Best Investment Tips for Non-Residents of India in 2022

A non-resident of India (NRI) can opt in for many investment plans in India, which can be a source of capital income. Besides, they can be their investment for a lifetime to have prosperous life after retirement from a job abroad.

Let’s get through the best investment offers you can have as an NRI.

Best Investment Tips for Non-Residents of India, 2022

These are a few alternatives to investing and multiplying your capital income.

1. Mutual Funds

Mutual funds have been an all-time favourite investment tip for NRIs. They can easily park their money in this foreign investment option and withdraw minimal to exceptional returns over time using their expertise & wisdom.

The need is to understand the type, nature, and if they are open to buying out abroad. Think and research about it prior, as it’s a must. Secondly, get through the rules and guidelines for the house parties.

Here again, Foreign Exchange Management Act (FEMA), 1999 is applied to the Non-Resident Indian mutual fund investments. This Act allows NRI to invest in these capital markets in India:

• Direct stocks
• Mutual funds
• Exchange-traded funds

Be aware of the fact that this alternative is prone to market risks, but you are on a safer side if you compare it with the risks involved in fixed deposits or a national pension scheme (NPS). To get off a loss, it must thoroughly go through the risk profile of financial products and their objectives prior.

Mutual Fund Investment options for NRIs

• Can invest via Non-Resident External Account (NRE)
• Can invest through Non-Resident Ordinary Account (NRO)
• Can invest in Indian National Currency only, but not in foreign currency

2. ULIP Plans

ULIP stands for Unit Linked Insurance Plans, which is the right of every NRI to invest in like other natives as per the Foreign Exchange Management Act (FEMA). Investing in it is a reliable alternative because it comes up with double benefits, which are investment together with insurance. You can have an opportunity to create wealth by investing in a long-term plan.

Besides, you can leverage relaxations in tax or access other benefits associated with it.

Sections 80C and 10 (10D) of the Income Tax Act, 1961 define how its premium should be deducted. So, if you have a plan to have wealth, Unit Linked Insurance Plan (ULIP) can be trusted and payout through the following channels:

• Any Indian bank account
• Any NRE or NRO bank account

3. National Pension Scheme

NPS or National Pension Scheme is a trustworthy source to save money for future use. Being supported by the government, this scheme ensures NRIs invest in active options, which cover equity-to-debts, corporate bonds, & government securities options. For this investment, you may allocate 75% to the last limit in Equity.

There is another “Auto Choice”, which is for a particular age group of NRIs. This is allocated by default or automatically. The investor cannot decide on his/her own.

This scheme is ideal for non-residents who are in between 18 years and 60 years of age. What they require are a few proofs, which are Aadhar Card and PAN Card.

Accounts to have for opening it:

• Non-Resident External Account (NRE)
• Non-Resident Ordinary Account (NRO)

4. Real Estate

Real estate offers investment alternatives in fixed assets, which certainly grow over time. Non-residents can easily buy a piece of land here, except the agricultural land or farmhouse. This option can offer rental income in a long term. You may have a good return with the steady growth in your rental income over time.

Here are the bank accounts that Indian migrants can use to buy or sell their properties in India:

• Non-Resident External Account (NRE)
• Non-Resident Ordinary Account (NRO)
• Foreign Currency Non-Resident Account (FCNR)

5. Public Provident Fund

A Public Provident Fund (PPF) account investment is a secure investment plan, which is supported by the government. There is no particular time period to invest in it. This PF account encloses several benefits under its scheme.

But, its maturity period for non-residents is 15 years. Afterward, they cannot go ahead with their Public Provident Fund Account under any circumstances.

6. Fixed Deposits

Like every citizen, fixed deposits or FDs are available as an NRI investment plan. They may directly park their hard-earned money in this safest investment plan. Being a risk-free option, non-residents prefer it the most. This tip of investment can help with many benefits.

Investing in Fixed Deposit Scheme Requires

• NRE Account (Non-Resident External Account)
• NRO Account (Non-Resident Ordinary Account)
• FCNR Account (Foreign Currency Non-Resident Account)

7. Equity Investments

This is an excellent investment plan for aggressively active investors. The non-residents can buy stocks in the market corresponding to the portfolio investment scheme of the apex bank-Reserve Bank of India (RBI).

Provided that they have the following bank accounts, they can invest:

• Non-Resident External Account
• Non-Resident Ordinary Account
• Demat Account
• Trading Account in India

8. Child Plans

This plan enables them to secure the future of the NRI child. They can buy a CHILD INSURANCE PLAN, which promises to deliver great returns and maximum savings. With this investment, a substantial corpus can be there for supporting your child’s future requirements in the home country. Many private insurance companies and the Life Insurance Corporation of India offer these plans.

Benefits of this Plan:

• Offer financial support to your children for a comfortable and secure life
• Can have dual benefits of insurance and investments.
• Can have maturity benefit as a lump sum amount would be delivered.
• Allows partial withdrawals to meet urgent requirements of funds