Top 5 Stable NRI Investment Options in India for 2018by Samantha Kennedy Consultant, writer
India has a strong NRI community, who live in all corners of the planet. As per a recent UN report, 16 million Indians were living in foreign countries as of 2015. This number shoots up to 30 million if you include Person of Indian Origin (PIO).
A majority of NRIs want to include Indian investments in their financial portfolio. The rapid growth of the country and falling Indian rupee rates make investments in India a hugely profitable choice for NRIs. Above all, NRIs love the emotional gratification of being connected to the motherland through these investments.
Sadly, there’s a lot of confusion regarding NRI investment in India. Not many are aware of the multitude of options available out there. Worry not, here in this article; you can find all that you need to know about stable investment choices for NRIs in India.
Let’s get started.
1. Bank Fixed Deposits
Just like resident Indians, bank FDs are one of the most popular choices of investment among NRIs too. It works just like a regular FD. You deposit a particular sum of money for a pre-agreed term, and you enjoy a guaranteed interest return on it.
NRIs can use the following three types of accounts to start an FD.
2. Mutual Funds
Mutual fund is another increasingly popular investment choice among NRIs. Whether you’re looking for short-term or long-term investments, you can find the right mutual funds that match your risk profile and investment portfolio.
To invest in MFs, NRIs must either have an NRO or NRE bank account. All the investments are made in Indian currency. NRIs can invest in debt-oriented, equity-oriented, or hybrid mutual funds.
If you are an NRI residing in the US or Canada, your mutual fund investments will have some limitations based on the FATCA rules. Other country NRIs can invest in MFs in India with no restrictions.
3. Government Securities
It is a tradable bond that is issued by the Government of India. It’s used to raise funds for special projects and other developmental works. These can be either short-term (called as Treasury Bills, with a maturity period of less than a year) or long-term (government bonds with terms more than a year).
Government securities are considered very safe and stable investment options as the Indian Sovereign backs them.
Some of the popular types of government bonds among NRIs include:
· Treasury bills
· Fixed rate government bonds
· Floating rate government bonds
· Capital index bonds
4. National Pension Scheme
This is a cost-effective retirement scheme that is backed by the government of India. Any NRI who hasn’t given up his/her Indian citizenship, and is aged between 18 to 60 years, can invest in the NPS. NRIs can choose between two types of accounts:
· Tier 1 – This is basically a retirement plan, and the investment is locked until retirement. On maturity, a part of the corpus is available for lump-sum withdrawal, while the rest is mandatorily used to buy an annuity.
· Tier 2 – This account doesn’t have any restrictions, and you can withdraw from the account whenever you wish. However, you can open a tier-2 plan, only when you already have a tier 1 NPS account.
5. Certificate of Deposits
These are non-negotiable market instruments that are issued by scheduled commercial banks in India. They are released in the form of promissory notes or demat forms. Some of the benefits of CDs include higher liquidity as they can be easily transferred from one person to another, with not much of a formality. CDs are best suited for short-term investment options.
These are the top five stable investment choices for NRIs in India for 2018. Make use of these investment plans and build your financial portfolio, irrespective of where you reside in the world.
Created on Mar 15th 2018 04:37. Viewed 217 times.