NRI Investment Plans in India

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NRI Investment Plans refer to financial products and opportunities designed for NRIs (Non-Resident Indians) to invest their wealth in the Indian market. NRIs can use these investment plans to grow their wealth, generate passive income, and diversify their investment portfolio while taking advantage of the potential returns offered by the Indian economy.

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Lakshit Mahajan
Written By: Lakshit Mahajan
Lakshit Mahajan
Lakshit Mahajan Business Unit Head - NRI Investment
Mr. Lakshit Mahajan is a Business Unit Head of Savings NRI at Policybazaar with 8 years of experience, having graduated from the International Management Institute, New Delhi. Lakshit has vast knowledge and understanding of insurance with his previous stints with Max Life and HDFC Life. He is adept at managing NRI customers from the GCC, USA, UK, UAE, Australia, Singapore, etc. looking to invest in India, providing invaluable advice to individuals and helping them meet their long term financial goals.
Vivek Jain
Reviewed By: Vivek Jain
Vivek Jain
Vivek Jain Head of Savings business
Mr. Vivek Jain is the Business Unit Head for Investment Business at Policybazaar.com. A graduate of the prestigious IIM Calcutta he brings over a decade of invaluable experience to his current role. In his capacity as Business Unit Head, he has been a driving force behind the success of Policybazaar's Investment business. Mr. Jain is recognized for his instrumental role in product innovation within the Savings/Investment domain. His leadership and expertise have been pivotal in scaling up the Investment business, underscoring his significant contributions to Policybazaar.com's growth and success.

The Indian Government is opening more doors for NRIs (Non-Resident Indians) to invest in their home country and is coming up with multiple options so that NRIs can diversify their global portfolio. 

In this article, you will understand different NRI investment options that can be considered while planning to Invest in India.

 

Best Investment Options for NRIs in India

Here are some of the best NRI investment options in India:

  1. Unit Linked Insurance Plans (ULIPs)

    ULIPs or Unit Linked Insurance Plans are plans that include the benefits of both insurance and investment. ULIP Plans help to create wealth as well as protect the family of the insured after the untimely demise of the policyholder. In the landscape of NRI investment options in India, ULIPs stand out as one of the best investment plans for moderate to high-risk-taking investors.

    The investment amount in the ULIP is divided into 2 parts:

    • One part of the premium is to provide life insurance coverage.

    • The other part of the premium is used for investments in various funds in the Indian equity market.

    Benefits of ULIPs

    • It comes with a 5-year lock-in period that helps save money for the future.

    • Partial withdrawals can be made after the completion of the lock-in period.

    • Offers tax exemptions under Section 80C and Section 10(10D) of the Income Tax Act, 1961^. Add disclaimers

    • Offers easy switching between funds facility to investors.

    • Allows diversification in the investor's portfolio that helps them in the future.

    • Flexibility to redirect future premiums to funds of the investor's choice.

    • A guaranteed sum assured is provided to the nominee in case of the untimely death of the investor.

    • Provides long-term benefits along with high returns.

    Disclaimer: ^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.

  2. Capital Guarantee Solution Plan

    The capital guarantee plan is a secure investment option for NRIs seeking stable returns in India. This NRI investment option in India focuses on safeguarding the investor's principal from economic downturns. In this plan, portion of the invested amount is allocated to debt for capital protection, while the remaining is invested in the equity market through equity funds. One of the significant advantages of the capital guarantee plan, making it an attractive NRI investment option in India, is that upon policy maturity, the investor receives the total investment amount paid by the customer during the payment term along with additional market-linked returns.

  3. Pension plans

    Retirement or pension plans for NRIs are specially designed to safeguard an investor's future after retirement. Pension plans help in creating a financial corpus ensuring that you can maintain a healthy lifestyle even after you have stopped earning.

    Retirement Plans:

    • Purpose: Income source post-retirement.

    • Saving Strategy: Regular contributions during earning years.

    • Benefit: Stable retirement life.

    • Inflation Protection: Designed to shield returns from inflation for maximum NRI returns.

    Annuity Plans:

    • Function: Offers regular payouts throughout post-retirement life.

    • Accumulation Phase: Regular contribution during earning years 

    • Post-Retirement: regular income payout to meet your daily needs nad expenses.

  4. Guaranteed Returns Traditional Plans

    Guaranteed Returns Traditional Plans, a popular choice for NRI investment in India, refer to financial products in which individuals invest a certain amount of money for a specified period, and the plan guarantees a predetermined return on the investment. These plans provide a level of assurance to the NRI investor, as the returns are fixed and guaranteed, irrespective of market fluctuations. This makes them a compelling option for non-resident individuals looking to secure stable returns while participating in the Indian financial landscape.

    GUARANTEED RETURNS

    (Total Sum Assured + Vested or Guaranteed Bonus)

  5. Child Plan

    With India's booming economy, NRIs are increasingly opting to invest in India for superior growth. A child plan stands out as one of the best NRI investment options in India, combining the benefits of insurance and investment. The insurance aspect safeguards your child from unforeseen events, providing financial protection. The investment component facilitates fund accumulation through various funds, ensuring a secure future for your child.

    Triple Benefits of Child Plan:

    • Insurer pays future premiums after policyholder's death.

    • You get tax benefits under Section 80(C) and no tax on returns under Section 10 (10D)

    • Insurer pays a certain amount as income to the nominee to meet the daily expenses.

    investment plans for nrisinvestment plans for nris
  6. National Pension Scheme

    The National Pension Scheme (NPS) is a voluntary, long-term retirement savings initiative in India, designed to provide individuals with a pension after retirement. It was launched by the Government of India to encourage systematic savings for individuals during their working years, ensuring financial security in their post-retirement phase. NPS is one of the investment options for NRIs in India.

  7. Mutual Funds

    Mutual funds are investment vehicles that pool money from a large number of investors to collectively invest in a diversified portfolio of stocks, bonds, or other securities. These funds are managed by professional fund managers or investment firms. Mutual funds provide individual investors, including those exploring NRI investment in India, with an opportunity to invest in a diversified and professionally managed portfolio.

  8. Fixed Deposits

    Fixed deposits, commonly known as FDs, are financial instruments offered by banks and financial institutions where an individual deposits a specific amount of money for a predetermined period at a fixed interest rate. In return, the financial institution pays the depositor interest at regular intervals and returns the principal amount at the end of the agreed-upon tenure. Fixed deposits are considered a low-risk investment option as they offer a guaranteed return on investment, making them a good choice for NRI investment in India.

    investment plans for nrisinvestment plans for nris
  9. Real Estate

    Real estate prices have increased immensely over time. Real estate is a decent NRI investment option in India as it offers long-term returns and growth.

    Bank accounts to be used by Non-Resident Indians to buy or sell a property in India are as follows:

    • Non-Resident External Account (NRE Account)

    • Non-Resident Ordinary Account (NRO Account)

    • Foreign Currency Non-Resident Account (FCNR Account)

  10. Equity Investments

    In case an NRI is an aggressive investor, then investing in equity is an ideal investment option. The NRIs can easily invest in India's stock market.

  11. Portfolio Management Services (PMS)

    Portfolio Management Services (PMS) is a professional investment service tailored to meet the needs of high-net-worth individuals (HNIs) who wish to maximise their returns on their NRI investments in India. In this, a professional fund manager is appointed to manage the investment portfolio of the client in accordance with their objectives and risk tolerance.

  12. Public Provident Fund or PPF

    PPF stands for Public Provident Fund. It is a popular long-term savings and investment tool offered by the Indian government. The PPF scheme is designed to encourage savings and investments among Indian residents. Individuals can open a PPF account with authorised banks or post offices and contribute a specified amount annually. The deposited amount qualifies for tax deductions under Section 80C of the Income Tax Act. An NRI cannot invest in PPF. However, if people with current NRI status, opened a PPF account before they got the NRI status, they can continue with the account until maturity

  13. Bonds and Non-Convertible Debentures (NCDs)

    As an NRI, investing in bonds and non-convertible debentures (NCDs) can be a safe and reliable option for generating fixed income. Bonds and NCDs are debt instruments issued by companies, financial institutions, or the government, where investors lend their money to these entities for a fixed period in exchange for interest payments.

    Non-Convertible Debentures (NCD)

    Non-convertible debentures (NCDs) are a secure and long-term investment option that NRIs can consider. These debt instruments are backed by the assets of the company issuing them.

  14. Pre-IPO investment

    Pre-IPO investment is investing in a company before it goes public. It can offer significant returns, but also carries high risk since private companies may lack oversight and have less financial information available. Investors should conduct thorough research and work with experienced advisors before making any investment decisions.

Reasons Why Non-Resident Indians (NRIs) Should Invest in India

Reasons Why Non-Resident Indians (NRIs) Should InvestReasons Why Non-Resident Indians (NRIs) Should Invest

Here are some reasons why NRIs should invest in India:

  1. To Prepare for Their Retirement

    Getting ready for old age is important, especially for NRIs living abroad. Investing in various platforms, including NRI investment options in India, ensures financial security during retirement.

  2. To Get Good Returns

    Investing wisely today can lead to substantial returns in the future. NRIs can explore NRI investment options in India for potential growth, with careful consideration of risk and profit.

  3. Money for The Family

    NRI investments in India can serve as a financial safety net for families back home, providing extra support during times of need.

  4. To Build Financial Assets and Portfolio

    Exploring NRI investment options in India enables the growth of financial assets, such as purchasing property for rental income or collateral for loans, contributing to long-term financial stability.

Wrapping it up!

Investment opportunities are growing every day due to the increase in globalisation. Non-resident Indians willing to invest their money in their home country have many more choices to select from these days than in the past. Investing in India comes with a wide range of options, but it is advisable to understand the investment before going forward.

Frequently Asked Questions

  • Can NRI invest in SIP in India?

    Yes, NRIs (Non-Resident Indians) can invest in SIP (Systematic Investment Plan) in India just like resident Indians. They can invest in various SIP plans to benefit from rupee appreciation and grow their wealth over time.
  • Where can I open an NRI investment account?

    You can open an NRE or NRO account with a bank in India and use that to invest.
  • Who is eligible to invest in NRI plans in India?

    Anyone who is an Indian citizen residing abroad, be it an NRI / OCI / PIO is eligible to invest in NRI plans in India.
  • What are the different types of NRI investment plans available in India?

    Different types of NRI investment plans available are:
    • Unit Linked Insurance Plans (ULIPs)

    • Capital Guarantee Solution Plan

    • Retirement Plans

    • Pension Plans

    • Annuity Plans

    • Guaranteed Returns Traditional Plans

    • Child Plan

    • National Pension Scheme

    • Mutual Funds

    • Fixed Deposits

    • Real Estate

    • Equity Investments

    • Portfolio Management Services (PMS)

    • Public Provident Fund or PPF

    • Bonds and Non-Convertible Debentures (NCDs)

    • Pre-IPO investment

  • What are the benefits of investing in NRI plans in India?

    Here are some benefits of considering NRI investment plans in India:
    • Diversification of investment portfolio

    • High returns

    • Tax benefits under certain investment schemes

    • Opportunity to invest in sectors with high growth potential

    • Professional investment management by experienced fund managers

  • Are NRI investment plans subject to taxation in India?

    Yes, some NRI investment plans are subject to taxation in India. The tax treatment depends on the type of investment and how long it is held. For example, interest earned on NRO accounts is taxable, while interest on NRE accounts is not. Capital gains from equity investments can be taxed at 10% or 15%, depending on how long the investment is held. It's advisable to consult a tax advisor for specific situations.
  • How can NRIs monitor and manage their investments in India?

    You can consider the following points to monitor or manage investments in India:
    • Stay updated through online portals and financial news websites.

    • Choose the Portfolio Management Service (PMS) investment vehicle to manage the investments.

    • Keep track of market trends and stay informed about fund performance.

    • Regularly review investment portfolios and adjust based on your financial goals and risk appetite.

    • Seek advice from a financial advisor or investment professional.

    • Stay updated on regulatory changes and taxation policies that can impact your investment.

  • Can an NRI invest in a Post Office Scheme?

    A Non-Resident Indian cannot invest directly in a Post Office scheme in India. For investment in the Post Office scheme in India, an NRI has to have a joint account with a relative being a resident in India.
  • Is an NRI allowed to buy property in India?

    Yes, an NRI can acquire any commercial or residential property in India.
  • Is PAN Card compulsory for NRIs?

    PAN Card is necessary for Non-Resident Indians who have a taxable income in India as per the Income Tax Act, 1961.
  • Can NRIs invest in PPF?

    NRIs can only contribute to existing PPF accounts opened while they were resident Indians. New PPF accounts cannot be opened by NRIs.
  • Can NRIs invest in sovereign gold bonds?

    According to the Foreign Exchange Management Act (FEMA) of 1999, Non-Resident Indians are not permitted to make investments in Sovereign Gold Bonds.
  • Can NRIs invest in liquid funds?

    Yes, NRIs can invest in liquid funds through their NRE accounts.

*Past 5 Year annualised returns as on 01-06-2024
*All savings plans are provided by the insurer as per the IRDAI approved insurance plan. Tax benefit is subject to changes in tax laws. 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.
#The lumpsum benefit is calculated if policyholder invested ₹10000 monthly for 10 years in the fund with a policy term of 20 years. This Point To Point past performance data of last 10 years has been used to illustrate a scenario for the customers benefit. It is assumed that the past 10 years returns would have also been delivered in last 20 years. This is not guaranteed and not in anyway indicative of what the customer may actually get 20 years from now. The investment is subject to market risk and the risk is borne by the policyholder.

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