Mutual Funds for NRIs from UK to Invest in India

NRIs are spread across the world from the Middle East to the UK and the USA. There are about 3.25 lakh NRIs living in the United Kingdom. Once they begin earning a decent income, Indians living abroad explore investment options for NRIs in India. Mutual funds are a great option to earn higher income as compared to traditional investment options. There are some important guidelines and rules that need to be followed to invest in mutual funds in India for NRIs. UK-based NRIs are also required to adhere to rules set by the Foreign Exchange Management Act (FEMA) to invest in NRI mutual funds. 

Mutual Funds for NRIs from UK to Invest in India
Mutual fund options for NRIs from UK

Also Read: NRI Mutual Fund: The Basic 2021 Guide

Best mutual funds for NRIs from UK

Here are some of the mutual fund investment options for NRIs based in the UK:

  • ICICI Prudential Mutual Funds
  • Aditya Birla Sun Life Mutual Funds
  • Tata Mutual Funds 
  • Nippon Indian Mutual Funds
  • UTI Mutual Funds
  • PGIM Mutual Funds
  • SBI Mutual Funds
  • Franklin India Mutual Funds

Each of the fund houses sets different NRI mutual fund investment conditions to accept investment from NRIs. While some of the mutual fund houses accept investment only in paper application forms, a few of them accept online applications through NSE NMFII or BSE STARMF platforms.  

Also Read: Mutual Funds for NRIs from USA/Canada to Invest in India

Best performing mutual funds for NRIs from UK

The following table shows the list of best performing mutual funds for UK-based NRIs, based on years’ returns:

Funds3 Mo6 Mo1Yr3 Yr5 Yr2020
ICICI Prudential Technology Fund7.431.5130.62922.270.6
Nippon India Pharma Fund13.626.362.128.116.566.4
Aditya Birla Sun Life Digital India Fund 7.830.411126.922.459
Tata India Pharma and Healthcare Fund9.320.152.625.411.564.4
UTI Healthcare Fund12.422.160.525.312.267.4
PGIM India Global Agribusiness Offshore Fund-17.5-0.33825.118.972.4
Tata Digital India Fund831.8107.124.721.154.8
SBI Healthcare Opportunities Fund10.424.161.124.79.765.8
SBI Technology Opportunities Fund 7.22782.723.719.447.3
Franklin India Technology Fund-2.814.976.222.618.756.8
Best performing mutual funds for UK-based NRIs

Note: Returns up to 1 year are on an absolute basis & more than 1 year are on CAGR basis as on 18 May 2021.

Mutual fund investment rules for NRIs

Mutual funds, exchange-traded funds (ETFs), stocks, etc. are some of the investment options for NRIs in India. To invest in any of the financial instruments, NRIs need to follow investment regulations set under the Foreign Exchange Management Act 1999 (FEMA). Whereby investment into the capital market in India is allowed only in compliance with the conditions like the opening of rupee-denominated NRI account, KYC documentation, etc. as described below:

  • KYC for NRIs: NRIs need to complete the KYC process to invest in mutual funds in India, by submitting required documents. Some AMCs require in-person verification.
  • FIRC (Remittance Certificate): If you invest in funds via a cheque or demand draft, you must attach a foreign inward remittance certificate (FIRC). Alternatively, a letter from the bank would be considered, which confirms the source of funds. 
  • Redemption: The fund house will credit returns (investment + gains) you get when you redeem your fund units to your account after debiting applicable taxes (if any). You can also get the payment via cheque. Some banks allow the redemption of proceeds to be directly credited to the NRO/NRE account. If you have opted for non-repatriable investment, the amount will be credited only to an NRO account. 

KYC procedure for NRIs to invest in India

UK NRIs need to complete certain formalities to successfully complete their KYC procedure: 

  • KYC form: KYC form needs to be submitted along with the necessary details filled to the SEBI registered intermediate. 
  • Documents: Here are the documents needed for KYC procedure:
    • Overseas address proof
    • Indian address proof
    • A photocopy of passport
    • A recent photograph

If the NRI is in the Merchant Navy, he must submit a mariner’s declaration or certified copy of the Continuous Discharge Certificate. 

  • Attestation: These documents need to be attested by any of the following entities – the authorized officials of overseas branches of scheduled commercial banks registered in India, court magistrate/ judge, public notary, or the Indian Embassy/ Consulate General in the country of your residence.
  • IPV (In-Person verification): IPV is mandatory for investment in mutual funds for Non-Resident Indians. The in-person verification can be done through video conferencing with the official representatives of the mutual fund house.

Also Read: How NRI invest in India: Mutual Funds and Real Estate

Mutual funds for NRIs in UK: Investment procedure

  • Direct/ self-investment: NRIs can directly make investments in funds in India through their NRI (NRE/NRO) account. KYC forms are available on the websites of mutual fund houses. Alternatively, NRIs can visit the Indian Embassy in the UK to complete in-person verification.
  • Power of Attorney (POA): You can also appoint a Power of Attorney to invest in mutual funds on your behalf in India. Ensure that your POA is KYC compliant. Signatures of both applicants should be on the KYC documents that you submit to the respective AMC. 
NRI Mutual Fund: Expert Assistance

 Before investing in Indian market, NRIs must consult market experts to make informed decisions. You can get detailed mutual fund advisory from experts at SBNRI. You can download SBNRI App from the Google Play Store or App Store to ask any questions related to mutual fund investment, NRI account opening online and tax filing in India. To ask any questions related to Mutual Funds, click on the button below. Also visit our blog and YouTube channel for more details. 

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FAQs

Can NRI invest in Mutual Funds in India?

The common doubt in the minds of NRIs is whether they can invest in mutual funds in India? The answer is yes, NRIs are allowed to invest in mutual funds in India. They need to meet certain requirements as per the guidelines of FEMA for being an NRI for investing in NRI mutual funds. 

Which is the best mutual fund for NRIs?

The best mutual funds depend on your investment goals and risk tolerance. Here are some of the best mutual fund options for NRIs:
– ICICI Prudential Mutual Fund
– SBI Mutual Fund
– Sundaram Mutual Fund
– UTI Mutual Fund
– Aditya Birla Sun Life Mutual Funds
– Tata Mutual Funds 

Can I invest in mutual funds in India from my overseas bank account?

To invest in mutual funds in India, NRIs need to open any of the following NRI accounts with an Indian bank:
– NRE account
– NRO account
– FCNR account

Which fund houses accept UK NRI investment in India?

Here are some of the mutual fund investment options for NRIs based in the UK:
– ICICI Prudential Mutual Funds for NRIs
– Aditya Birla Sun Life Mutual Funds for NRIs
– Tata Mutual Funds for NRIs
– Nippon Indian Mutual Funds for NRIs
– UTI Mutual Funds for NRIs
– PGIM Mutual Funds for NRIs
– SBI Mutual Funds for NRIs
– Franklin India Mutual Funds

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