What Is the Best Investment for NRI in India?
SBNRI Team
answered on 18/09/2023
India’s growing economy is paving the way for various investment avenues. And the good thing is both residents and non-residents can be part of this investing journey. But how would a NRI invest in India and what are the best investment for NRI in India? This is something that’s long debated. Thankfully, we can resolve that for you.
Investment options for NRIs are more or less similar to those of the resident Indians, though there are a few guidelines as per RBI, FEMA, and SEBI that the investor needs to take into consideration while investing. Once that is adhered to, NRIs can invest in various options in India with ease.
Top NRI Investment Options in India
1. Mutual Funds
There’s nothing to be surprised about, NRIs can invest in mutual funds in India with ease. All you need to do is set up a NRI account with a partner bank. The account can be an NRO or NRE account as per the need of the NRI. Once the bank account is created, NRIs can apply for Mutual Fund KYC and invest in various mutual funds across India from the country of their residence.
NRIs can now download the SBNRI App and choose to invest from 2,000+ mutual fund schemes in India with ease. Make your NRI mutual fund investing dream a reality with the SBNRI app today.
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Pre-IPO can be a lucrative investment option for NRIs to invest in India. Pre-IPO market operates to allow investors to buy and sell shares of companies that are yet to be listed on the public exchange. These shares are private in nature and are sold via intermediary firms that help investors connect with various upcoming companies that are going to be listed in the next 2-3 years. Investing in the pre-IPO market allows you to enter early into the ownership.
NRIs are well within the legal rights to invest in real estate either residential or commercial. However, it’s become a recent trend of NRI’s shifting gaze to commercial properties as a means of high rental yields and higher returns. NRIs can invest in commercial real estate on fractional ownership starting from a minimum spend of Rs 10 lacs.
4. NRI Fixed Deposits
Fixed deposits are one of the most common investment choices for NRIs looking to invest in India. NRI Fixed Deposits come in three different types:
- Non-Resident External (NRE) Fixed Deposit: NRE FD accounts are opened by NRIs to deposit their foreign earnings in Indian rupees. NRE FD account interest rate ranges from 2.75% to 7% p.a. The interest earned in an NRE account is tax-free in India but may be taxed in your country of residence. Both the principal as well as the interest earned can be fully repatriated.
- Non-Resident Ordinary (NRO) Fixed Deposit: NRIs can open an NRO Fixed Deposit account to maintain and save their income generated in India, such as dividends, rental income, pension, etc. You can earn up to a 7.30%* interest rate on these accounts. Interest earned on the funds is taxable in India at 30% along with surcharge and cess.
- Foreign Currency Non-Resident [FCNR(B)] Fixed Deposit: An FCNR (B) fixed deposit account allows NRIs to deposit funds in a foreign currency in India, such as USD, GBP, EUR, JPY, AUD, CAD, SGD, HKD, and others. You can deposit money for different terms, like 12 months, 24 months, 36 months, 48 months, or 60 months. An FCNR account helps NRIs avoid currency fluctuation. FCNR FD interest rates vary based on the currency. The interest income is not taxable in India and both the principal amount as well as the interest are completely repatriable.
5. NRI Investment in Equity
Non-resident Indians can directly invest in the stock market in India under the Portfolio Investment Scheme (PIS) of the RBI. NRIs need to have the following accounts for equity investments:
- Non-Resident External (NRE) Account
- Non-Resident Ordinary (NRO) Account
- NRI Demat Account
- NRI Trading Account with a registered broker
Dividend income and the capital gains earned by NRIs from shares and equity-oriented schemes of mutual funds are taxed in India.
To ask any question related to NRI investment in India, you can schedule a call by clicking the button below or download SBNRI App from the Google Play Store or App Store. You can also use the SBNRI app for investment in stock market/ mutual funds, NPS, Fixed Deposit, Pre-IPO, Asset Finance, Commercial Real Estate, Indian Startups Funds, NRI account opening, etc. To ask any questions, click on the button below. Also, visit our blog and YouTube channel for more details.
Related Questions
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