Money Matters: 6 Smart Investment Choices For NRIs In India

Due to India’s tremendous industrial growth over the past several years, it has been a popular place for Foreign Direct Investments (FDI). For every NRI, this increases the value of investments made in India.

Most people have the impression that Non-resident Indians (NRIs) cannot make investments in India. However, by simply adhering to the criteria established by the Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI) under the Foreign Exchange Management Act (FEMA), people may invest with ease. In India, there are several alternatives for NRI investments that you must consider investing in if you are an NRI, take a look:

1. Fixed Deposits (FD)

For NRIs, foreign direct investments (FDs) are considered the safest investment option. You can invest up to a specific sum for a set duration of time, with guaranteed returns upon maturity. This investment can help you earn a fixed-interest income. There are three types of FDs that NRIs can invest in India:

• Non-Resident External (NRE) FD
• Non-Resident Ordinary (NRO) FD
• Foreign Currency Non-Resident (FCNR) FD

2. Equity

Through the Reserve Bank of India's portfolio investment plan, NRIs can make investments in the Indian stock market with ease. The following accounts are required for equity investments by NRIs:

• NRI Trading Account with a registered broker
• Non-Resident External (NRE) Account
• Non-Resident Ordinary (NRO) Account
• NRI Demat Account

3. Mutual Funds

For NRIs, mutual funds are the most popular option. It is less hazardous than the stock market and offers large rewards. A lump amount or a systematic investment plan (SIP) can be used to invest in mutual funds.

Investors using mutual funds (MFs) can choose between equity, hybrid, and debt funds based on their investment goals and their capacity for risk.

4. Real Estate

Many financial analysts claim that since government regulations are beneficial to NRIs, real estate is another good investment option for NRIs. It is also favoured since there is a good potential that substantial profits might be made. NRIs can use an FCNR bank account, an NRO bank account, or an NRE bank account to buy real estate in India.

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5. National Pension Scheme

The National Pension System (NPS) is a long-term retirement savings scheme designed by the Government of India. Contributions to NPS can include those made by NRIs from their NRO/NRE accounts. A long-term retirement savings plan for Non-Resident Indians (NRIs) aged 18 to 60 is called the NPS for NRIs. The PFRDA's criteria are used by the chosen pension fund management to choose how to invest the money.

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6. Stock Markets

For NRIs who are ready to take on some risk in exchange for big returns, stock markets have been considered to be another good investment option. Under the RBI's Portfolio Investment Scheme (PIS), an NRI can invest in the shares of various firms and profit from the appreciation in value. For this, though, NRIs require a trading account, a demat account, and an NRE or NRO bank account.

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