According to RBI, NRIs can invest in the stock market under the Portfolio Investment Scheme – PIS.
A dedicated NRE or NRO bank account is necessary. Moreover, a SEBI trading account plus a Demat account that holds shares in electronic form are a must for equity investments by NRIs.
Mutual funds are riskier than fixed deposits. But it provides a better return on investment. NRIs would need a bank account in India and use India Rupees for mutual fund investments as foreign currencies are not allowed. Predominantly, there are two types of mutual funds; equity funds and debt funds.
National Pension Scheme is a government-backed scheme with tax benefits. Those between the ages of 18 and 60 can use NPS. There are two types of NPS: Tier 1 Account and Tier 2 Account with different rules and regulations.
It is a safer option than bank deposits or in that case PPF. NPS offers an annual interest rate of 12-14% as well. The matured amount is exempted from tax.
NRIs can invest in other options like Government securities, treasury bills, debentures, national saving certificates, debt instruments, etc. The tax benefits or implications may differ from one option to another.