A Tax-Free Savings Account (TFSA) is a type of account where all your contributions, interest earned, capital gains and dividends are tax-free and can be withdrawn without any tax implications. You can hold a plethora of investments in a TFSA such as Mutual Funds, stocks, bonds, Real Estate, ETFs, securities and actual cash. The TFSA is available for individuals who are 18 years of age or above and are residents of Canada. The Tax-Free Savings Account can be used for any purpose. In this article, we will browse through the elements of the TFSA focusing on how Non-Resident Indians (NRIs) can benefit from this account. So, let’s begin!
Investments in India for an NRI holds immense potential. NRI Investment encompasses a plethora of investment vehicles that most of the people are unaware of. There is this huge range of opportunities where NRIs can invest and generate lucrative returns.
Let’s glance through the basic segregation here:
- NRI Bank Accounts: Open an NRE, NRO or FCNR Bank Account and earn tax-free interest on your deposits (for NRE & FCNR)
- Investment in various Asset Classes: Most of the asset classes like Mutual Funds, Stocks, Portfolio Management Services, National Pension Scheme, etc. are available for NRIs to invest money in and earn maximum profits
- Real Estate: Real Estate is another investment tool for NRIs in India with a great return on investment (ROI)
- Gold Investments: Gold is another investment tool in India. It is an excellent choice given the rate of growth in the prices over the years. You can choose from a variety of options such as physical gold, Gold Exchange Traded Funds (ETFs), Gold Bonds etc.
- Insurance: Insurance is another investment tool in India, especially for NRIs. Everyone must get insurance as a part of Financial Planning
Financial Planning in India: An Approach
Mrs. Shruti Agarwal (CFA, Co-Founder of CAGRFunds) iterates: There are 3 fundamentals of Financial Planning:
- Emergency Fund
- Health Insurance
She stresses on the importance of managing these three pillars of financial planning. NRI Investment in India must be targeted at either or all of these approaches. There is a need to have an emergency fund to tackle emergencies which should generally be three times of your salary. A Health Insurance to battle the risks of accidents one might encounter and Investments to multiply funds by generating better returns.
NRI Investment in India: An Outlook
Investments in India by an NRI can be looked upon as a gesture to secure the future and aim at a happy life after retirement. Most NRIs go ahead with investments with a vision to create a corpus. This fund can be for any reason suited to the NRI such as their children’s marriage, education, etc. or maybe to take a world tour.
Investments are also done in kinds, such as real estate, gold etc. Objectives can fluctuate between liquidity or greater returns on investments. The diversification that investments in India provide ranges widely in all major financial sectors. With time, NRIs have gained easy and convenient access to these opportunities and with the help of market experts, tremendous returns can be garnered.
In this category, you will find questions and articles spanning all the way around investments in India for an NRI. With the incessant growth of NRI Investment in India, it is necessary that an NRI knows about every option there is to experiment and extract benefits from.
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The Forex Market has intrigued many NRIs all over the globe. It is the only market that functions 24 hours a day except for the weekends and provides one of the best possibilities of returns. The Foreign Exchange Market, as we know it, has an average daily turnover of more than USD 6.6 Trillion. Now, many NRIs want to know how they can participate in Indian Forex Trading and understand the fundamentals of what’s illegal and what’s legal. In this article, we will understand what aspects of forex trading in India can an NRI opt for and what they can not. Let’s Begin!
This Monday, Union Finance Minister Nirmala Sitharaman presented the Union Budget 2021 in Parliament. Let's take a look at the top 20 key takeaways from the Budget.
Sukanya Samriddhi Yojana for NRI: Sukanya Samriddhi Yojana (SSY) is a government savings scheme as a part of the Beti Bachao, Beti Padhao Yojana by the Government of India. The scheme enables guardians of any Indian girl below the age of ten years to open a savings account with a minimum deposit of INR 250 per year. The Sukanya Samriddhi account remains operative for 21 years from the date of its opening or until the girl child gets married after the age of 18 years. Sukanya Samriddhi Yojana interest rate is revised on a quarterly basis and the current interest rate is 7.6%*.
NRI Deposits are one of the most sought after investment opportunities by NRIs with a no risk appetite. Deposits promise good returns with no risk. The deposits that NRIs can opt for in India can be subdivided into Fixed Deposits and Recurring Deposits. NRIs can hold only three types of bank accounts in India: NRE, NRO & FCNR. All of these accounts provide Fixed Deposit facility whereas you can opt for a Recurring Deposit in NRE and NRO Bank Accounts. In this article, we will explore the NRE Recurring Deposit in detail.
PINS or Portfolio Investment (NRI) Scheme is another name for the Portfolio Investment Scheme (PIS) Account. This particular PINS Account for NRI enables them to buy and sell shares and convertible debentures of an Indian firm in a recognized stock exchange. The PINS Account is used to route all the transactions of NRIs in listed securities via a designated bank branch that is responsible for maintaining and reporting NRI Investments to the RBI.
FATCA or Foreign Account Tax Compliance Act aims to bring transparency and curb tax evasion by monitoring the income of NRIs living in the USA from their non-US investments and assets. It is a tax law by the US Tax Department (IRS) as a part of the Hiring Incentive to Restore Employment (HIRE) Act (2010). The FATCA Act identifies and prevents a US citizen/tax resident from avoiding tax. The Act requires certain international financial institutions to report details of financial accounts held by US taxpayers to the Internal Revenue Service (IRS) along with instances of tax evasion. A financial institution is empowered to withhold tax if an individual does not comply with any document requirements.
The 529 Plan is a tax-advantaged savings plan for education in the United States. The 529 Plans are also referred to as qualified tuition programs or Section 529 Plans. It has grown through the years covering K-12 education in 2017 and apprenticeship programs in 2019. There are two major types of the 529 plan: Savings Plan and Prepaid Tuition Plan.
The year 2020 has been and will be one of the most memorable years in future. This year everything witnessed change. At SBNRI, we experienced that there has been a constant search and want by the NRIs to invest in some specific asset classes that have been constant throughout the year. In this article we will explore the best investment options in India in 2020 one by one and help you with the detailed processes that can be carried out at the comfort of your homes abroad.
Getting good returns on the foreign currency earned abroad is one of the aspects that FCNR Deposit for NRIs can help with. The FCNR Deposits are underrated when it comes to investing foreign currency by an NRI. Amidst the plethora of options available for NRI Investment in India, the benefits of FCNR Deposit goes unnoticed. In this article, we will explore the benefits of the FCNR Deposit for NRIs and understand how it is better than most of the investment options out there comparing it with the likes of NRE FD.