Top 5 NRI Mutual Funds for Retirement Planning 2024

Retirement planning is a crucial aspect of financial management, and mutual funds often play a pivotal role in securing a comfortable post-work life. For investors, including residents, Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs), building wealth for the long run is important to realize future goals and safeguard yourself against inflation. In this blog, we’ll explore the top 5 NRI mutual funds for retirement in 2024, AUM, 1-yr return and 3-yr return, expense ratio, benefits, and factors to consider while investing in retirement mutual funds for NRIs.

What are Mutual Funds? 

Mutual funds are an investment option that pools funds from many investors and invests in various securities, investment instruments, and more to generate higher returns. It is one of the prime investment choices for NRIs looking to invest in the Indian market as mutual fund allows them to invest, generate returns, and build a sizeable corpus for their financial goal. Mutual fund investment can be made either in a lump sum or a Systematic Investment Plan (SIP).

Also read: Best SIP to Invest in 2024 – Top 10 SIP Mutual Fund Plans for NRIs/OCIs

What are Retirement Mutual Funds? 

A retirement mutual fund represents an open-ended investment solution specifically designed for retirement savings. These funds predominantly allocate investments towards low-risk options like government securities, ensuring a stable income stream. However, they also diversify by investing in equity and debt securities to foster overall growth. Typically, retirement mutual funds come with a lock-in period, which extends for either 5 years or until the investor’s retirement, whichever occurs earlier.

The primary objective of a retirement fund is to secure a reliable income post-retirement. Additionally, these mutual funds serve as a means to build a retirement corpus that factors in the impact of increasing inflation. As with other mutual fund schemes, investors can participate in these funds through lump-sum investments or opt for Systematic Investment Plans (SIP). 

Also read: 10 Mutual Funds That Doubled Wealth In 5 Years

Moving Back to India- Report

Top 5 NRI Mutual Funds for Retirement Planning 2024

Here is the list of the top 5 NRI mutual funds for retirement planning 2024 based on the returns over the period:

*Data as on 27 Nov 23

Benefits of Investing in Retirement Mutual Funds for NRIs

  • Steady Income Stream: One of the primary benefits of investing in retirement mutual funds is the assurance of a steady income stream during retirement. These funds are designed to focus on low-risk investments like government securities, which provide a stable source of income. This feature is particularly crucial for retirees who depend on a consistent flow of funds to meet their living expenses without significant market volatility.
  • Diversification for Growth: Retirement mutual funds not only prioritize low-risk investments but also include a mix of equity and debt securities. This diversification strategy aims to balance the need for capital growth with stability. While low-risk investments provide a foundation for consistent income, exposure to equities and debt instruments allows the fund to participate in market growth, potentially enhancing the overall returns over the long term.
  • Inflation Hedge: These funds take into account the impact of inflation on the purchasing power of money over time. By strategically investing in a diversified portfolio, retirement mutual funds aim to combat the eroding effects of inflation. This proactive approach helps investors maintain the real value of their savings, ensuring that the accumulated corpus is better equipped to withstand the rising cost of living during retirement.
  • Disciplined Savings through SIP: Investing in retirement mutual funds often involves the option of Systematic Investment Plans (SIP). SIP allows investors to contribute smaller amounts at regular intervals, promoting a disciplined savings approach. This not only makes investing more accessible for individuals with varying income levels but also encourages a consistent commitment to building a retirement corpus. The systematic nature of SIP helps mitigate the impact of market volatility by spreading investments across different market conditions.

Also read: How to Make 1 Crore in 10 Years by SIP?

Who Should Invest in Retirement Mutual Funds? 

Retirement funds are well-suited for individuals who are looking to build a financial cushion for their future and post-retirement years. Since these funds do not have an age restriction, NRI investors can start as early as they can from their early 20’s to build a sizeable corpus in the long run. With these mutual funds investing in low-risk instruments, retirement funds are particularly suitable for individuals with a moderate to low-risk tolerance. 

Also read: NRI Mutual Fund KYC in India: The Ultimate Guide 2024

Taxation on Retirement Mutual Funds

If equity investments are sold within one year of holding by NRIs, then the returns will be treated as short-term capital gain and will be taxed at 15% plus cess. However, if the funds are sold after one year of holding, it accounts as long long-term capital gain and the returns up to Rs 1 lakh will be tax-free. Any returns above Rs 1 lakh will be treated to a taxation of 10% plus cess without any indexation benefit. 

Similarly, the debt mutual fund tax has been changed with effect from April 1, 2023, after the Budget 2023 brought certain amendments. Debt mutual funds will no longer be allowed to avail of indexation benefits from FY 23-24. Any gains made on debt mutual funds investment will now attract taxation on applicable slab rates of the investor’s income bracket.

Factors to Consider Before Investing in NRI Retirement Mutual Funds
  • Risk Tolerance and Investment Horizon: Before investing in retirement funds, carefully assess your risk tolerance and investment horizon. Retirement funds often have a mix of assets, including equities and fixed-income securities. Understanding how comfortable you are with market fluctuations and determining how many years you have until retirement can help you choose a fund that aligns with your risk profile and time horizon.
  • Expense Ratios and Fees: Examine the expense ratios and fees associated with the retirement funds you are considering. These costs can impact your overall returns over time. Look for funds with lower expense ratios, as they tend to be more cost-effective in the long run. Be aware of any front-end or back-end loads, as these can affect the amount you initially invest or the proceeds when you redeem your shares.
  • Fund Performance and Track Record: Evaluate the historical performance and track record of the retirement funds under consideration. While past performance is not indicative of future results, a fund’s history can provide insights into its consistency and ability to weather different market conditions. Look for funds with a solid track record of delivering competitive returns relative to their benchmark.
  • Asset Allocation and Diversification: Understand the asset allocation strategy of the retirement fund. Different funds may have varying allocations to stocks, bonds, and other asset classes. Consider your own financial goals and risk tolerance to ensure that the fund’s asset mix aligns with your investment objectives. Diversification is key to managing risk, so look for funds that provide a well-balanced and diversified portfolio.
  • Flexibility and Liquidity: Assess the flexibility and liquidity of the retirement funds you are considering. Some funds may have restrictions or penalties for early withdrawals, while others may offer more flexibility. Consider your need for liquidity and whether the fund’s terms align with your financial goals. Understanding the rules regarding withdrawals, especially in emergencies or unexpected situations, is crucial for making informed investment decisions.

Also read: Top 5 Tips for NRIs to Pick a Winning Mutual Fund

Can NRI Invest in Retirement Mutual Funds in India? 

Yes, NRIs can invest in mutual funds in India. NRIs can easily invest in different mutual fund schemes and generate higher returns and wealth building. The FEMA Act, RBI rules, and SEBI guidelines govern the rules and regulations regarding NRI investments in mutual funds which is why it has a slightly different procedure than that of resident individuals. However, it is very easy to set up your Mutual Fund KYC and link it to your NRO/NRE bank account to invest in mutual fund schemes in India. 

There are various mutual fund schemes available for NRIs to invest in. Keeping in check with the FEMA Act, the funds on offer for NRIs from the US & Canada to NRIs from other countries may vary at times.

Wrapping Up

Selecting the right NRI mutual funds for retirement requires careful consideration of your risk tolerance, time horizon, and financial goals. These top 5 NRI mutual funds for retirement planning in 2024 offer a range of options, from low-cost index funds to actively managed funds, providing investors with the flexibility to choose based on their preferences and objectives. Connect with our wealth expert at SBNRI to understand more about retirement mutual fund investments for NRI in India and plan your perfect retirement mutual fund portfolio. 

Invest in NRI Mutual Funds with SBNRI 

NRIs can now download the SBNRI App and choose to invest in different NRI mutual fund schemes in India with ease. You can also get detailed mutual fund advice from experts at SBNRI. Also, visit our blog and YouTube channel for more details.

SBNRI is an authorized Mutual Fund Distributor platform & registered with the Association of Mutual Funds in India (AMFI). ARN No. 246671. NRIs willing to invest in mutual funds in India can download the SBNRI App to choose from 2,000+ mutual fund schemes or can connect with the SBNRI wealth team to better understand Mutual Fund investments.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions. SBNRI does not intend to predict future returns, please read all related documents before investing.


What is a retirement fund, and how does it differ from other investment options?

  • A retirement fund is a specialized investment vehicle designed to help individuals save for their post-retirement years. It typically differs from regular investment options by focusing on a mix of assets tailored for long-term growth and income stability.

Is there a specific age requirement for investing in retirement funds?

  • No, there is typically no specific age requirement for investing in retirement funds. These funds are designed to accommodate investors of various ages, including those in their early 20s who want to start planning for retirement early.

How do I determine the right retirement fund based on my risk tolerance?

  • Assessing your risk tolerance involves understanding how comfortable you are with market fluctuations. Generally, retirement funds disclose their risk profile, and investors can choose funds that align with their risk preferences, ranging from conservative to aggressive.

What fees are associated with retirement funds, and how do they impact returns?

  • Retirement funds may have expense ratios and fees. It’s crucial to understand these costs, as they can impact overall returns. Lower expense ratios are generally preferred.

Can I invest in a retirement fund through systematic investment plans (SIP)?

  • Yes, many retirement funds allow investors to contribute through systematic investment plans (SIP). This method involves making regular, smaller contributions, providing a disciplined approach to investing over time.

What are the investment options for NRIs in India?

  • There are a plethora of investment options for NRIs in India. The top 5 investment options for NRIs include Fixed Deposits, Mutual Funds, Stocks, Real Estate and GOI Securities.

How can NRI invest in Indian Mutual Funds?

  • An NRI can invest in Indian Mutual Funds using his/her NRE/NRO Account. The NRE Account is used to invest on a repatriable basis and NRO Account is used to invest on a non-repatriable basis.

Can I invest from the USA in India?

  • Yes an NRI can invest from the USA in India in various asset classes such as FDs, Mutual Funds, Stocks etc.

Can NRI invest in SIP in India?

  • Yes, an NRI can invest in India through the SIP route. SIP stands for Systematic Investment Plan.

How to make Rs 1 crore wealth from mutual funds in 10 years?

  • You can invest in a monthly SIP of Rs 43,100 for 10 years at an expected return of 12% to generate Rs 1 crore corpus at the end of 10 years. Based on the historical performance as aforementioned, the NIFTY 100 Index has provided 12.3% average annual return for the past 15 years.

How to make Rs 1 crore wealth from mutual funds in 15 years?

  • You can use the rule of 15x15x15 to make a wealth of Rs 1 crore from mutual funds in 15 years. With this rule of 15x15x15, you can invest Rs 15,000 a month for 15 years at an expected return of 15% and can generate Rs 1 crore (Rs 1.01 crore approx.) after 15 years.

Can I earn Rs 1 crore from mutual funds in 10 years?

  • Yes, you can earn Rs 1 crore from mutual funds in 10 years by investing in SIP on a monthly basis and become a crorepati from mutual funds.

Can NRIs become crorepati from mutual funds in 10 years?

  • Yes, NRIs can invest in various mutual fund schemes in India. If an NRI invests in a monthly SIP of Rs 43,100 over 10 years at an expected return of 12%, they will have a corpus of Rs 1 crore at the end of 10 years. Based on the historical performance as aforementioned, the NIFTY 100 Index has provided 12.3% average annual return for the past 15 years.

Can NRIs become crorepati from mutual funds in 15 years?

  • Yes, NRIs can become crorepati from mutual funds in 15 years by following the rule of 15x15x15 and investing Rs 15000 a month in SIP for 15 years with an expected rate of return of 15%, then they will become crorepati after 15 years with a wealth corpus of Rs 1 crore.
Copy link