Business

NRI Investment Planning – Things You Don’t Know Yet

admin 4 years ago 3 min read

NRIs can achieve their financial goals by making investments in India. However, there are a few things that they should know before starting to invest.

Read on to find out things that NRIs might not know about NRI investment planning.

Nowadays, more and more NRIs are starting to make investments in India. They are looking for various investment plans in India that can earn them significant returns. Therefore, creating a good investment plan has become essential for NRIs.

But before creating an investment plan, an NRI should understand a few things, such as-

NRI Bank Accounts

As an NRI, a person can open a non-resident external (NRE account), foreign currency non-resident (FCNR account), and non-resident ordinary (NRO account). This is because NRIs aren’t allowed to have a resident Indian savings account. NRIs should understand these accounts before selecting an account.

NRE Account- NRE accounts allow NRIs to transfer their foreign currency to India. They can use this account to make investments. This account can help in the easy repatriation of money.

NRO Account- NRO accounts are a good option if an NRI is earning income in India, such as rental income. Repatriation of money can also be done. However, additional documents and processes are required. Furthermore, NRIs can invest in Indian currency FDs in NROs.

FCNR Account- It is a type of fixed deposit account that allows NRIs to deposit income earned abroad.

Various Investment Options

An investor can choose from a wide variety of investment options, such as equity, mutual funds, etc.

Apart from looking at investment options, NRIs should also build an emergency fund and health insurance. These are important for creating a good financial plan. This is because they can safeguard an NRI’s investments in case of an emergency.

Let’s take a look at some of the investment plans that can be beneficial for NRIs-

Direct Equity

NRIs can invest in the stock market. Investments made in the stock market can help a person earn substantial returns. However, it is recommended to stay invested for a longer term.

Real Estate

NRIs can invest in residential as well as commercial real estate. They can also take loans to purchase a property. However, NRIs aren’t allowed to invest in agricultural land, farms, and plantations.

ULIP

A unit-linked insurance plan (ULIP) is a policy that provides life cover as well as returns. It can provide financial assistance in case the policyholder passes away during the tenure of the policy. Furthermore, it can provide good returns as it allows the investor to invest in various investment options.

Corporate FDs or Non-Convertible Debentures (NCDs)

NRIs can invest in corporate FDs or NCDs if they are allowed to participate by the issuer.

Government Securities

NRIs are allowed to invest in government securities and Treasury Bills on a non-repatriable or repatriable basis.

Bonds

NRIs can invest in bonds, such as PSU bonds, if the issuer allows.

There are various investment options for NRIs. However, it is crucial to understand them before investing. Keep the aforementioned points in mind before investing.