Similar to resident Indians, all Non-Resident Indians (NRIs), including US-based NRIs, can also open an NRI trading account and start investing in the Indian market. However, investing in stocks and mutual funds in India is not straightforward for NRIs based in the USA because of FATCA regulations. Here is about the USA NRI trading account in India, NRI Demat account, and NRI investment options in India, as well as FATCA and US SEC.
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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Portfolio Investment Scheme (PIS) is a scheme of the Reserve Bank of India defined in Schedule 3 of the Foreign Exchange Management Act 2000. PIS permits NRIs to invest in stocks and mutual funds through exchange houses in India. As per the scheme, NRIs can purchase and sell shares of Indian companies on stock exchanges. You can get a PIS permission letter with the help of the bank in which you have your NRE/ NRO account. You can apply for the PIS permission letter at a bank authorized by the RBI to administer the PIS.
Considering the boom in the Indian market, many NRIs are heavily investing in India to grow their wealth. There are a host of NRI investment options in India. They can invest in stock markets, mutual funds, FDs, gold and a lot more. While some NRIs are getting the full advantage of their investment in India, due to lack of experience and expert advice, others commit mistakes that complicate things later on. Here are 5 common mistakes NRIs make when investing in India.
Generally, Indians go abroad for education and employment but ultimately settle in India. NRIs who wish to return to India in the later stage of their lives should build a corpus of funds for their retirement. To enjoy a healthy and prosperous life after retirement, they must invest in one of the best retirement plans for NRIs in India.
With the Indian market growing rapidly, NRIs are keen on putting their money in the Indian market. There are several NRI investment options in India, such as mutual funds, equity stocks, IPOs, ETF, bonds, etc. However, investment instruments like equity, bonds, mutual funds and more have their restrictions. For example, some mutual fund companies don’t accept applications from NRIs in the USA and Canada. Here we will discuss common problems faced by NRIs when investing in India.
Overseas Corporate Bodies Meaning: Overseas Corporate Body (OCB) means a company, partnership firm, overseas trust, society and other corporate body directly or indirectly owned by NRIs (Non-Resident Indians) with not less than 60% beneficial ownership. OCB existed till 16 September 2003 and was eligible to undertake transactions to the general permission granted under Foreign Exchange Management Regulations. To know the Overseas Corporate Body (OCB) meaning and laws related to it continue reading.
An NRI Demat account is a Demat account for NRIs/ PIO &OCI Cardholders to keep securities such as Stocks, Mutual Funds, Bonds, etc. in electronic format. As per RBI guidelines, NRIs have to open two separate Demat accounts - repatriable and non-repatriable account - for repatriable and non-repatriable investments. An NRI repatriable Demat account is an ordinary Demat account with a sub-status as ‘NRI Repatriable’. A repatriable account is mandatory for NRIs to invest their foreign earnings in the Indian stock market.
Axis Bank offers trading and investment services to NRI customers through its subsidiary AxisDirect. AxisDirect is a portal of Axis Securities Limited that offers seamless investment/ trading services to NRI customers. Axis Bank 3-in-1 account is a combination of NRI PIS/ Non-PIS savings account, Demat account and trading account. With Axis Direct 3 in 1 account, NRIs get an integrated account for investment and trading in the Indian market.
NRI PIS and Non-PIS bank accounts allow NRIs and PIOs to invest in securities in India such as mutual funds, equity stocks, IPOs, ETF, bonds, etc. NRIs can open a PIS or Non-PIS account with any of the brokers in India like ICICIdirect, IIFL Securities, HDFC Securities, Zerodha, Angel Broking, etc. The investment purposes of NRI PIS and Non-PIS accounts are different. You must know the difference between NRI PIS and Non-PIS Bank account and open an account that suits your investment purpose.
IIFL Securities is a full-service brokerage firm based in India and has a global presence with offices in India, Canada, Hong Kong, Mauritius, Singapore, Switzerland, United States, UK, and UAE. It offers 2-in-1 accounts i.e. IIFL Securities NRI trading account and Demat account, for NRIs. IIFL 2-in-1 NRI account allows online trading across stocks, equity derivatives and investments in mutual funds, IPOs and bonds.