SIP Investment Plans in India for NRI

A Systematic Investment Plan (SIP) investment for Non-Resident Indians (NRIs) based in Singapore is designed to help you grow your wealth steadily and efficiently through disciplined and periodic investments in Unit Linked Insurance Plans (ULIP) or any other funds. The SIP investments in India allow you to invest small amounts and enjoy the power of compounding along with its flexible and long-term approach.

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Systematic Investment Plan (SIP)
CATEGORY SIP By Insurance Companies SIP By Fund Houses
RETURNS (Past 10 Years) 13.66%+ 14.48%+
LIFE COVER
TAX SAVING
Under 80C
On all plans
Only on ELSS
TAX
FREE MATURITY
BENEFIT
Under 10(10D)*

  • Insurance Companies
  • Mutual Funds
Returns
Fund Name 3 Years 5 Years 10 Years
Top 200 Fund Tata AIA 23.15% 27.3%
19.47%
View Plan
Virtue II PNB Metlife 21.78% 23.76%
17.76%
View Plan
Pure Equity Birla Sun Life 18.83% 19.17%
16.34%
View Plan
Growth Opportunities Plus Fund Bharti AXA 17.85% 18.97%
15.65%
View Plan
Pure Stock Fund Bajaj Allianz 17.49% 18.39%
15.52%
View Plan
Blue Chip Fund HDFC Standard 14.09% 14.83%
12.85%
View Plan
Growth Super Fund Max Life 14.38% 15.26%
12.72%
View Plan
Multi Cap Growth Fund ICICI Prudential 15.63% 13.98%
12.51%
View Plan
Equity Fund SBI 14.73% 14.91%
12.42%
View Plan
Growth Plus Fund Canara HSBC Oriental Bank 12.78% 12.27%
10.7%
View Plan

Updated as on January 2024

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Returns
Fund Name 5 Years 10 Years RSI
Active Fund QUANT 27.62% 23.96%
21.08%
Large and Mid Cap Fund QUANT 23.27% 22.69%
19.64%
Flexi Cap Fund PARAG PARIKH 23.90% 20.22%
20.15%
Large and Mid Cap Fund EDELWEISS 20.32% 18.01%
16.76%
Equity Opportunities Fund KOTAK 20.22% 18.98%
17.44%
Large and Midcap Fund MIRAE ASSET 21.11% 24.56%
23.01%
Flexi Cap Fund PGIM INDIA 21.48% -
15.13%
Flexi Cap Fund DSP 19.48% 17.73%
15.82%
Emerging Equities Fund CANARA ROBECO 18.91% 22.92%
20.84%
Focused fund SUNDARAM 18.22% 16.55%
15.16%

Updated as on January 2024

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Best SIP Investment in India for NRI in 2024

Choosing the best SIP investment in India for an NRI in 2024 depends on several factors, including your risk appetite, investment goals, and time horizon. However, following are some of the best SIPs in India available for an NRI: 

  1. Insurance Companies

    Fund Name Returns
    3 Years 5 Years 10 Years
    Top 200 Fund TATA AIA  28.32% 24.81% 20.25%
    Virtue II PNB METLIFE  23.25% 19.25% 17.26%
    Pure Equity BIRLA SUN LIFE  20.23% 15.93% 16.8%
    Growth Opportunities Plus Fund BHARTI AXA  19.08% 16.31% 16.73%
    Growth Fund LIC  10.74% - 16.17%
    Pure Stock Fund BAJAJ ALLIANZ  17.73% 14.52% 16.16%
    Blue Chip Fund HDFC STANDARD  14.99% 13.28% 14.12%
    Growth Super Fund MAX LIFE  15.25% 13.34% 13.31%
    Multi Cap Growth Fund ICICI PRUDENTIAL  16.69% 11.58% 13.13%
    Equity Fund SBI  14.78% 12.92% 12.97%

    *Updated as on January 2024

  2. Mutual Funds

    Fund Name 3 Year Returns 5 Year Returns 10 Year Returns
    Large Cap Fund NIPPON INDIA  24.99% 15.06% 16.79%
    Bluechip Fund SBI  17.71% 14.27% 15.41%
    Large Cap Fund EDELWEISS 16.83% 14.35% 14.28%
    Frontline Equity Fund ADITYA BIRLA SUN LIFE  17.52% 13.21% 14.34%
    Bluechip Fund ICICI PRUDENTIAL  20.34% 14.76% 14.88%
    Large Cap Fund MIRAE ASSET  14.85% 12.99% 16.34%
    Bluechip Equity Fund CANARA ROBECO  15.01% 15.14% 14.38%
    Bluechip Growth KOTAK  16.41% 14.67% 14.49%
    Large Cap Fund BARODA BNP PARIBAS  15.89% 15.08% 14.61%

Investment Return Calculator (Power of Compounding)
  • One Time
  • Monthly
  • Yearly

Invest For (in Years)

1 30

Stay invested for (in Years)

1 30

Expected rate of return (in %)

1 35
 
YOU INVEST
YOU GET
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Updated as on January 2024

What is a SIP in India?

A SIP is also known as a Systematic Investment Plan in India. It is a method of investing in the best investment options like Unit Linked Insurance Plans (ULIPs) and mutual funds. SIPs in India allow you to contribute a fixed amount at regular intervals, say monthly, quarterly, or half-yearly. 

These plans offer a disciplined approach to investing, allowing NRIs (Non-Resident Indians) to systematically grow their wealth over time by leveraging the power of compounding. 

SIPs provide flexibility and convenience, making it an accessible investment option for NRIs looking to participate in India's financial markets.

Key Features of SIP Investments in India for NRI

The key features of an investment in a Systematic Investment Plan (SIP) in India are listed in the table below:

Feature Benefit
Long-Term Wealth Building These plans offer compound growth over time, which is ideal for retirement or education goals.
Rupee Cost Averaging You can buy more units when markets are low. This helps in averaging out your cost of investment.
Small Investments These plans allow you to start investing in the best SIP plans with a minimal amount of Rs. 100 per month.
Top Up Facility
  • Benefit from Top-Up payments in SIP plans for additional investments.
  • Higher maturity returns in ULIP funds and mutual fund SIP plans.
Flexibility You can start, stop, or modify the SIP amount as needed.
Convenience These plans allow you to make automatic investments, hassle-free.
Diversification You can invest in multiple assets through ULIP plans and mutual funds.
Professional Management Expert Fund Managers handle your fund selection and portfolio management.
No Minimum Investment These plans allow you to start with a small amount and gradually increase your contributions.
NRE/NRO Account Compatible You can invest in rupees through designated NRE/ NRO accounts for NRI.
Potential Tax Benefits
  • Claim deductions under Section 80C and 10(10D). 
  • Tax exemption on annual Long-Term Capital Gains (LTCG) up to Rs. 1 lakh.
  • LTCG is taxed at 10% after the exemption limit.
  • Short-term capital gains are taxed at 15%.
  • The tax treatment may vary based on NRI's residential status and Double Taxation Avoidance Agreements.

#You can discover the potential of your SIP investments in ULIP plans and mutual fund schemes by utilizing either a ULIP calculator or Mutual Fund calculator.

Working of a Systematic Investment Plan in India for NRI

The NRI in Singapore can follow the steps mentioned below to start investing in SIPs in India:

Step 1: Selecting a Mutual Fund

  • Research and choose a ULIP fund or mutual fund scheme that aligns with your financial goals and risk tolerance.

  • Opt for funds managed by reputable fund houses with a good track record.

Step 2: NRI Eligibility

  • Confirm your eligibility as an NRI to invest in Indian ULIP plans and mutual funds.

  • NRIs in Singapore can typically invest in SIPs as per regulations set by the Reserve Bank of India (RBI).

Step 3: KYC Compliance

  • Complete the Know Your Customer (KYC) process by submitting the necessary documents.

  • This step is crucial for regulatory compliance and can often be done online.

Step 4: Opening an NRI Account

  • Open a Non-Resident External (NRE) or Non-Resident Ordinary (NRO) account to facilitate SIP transactions.

  • Link this account with your mutual fund or ULIP investment plans for seamless transactions.

Step 5: Funding Your SIP

  • Transfer funds from your NRE/NRO account to your ULIP or mutual fund investment account.

  • You can set up an auto-debit facility for a hassle-free monthly investment.

Step 6: Choosing SIP Amount and Frequency

  • Decide the monthly investment amount based on your financial capacity and goals.

  • Choose the frequency of investment (monthly, quarterly) according to your preference.

Step 7: Monitoring and Review

  • Keep track of your SIP investments through regular statements provided by the insurance company or the mutual fund house.

  • Periodically review your portfolio and adjust your SIP amount if needed.

Step 8: Redemption and Returns

  • Understand the redemption process and how returns are credited to your NRE/NRO account.

  • Stay informed about tax implications and DTAA agreements on capital gains for NRIs.

Types of SIP Investment in India for NRI

The table below lists the significant types of Systematic Investment Plans in India based on the mode of investment in the SIP plan:

SIP Plans Top-up SIP Flexible SIP Perpetual SIP Trigger SIP
Description Increase your investment amount at fixed intervals Increase or decrease your investment amount as per cash flow No specified end date for investment in SIP Set up specific investment triggers based on chosen criteria
Benefit Increase investment with income growth Skip payments during cash crunch Redeem funds as needed or upon achieving financial goals Automate investment decisions based on market movements

Principles of a Systematic Investment Plan in India

A SIP investment plan follows the principle of rupee-cost averaging and the power of compounding. Let us understand them in detail from below:

  1. Rupee- Cost Averaging:

    • In an SIP investment plan, rupee-cost averaging is a strategy applied to mutual funds and ULIP plan funds.

    • It involves purchasing more units of your chosen fund portfolio when prices are low and fewer units when prices are high.

    • This approach helps to even out the overall cost of your investment over time.

    To illustrate this principle, let's explore it through an example using an SIP Rupee-Cost Averaging Calculator:

    SIP Months Invested Amount (in Rs.) Price Per Unit (in Rs.) No. of Units Bought
    10th January 2023 Rs. 10000 32 312.50
    10th April 2023 Rs. 10000 36 277.77
    10th July 2023 Rs. 10000 30 333.33
    10th October 2023 Rs. 10000 28 357.14
    Total Rs. 40000 31.23 (Average Cost) 1280.74

    If You Invest in a Lump Sum If You Invest in SIP
    You invest the entire Rs. 40000 on 10th April in Lump Sum:
    • Total No. of Units Bought = 1111.11
    As seen in the above illustration, if you invest Rs. 10000 per quarter:
    • Total No. of Units Bought = 1280.74

    Please note: The aforementioned table and values are only provided for illustration purposes and should not be correlated with the performance of any SIP mutual fund scheme.

  2. Power of Compounding

    • In an SIP plan, your money doesn't just grow on the amount you put in initially. It also earns interest on the interest it accumulates.

    • The returns your investment generates get reinvested, creating a cycle of growth that leads to additional returns over time.

    • The compounding effect in an SIP investment plan works best when you stay invested for a longer period.

    Illustration of the Power of Compounding

    If you invest in an SIP investment plan with the following details:

    • Monthly Investment = Rs. 10,000 per month

    • The SIP plan offers a rate of return = 12% p.a.

    • Interest compounding period = Annually

    Your SIP investment plan will grow as follows:

    After 5 years:

    • Total investment = Rs. 6 lakhs

    • Value of investment = Rs. 8.5 lakhs

    After 10 years:

    • Total investment = Rs. 12 lakhs

    • Value of investment = Rs. 23.5 lakhs

    After 15 years:

    • Total investment = Rs. 18 lakhs

    • Value of investment = Rs. 50.1 lakhs

    After 20 years:

    • Total investment = Rs. 24 lakhs

    • Value of investment = Rs. 96.8 lakhs

Documents Required for NRI for SIP Investment in India

The following table shows the documents required to start investing in an SIP plan in India for NRI:

  • Passport

  • PAN Card

  • Singapore Address Proof

  • India Address Proof (if applicable)

  • NRE/NRO Bank Account Details

  • Photograph (Recent)

Estimating Returns with SIP Calculator

An SIP calculator is like a helpful assistant that gives you an idea of how your money can grow in a mutual fund or ULIP plan. It considers a few key things:

  • Investment Amount: How much money you plan to put in regularly.

  • Period of Investment: The duration for which you plan to keep investing.

  • Expected Rate of Return: The percentage of profit you hope to make.

  • Frequency of Investment: How often you contribute money (monthly, quarterly, etc.).

After you provide these details, the SIP calculator does the math and shows you:

  • Total Amount Invested: The sum of all the money you've put in.

  • Returns Earned: The profits your investment has made.

  • Final Value of the Investment: How much your investment is worth now.

How to Choose the Best SIP Investment in India?

The NRI investor should consider the following aspects before investing in a Systematic Investment Plan (SIP) in India:

  1. Research Fund Categories:

    • Start by understanding your financial goals and risk tolerance.

    • Explore mutual fund categories like equity, debt, or hybrid based on your objectives.

  2. Fund Performance:

    • Evaluate the historical performance of funds.

    • Look for consistent returns and a fund manager's track record.

  3. Expense Ratio:

    • Pay attention to the expense ratio, as lower fees can significantly impact your overall returns.

  4. Fund House Reputation:

    • Opt for well-established fund houses with a credible reputation.

    • Check their financial stability and customer service reviews.

  5. Risk Factors:

    • Assess the risk associated with the fund.

    • Diversify your investments to mitigate risks.

NRI-specific Considerations:

  1. Regulatory Compliance:

    • Ensure that the chosen fund complies with regulations for NRIs.

    • Check for the Foreign Account Tax Compliance Act (FATCA) and the Prevention of Money Laundering (PMLA) norms.

  2. NRE or NRO Account:

    • Open a Non-Residential External (NRE) or Non-Residential Ordinary (NRO) account in India for seamless fund transactions.

  3. Tax Implications:

    • Understand the tax implications both in India and Singapore.

    • Consider consulting a tax advisor to optimize tax efficiency.

  4. Repatriation Rules:

    • Familiarize yourself with repatriation rules to transfer funds back to Singapore without complications.

FAQ's

  • Which SIP is best for NRI?

    The list of 5 popular SIPs for NRIs in India that have performed well historically are as follows:
    • Tata AIA Whole Life Mid Cap Equity Fund

    • Bajaj Allianz Life Growth Plus

    • ICICI Prudential Value Discovery Equity Fund

    • Kotak Standard Multicap Fund

    • L&T India Prudence Fund

  • Can I use an NRE account for SIP?

    Yes, NRIs can use an NRE account for SIP in India, but with certain limitations:
    • Repatriation: Any returns (dividends, capital gains) from the SIP investment can only be repatriated (sent back) outside India in accordance with FEMA regulations

    • Fund Options: Not all ULIP or mutual fund schemes are available for NRIs to invest in using an NRE account.

  • What is the best investment option for NRI?

    The list of best investment options in India for NRI is as follows:
    • Unit Linked Insurance Plans (ULIPs)

    • Child Education Plans

    • Pension Plans

    • Fixed Deposits (FD)

    • Capital Guarantee Plans

    • Equity Linked Savings Scheme (ELSS)

  • Can I invest 1000 ₹ per month in SIP?

    Yes, NRIs can absolutely invest 1,000 ₹ per month in SIPs, and it's a great way to start building wealth in India over the long term.

+For Mutual Fund midcap category Returns https://www.morningstar.in/tools/mutual-fund-category-performance.aspx & for Insurance midcap fund category Returns- https://www.morningstar.in/tools/insurance-fund-category-performance.aspx
*Past 10 Year annualised returns as on 01-12-2023
*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.

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