Mutual funds are among the hottest investment choices right now, and for good reason. With India’s economy projected to grow at over 6.5%, and the mutual fund industry surpassing ₹75 trillion in AUM, NRIs are eager to participate in this growth story.
Non-Resident Indians (NRIs) often face the dilemma of where to park their money. On one hand, NRE deposits provide a sense of safety; however, the returns are usually very low. Direct investment in stocks may seem exciting, yet it often feels risky and time-consuming. In comparison, mutual funds strike the right balance by offering both diversification and professional management. They offer professional management, diversification across sectors, and the potential for higher long-term returns.
Therefore, if you are an NRI looking for both security and growth, mutual funds in India are a powerful option. In this guide, we’ll explore the best mutual funds to invest in 2025 across categories like Large-Cap, Flexi-Cap, Small-Cap, Multi-Asset, and SIPs. We’ll also explain why investing in mutual funds in 2025 offers such strong growth potential for NRIs.
Why NRIs Should Invest in Indian Mutual Funds
- Higher returns than deposits: While traditional NRE and NRO deposits usually offer 3–4% annual interest, well-managed mutual fund investment plans can deliver 12–18% CAGR over the long term.
- Diversification of risk: In addition, mutual funds spread investments across multiple companies, sectors, and asset classes, which helps reduce the overall impact of market ups and downs.
- Expert management: Moreover, every mutual fund is managed by qualified fund managers and analysts who use in-depth research and data models to make investment decisions, saving NRIs both time and effort.
- Digital convenience: With 100% online KYC and mobile-based platforms, NRIs can start SIPs or lump-sum investments from anywhere in the world in just a few minutes.
- Systematic growth through SIPs: For example, a SIP of ₹10,000 per month can grow to about ₹23 lakh in 10 years (at 12% CAGR).
- Safe and regulated: The industry is strictly monitored by SEBI, ensuring investor protection, transparency in returns, and regular disclosures.
- Repatriation options: Investments from NRE accounts are fully repatriable, while NRO account investments can be transferred abroad up to USD 1 million per financial year.
- Tax benefits: Equity mutual funds enjoy favorable tax treatment. Long-term capital gains (after 1 year) are taxed at 12.5% beyond ₹1 lakh, and short-term gains are taxed at 15%, lower than many global tax regimes.
- Emotional connection: By investing in Indian mutual funds, NRIs not only grow their wealth but also stay financially connected to India’s growth story.
Pro Tip: Always check whether your country of residence has a Double Taxation Avoidance Agreement (DTAA) with India. This can help you avoid paying tax twice on the same income.
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Best Mutual Fund Categories for NRIs in 2025
1. Large-Cap Funds
Large-cap funds invest in India’s top 100 companies. These companies are stable and less affected by market swings. As a result, large-cap funds are ideal for NRIs who want predictable growth with lower risk.
| Fund Name | 1-Year Return | 3-Year Return | Expense Ratio | AUM (₹ Cr) | Min SIP (₹) |
| ICICI Prudential Bluechip Fund | 10–11% | 14.90% | 1.44% | 63,297 | 100 |
| Nippon India Large Cap Fund | 12% | 17.50% | 1.56% | 35,667 | 100 |
Note: Best for NRIs who want steady, lower-risk growth.
2. Flexi-Cap and Multi-Cap Funds
Flexi-cap funds give managers the freedom to invest across large, mid, and small companies. Multi-cap funds, in contrast, must hold a minimum portion in all three categories. Because of this structure, these funds balance stability with high growth potential.
| Fund Name | 1-Year Return | 3-Year Return | Expense Ratio | AUM (₹ Cr) | Min SIP (₹) |
| Parag Parikh Flexi Cap Fund | 17.80% | 16.20% | 1.33% | 89,704 | 1,000 |
| Quant Flexi Cap Fund | 30.5% (5Y CAGR) | 19.6% (3Y CAGR) | 0.61% | 7,185 | 500 |
| JM Flexicap Fund | 23.4% (5Y) | 24.7% (3Y) | 0.55% | 5,338 | 500 |
These funds suit NRIs who are comfortable with some risk and who want to capture India’s growth story.
Pro Tip: Flexi-cap funds are especially useful during market volatility since fund managers can shift between large, mid, and small caps based on opportunities.
3. Small-Cap Funds
Small-cap funds focus on emerging businesses with strong growth potential. While they come with higher volatility compared to large-cap funds, they also offer the possibility of superior long-term wealth creation.
| Fund Name | 3-Year Return | 5-Year Return | Expense Ratio | AUM (₹ Cr) | Min SIP (₹) |
| Nippon India Small Cap Fund | 29.50% | 24.80% | 1.43% | 49,273 | 100 |
| SBI Small Cap Fund | 27.20% | 23.50% | 0.94% | 27,882 | 500 |
Best for: NRIs with long-term horizon & high risk appetite.
4. Multi-Asset Funds
Multi-asset funds spread investments across equity, debt, and gold. This makes them safer than pure equity funds, while still providing solid returns. Therefore, they are perfect for NRIs who want balance between growth and stability.
| Fund Name | 1-Year Return | 3-Year Return | Expense Ratio | AUM (₹ Cr) | Min SIP (₹) |
| ICICI Prudential Multi-Asset Fund | 15.40% | 17.90% | 1.44% | 52,761 | 100 |
| UTI Multi Asset Allocation Fund | 15.50% | 17.10% | 1.78% | 5,018 | 500 |
Best for: NRIs who want a balanced portfolio with moderate risk and steady returns.
5. SIPs for Long-Term Wealth
SIPs are the simplest way for NRIs to invest regularly, benefiting from rupee cost averaging and compounding.
| Fund Name | Category | 3-Year Return | 5-Year Return | Min SIP (₹) |
| HSBC Value Fund Direct-Growth | Value | 23.90% | 26.80% | 500 |
| UTI Large & Mid Cap Fund | Large/Mid | 19.80% | 24.40% | 500 |
| Parag Parikh Flexi Cap Fund | Flexi-Cap | 18.50% | 24.20% | 1,000 |
How Much Can NRIs Earn? (Example with ₹10,000 SIP)
If an NRI invests ₹10,000 every month through SIP, the wealth built over time can look like this (assuming different average CAGR for each fund type:
| Fund Category | Assumed CAGR | 10-Year Value | 15-Year Value |
| Large-Cap | 12% | ₹23.2 lakh | ₹45.6 lakh |
| Flexi-Cap | 13% | ₹25.0 lakh | ₹52.5 lakh |
| Small-Cap | 15% | ₹27.8 lakh | ₹63.0 lakh |
| Multi-Asset | 11% | ₹21.8 lakh | ₹42.0 lakh |
Step-by-Step Guide for NRIs to Invest in Mutual Funds
Step 1: Open a Bank Account
Start by opening an NRE or NRO account. Choose an NRE account if you want to invest money earned abroad, since both investment and returns are fully repatriable. An NRO account is better if you want to invest income earned in India, such as rent or dividends.
With SBNRI, you can apply for an NRE/NRO account in just 20 seconds through a fully digital process.
Step 2: Complete KYC and FATCA Formalities
Every investor must complete KYC. For NRIs, this requires a PAN card, passport, photographs, and proof of overseas address. The entire process can be completed digitally through video verification. Additionally, NRIs residing in the USA or Canada must comply with FATCA regulations.
Step 3: Choose the Right Funds
Think about your goals before investing. Large-cap funds are good if you want safety and stability. Flexi-cap and multi-cap funds are useful if you want higher returns. Multi-asset funds are right if you want both protection and growth.
Step 4: Decide SIP or Lump-Sum
If you want to build wealth gradually, choose SIPs. If you already have a large amount to invest, go for a lump-sum. Many NRIs combine both strategies to balance growth and stability.
Step 5: Invest Online
Most banks and fund houses allow NRIs to invest online. You can use mobile apps or web platforms to start your SIP or lump-sum investment. This makes the process quick and convenient.
With the SBNRI App, you can invest in 1200+ mutual funds in just 3 easy steps.
Step 6: Review Your Portfolio Regularly
Check your portfolio every quarter. If a fund is underperforming for a long time, you may switch to a stronger option. Rebalancing once a year keeps your portfolio aligned with your goals.
Step 7: Know Tax and Repatriation Rules
Equity mutual fund gains are taxed at 15% (short-term) and 12.5% (long-term after ₹1 lakh). Debt funds are taxed as per your income slab. NRE accounts allow full repatriation, while NRO accounts allow up to USD 1 million per year.
Final Thoughts
For NRIs, mutual funds in India provide the ideal combination of growth, safety, and convenience. To begin with, large-cap funds add stability, while flexi-cap funds capture opportunities across sectors. In addition, small-cap funds drive long-term wealth creation, and multi-asset funds help balance risk with steady returns.
Moreover, SIPs make it easy to build wealth gradually, even with small monthly contributions. As a result, NRIs can enjoy both consistent growth and financial security while staying connected to India’s economic progress.
As we move into 2025, India’s economy continues to expand at a strong pace, making this an excellent time to explore the best mutual funds to invest in 2025. With user-friendly digital platforms like SBNRI, NRIs can seamlessly open NRE or NRO accounts, complete KYC and FATCA formalities online, and gain access to 1,200+ top-performing mutual funds from anywhere in the world.
Frequently Asked Questions
Q1. Which is the best mutual fund to invest in 2025?
ICICI Prudential Bluechip (large-cap) and Parag Parikh Flexi Cap (flexi-cap) are among the best mutual funds 2025.
Q2. Which mutual fund is best for the next 5 years?
Mid-cap and flexi-cap funds like Kotak Emerging Equity and Quant Flexi Cap Fund.
Q3. Which mutual funds are good for 10 years or more?
Small-cap and mid-cap funds are the best mutual funds for the next 10 years, offering maximum compounding benefit.
Q4. Which are the best mutual funds small caps in 2025?
Nippon India Small Cap and SBI Small Cap remain top picks.
Q5. Which mutual fund will have a 5-star rating in 2025?
Parag Parikh Flexi Cap and Nippon India Small Cap Fund are highly rated.
Q6. Can NRIs invest in mutual funds in India?
Yes, through NRE/NRO accounts. Investments from NRE are fully repatriable.
Q7. Do NRIs need a Demat account for mutual funds?
No, a Demat account is not mandatory. You can invest via apps like SBNRI.
Q8. What is the minimum SIP amount for NRIs?
Most mutual funds allow NRIs to start SIPs with as little as ₹500–₹1,000 per month, making it easy to begin small and scale up later.
Q9. Are mutual fund returns guaranteed for NRIs?
No, mutual fund returns are market-linked. While they have historically delivered 10–15% CAGR over the long term, returns are not fixed like bank deposits.
Q10. How are NRI mutual fund investments taxed in India?
- Equity funds: 12.5% long-term capital gains tax (after 1 year, above ₹1 lakh), 15% short-term gains tax.
- Debt funds: Taxed as per the NRI’s income tax slab in India.
- Double Taxation Avoidance Agreements (DTAA) can help reduce overall tax liability.
Q11. Can NRIs repatriate mutual fund earnings abroad?
Yes. Investments made through NRE accounts are fully repatriable. For NRO accounts, NRIs can repatriate up to USD 1 million per financial year after paying applicable taxes.
Q12. Which type of mutual fund is safest for NRIs in 2025?
Large-cap funds and multi-asset funds are considered relatively safer because they invest in stable companies and diversify across asset classes.
Q13. Which mutual funds give monthly income to NRIs?
Some mutual funds offer Systematic Withdrawal Plans (SWPs), which allow NRIs to withdraw a fixed amount monthly. Hybrid and debt-oriented funds are commonly used for this purpose.
Q14. Can US-based NRIs invest in Indian mutual funds?
Yes, but with some restrictions. Due to FATCA compliance, only select AMCs (like ICICI Prudential, SBI, and UTI) accept investments from US and Canada-based NRIs.
Q15. What happens to my mutual fund investments if I return to India?
Your NRE/NRO accounts will need to be converted into resident accounts, and your mutual fund folios updated. The investments themselves can continue without disruption.
Q16: Can NRIs invest in Indian mutual funds?
Yes, NRIs can invest in mutual funds in India, either through NRE or NRO accounts. Both equity and debt mutual funds are available for NRI investors.
Q17: Which documents are required for NRIs to invest?
NRIs need a PAN card, passport, photographs, proof of overseas address, and KYC completion. Additionally, FATCA compliance is required for residents of the USA or Canada.
