NRI Investment Plans in India

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Financial planning is of utmost importance in today's time, be it for an Indian Resident or an NRI (Non-Indian Resident). India's growing economy in the past two decades has attracted many Foreign Direct Investments (FDIs), and hence, NRIs have also started considering investing in India as one of the most viable options. There are several NRI investment options that can be considered while planning to invest.

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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 hence is coming up with vital options so that NRIs can diversify their global portfolio. But still, countries like the USA and Canada have some restrictions regarding NRIs investing their money.

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

Best Investment Plans in India to Invest in 2024

Here is the list of best investment plans in India:  

Investment Plans AUM 3 years return 5 years return  10 years return 
Tata AIA Fortune Pro ₹26,272 Cr 27.23% 28.59% 22.51% Get Details
Birla Sun Life Wealth Aspire Plan ₹22,157 Cr 25.01% 21.37% 21.09% Get Details
Bajaj Allianz Smart Wealth Goal ₹26,992 Cr 23.44% 19.51% 20.39% Get Details
Max Life Online Savings Plan ₹33,767 Cr 28.29% 26.79% 20.21% Get Details
HDFC Standard Sampoorn Nivesh (11X) ₹60,861 Cr 24.77% 26.65% 19.81% Get Details
PNB Metlife Mera Wealth Plan ₹5,938 Cr 35.23% 30.62% 19.37% Get Details
Kotak Mahindra OM E-Invest ₹17,619 Cr 17.42% 18.35% 16.89% Get Details
Edelwiess Tokio Wealth Secure+ ₹1,706 Cr 25.49% 22.89% 15.69% Get Details
ICICI Prudential Signature ₹117,070 Cr 18.94% 16.76% 15.02% Get Details
AVIVA Life i-Growth ₹1,025 Cr 14.83% 15.01% 14.61% Get Details
SBI eWealth Insurance ₹85,670 Cr 13.65% 15.04% 14.38% Get Details
LIC SIIP ₹9,182 Cr 9.26% - - Get Details
See More Plans

Disclaimer: "Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer."

 

Best Investment Options for NRIs in India

Here are some best investment options for Non-Resident Indians planning to invest 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. This insurance plus investment plan helps in the creation of wealth as well as protects the family of the insured after their untimely demise. It is undoubtedly gaining huge popularity these days and is considered one of the best sources of investment 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 debt and equity funds to reap financial benefits.

    The amount invested in ULIP can be chosen as per the financial goal of the investor.

    Benefits of ULIPs

    • It is an investment plus insurance plan.

    • Generally, 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 the Income Tax Act, 1961.

    • 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.

  2. Capital Guarantee Solution Plan

    The capital guarantee plan is an investment that focuses on safeguarding the investor's principal from any losses during economic downturns. Under the capital guarantee fund, the fund company absorbs any losses experienced by the underlying investment. Capital Guarantee Plans are basically ULIP plans that are a combination of insurance and investment. Under this plan, 50-60% of the amount invested goes into debt for capital protection, and the rest is invested in equity. The plan comes with a policy tenure of 10 years and a premium paying tenure of 5 years.

    The significant advantage of the capital guarantee plan is that on the maturity of the policy, the full premium is returned along with the additional benefits made by the product. The capital gain funds thus aim to invest majorly in conservative instruments to help minimize the probability of losses and offer guaranteed returns.

  3. Retirement Plans

    Retirement plans, in general, are policies and plans specially designed to safeguard an investor's future after retirement. Retirement plans help in creating a financial corpus for an investor, ensuring that they maintain a particular lifestyle, even after they have stopped earning.

    There are 2 types of retirement plans available in the market:

    Pension And Annuity PlansPension And Annuity Plans

  4. Guaranteed Returns Traditional Plans

    Guaranteed returns traditional plans are one of the most vanilla and oldest forms of insurance plan that comes with the following benefits:

    • Guaranteed fixed returns

    • Complete risk coverage

    • Life protection

    • Tax deduction benefits

    Guaranteed return traditional plans are highly-suited for investors not having a considerable risk appetite. Total Sum Assured + Vested or Guaranteed Bonus is provided to the investor at the time of maturity of the plan. The highlighted feature of the Traditional Plans is that the investor is not directly linked to the market and hence, only has to enjoy maximum returns provided by the plans without thinking about market fluctuation.

  5. Child Plan

    Due to massive economic growth in India, more Non-Resident Indians (NRIs) are willing to invest their money here for better growth. A child plan is one way of making investments in India and safeguarding your child's future.

    A child plan is a combination of insurance and investment under one roof. The insurance part helps in protecting your child against any unforeseen event, such as your untimely demise. In addition, it ensures that your child receives a fixed annual payment from your insurer, as per the terms and conditions of your policy.

    On the other hand, the investment component helps in fund accumulation through investment in various financial instruments. These instruments include equities, debt bonds, etc.

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

    One more reliable source of investment could be the National pension scheme. It is a completely government-backed scheme that lets the Non-Resident Indians invest in either equity, debts, or a combination of both.

    A national pension scheme is for individuals between the age of 18 years to 60 years and can be opened with minimal documents like Aadhaar and PAN card.

    Non-Resident External Account and Non-Resident Ordinary Account are generally used while investing in National Pension Scheme.

    Under National Pension Scheme, you can go for either:

    Active Choice

    Where the asset is allocated in between

    • Equity

    • Corporate Bonds

    • Government Securities

    While selecting an active choice, 75% (maximum) can be allocated in equity.

    Auto Choice

    Asset allocated completely depends upon the age of the Non-Resident Indian.

    Auto means that the assets are allocated automatically and cannot be decided to be the investor.

  7. Mutual Funds

    Mutual Funds are safer and more option as compared to direct equity and are gaining rapid popularity these days. NRIs with limited expertise in foreign investment can surely opt for mutual funds for better returns. However, it is important to understand the nature of mutual funds and whether they are open for Canada or USA NRIs before making any kind of investment. Checking of rules for house parties is another important criterion.

    Foreign Exchange Management Act (FEMA), 1999 governs the Non-Resident Indian mutual fund investments. NRIs, as per the government rule, can make investments in the following capital markets in India:

    • Direct stocks,

    • Mutual funds,

    • Exchange-traded funds.

     Mutual fund investments are subject to market risk and are a little riskier as compared to fixed deposits or national pension schemes. Therefore, an NRI should select funds as per their risk profile and financial objectives.

    Key points under Non-Resident Indian investment in Mutual Funds are as follows:

    • Money can be invested through Non-Resident External Account

    • Money can be invested through a Non-Resident Ordinary Account

    • Money can be invested only in Indian National Currency only and not in foreign currency

  8. Fixed Deposits

    Not just for the citizens of India, fixed deposits are quite common for the Non-Residents Indians as well. Directly depositing in banks is one of the safest options and is considered the most famous. The Non-Resident Indians can deposit their money in India through one of the following accounts:

    • Fixed Deposit in NRE Account (Non-Resident External Account)

    • Fixed Deposit in NRO Account (Non-Resident Ordinary Account)

    • Fixed Deposit in FCNR Account (Foreign Currency Non-Resident Account)

    For better returns than FDs, an NRI can also opt for an all-new "Max Life Smart Fixed-Return Digital Plan" that offers a combination of higher fixed returns, life coverage, and tax savings, making it a preferred choice for investors looking for guaranteed fixed returns.

    Some of the main highlights of the plan are:

    • Guaranteed returns as high as 6.5%, payable as a lump sum at maturity.

    • Tax saving benefits on the premiums and tax-free maturity benefits.

    • A loan can be availed in case of financial emergencies.

    • Insured can select the life insurance coverage as per their financial requirement.

    • Additional 0.25% maturity benefits are available for a policy term of 5 years.

    • Additional 0.50% maturity benefits are available for a policy term of 10 years.

    investment plans for nrisinvestment plans for nris
  9. Real Estate

    Real estate prices have increased immensely over time. Therefore, it is very convenient for Non-Resident Indians to buy property in India and put it out on rest for some extra income. Real estate is a decent source of investment as it offers good long-term returns and steady 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

    • Non-Resident Ordinary Account

    • Foreign Currency Non-Resident 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 within the portfolio investment scheme of the Reserve Bank of India.

    Bank accounts used for equity investments by Non-Resident Indians are as follows:

    • Non-Resident External Account

    • Non-Resident Ordinary Account

    • Demat Account

    • Trading Account to invest in the stock market in India

  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 maximize their returns on their investments. In this, a professional fund manager is appointed to manage the investment portfolio of the client in accordance with their objectives and risk tolerance.

    One of the primary benefits of PMS is that it provides the client with a high degree of flexibility and control over their investment portfolio. They also has the option to choose the investment and freedom to enter or exit a particular investment any time. However, the same facility is not available in traditional mutual fund investments where the decisions are made by fund managers.

  12. Public Provident Fund or PPF

    Public Provident Fund (PPF) is a popular long-term savings and investment option offered by the Indian government. It is also available to non-resident Indians (NRIs), making it a viable investment option for those living abroad who wish to invest in India. 

    It is a 15-year investment scheme that can be extended for an additional five years. The scheme offers tax benefits and is backed by the government, making it a safe investment option.

    PPF is available to NRIs, subject to certain conditions. NRIs can open a PPF account either in their name or in the name of a minor child of whom they are a guardian. 

    The following are some of the features of PPF for NRIs:

    • Eligibility: NRIs are eligible to open a PPF account provided they are Indian citizens. They cannot open a new account once their NRI status is changed to that of a resident.

    • Minimum investment: The minimum investment amount for PPF is INR 500 per year, while the maximum investment limit is INR 1.5 lakh per year.

    • Tax benefits: PPF offers tax benefits under Section 80C of the Income Tax Act. The interest earned on the investment and the maturity amount are tax-free.

    • Tenure: The tenure of the scheme is 15 years, which can be extended for an additional five years.

    • Withdrawal: NRIs can make partial withdrawals from their PPF account after completion of five years from the end of the financial year in which the initial deposit was made.

    • Nomination: NRIs can nominate a person to receive the proceeds of the PPF account in case of their death.

    • Loan facility: NRIs can also avail of loan facility against their PPF account after completion of three years from the end of the financial year in which the initial deposit was made.

  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.

    1. 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.

    2. Perpetual Bonds

      Perpetual bonds are a type of debt instrument that does not have a specific maturity date. Instead, the issuer promises to pay the investor a fixed amount of return every year, making it a perpetual source of income for the investor. Due to their unique characteristics, perpetual bonds are relatively rare and typically issued by large corporations or government entities. 

    3. Public Sector Unit or PSU Bonds 

      When you invest in PSU bonds, you essentially loan money to a PSU company, which guarantees to pay you interest upon maturity. The interest rate offered on PSU bonds depends on the creditworthiness of the issuing PSU company.

      PSU bond investors enjoy the benefit of tax-free interest income under section 10 (15) (IV) (h). However, if you sell the bonds after owning them for more than three years, you will be taxed at a rate of 20%. NRIs can also avail tax deductions by investing in REC and NHAI capital gain bonds under section 54 EC.

  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

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

Now that we know the best investment options for Non-Resident Indians (NRIs) in India, it is important to know the reasons why an NRI should actually consider investing in India. Here are some reasons why NRIs should go for Indian investments for better returns and a safer future: 

  1. To Prepare for Their Retirement

    Getting ready for your old age, both financially and physically, should be on top priority for any individual. People must invest their savings in different platforms to secure their future. The money that you save or invest for your future will determine the quality of life that you will lead. So, it is much more important for NRIs to secure their future as they live in a foreign land and have to be fully safe and secure as they are far away from their close ones.

  2. To Get Good Returns

    Money invested in the right direction today will lead to more money in hand at the time of need. Whatever an NRI invests, depending on their pocket will lead to growth in India. Higher interest rates lead to more risk and profits, whereas low-interest rates substantially decrease the risk and profit.

    It is highly recommended for investors to invest carefully and take only the amount of risks they can afford in the future.

  3. Money for The Family

    If an NRI (Non-Resident Indian) needs to send some money to their family back in India, extra NRI investments will come to your rescue in the hour of need. So even if you earn enough in your country, an NRI investment will ensure you have some extra pounds in your pocket, which can eventually help your family.

  4. To Build Financial Assets

    Suitable investments help you grow your financial wealth and eventually build up financial assets. For instance, if an NRI has enough money, they can look forward to buying a house in India. This house will lead to rental income or can also be used as security when applying for any loan. Hence, an NRI investment can help you build financial assets that will surely help you in the long run.

Wrapping it up!

Investment opportunities are growing every past day due to the increase in globalization. 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.

One should keep in mind their finances and savings before investing. Also, it is important to understand the investment options before going forward with the investment.

What is a better option to invest in the country where you lived once?

Invest to be secure in the future!

 

NRI Investment Plans in India FAQs

  • Who is eligible to invest in NRI plans in India?

    NRI individuals who fall in the age bracket of 18 to 60 are eligible to initiate an NPS account with a POP (Point of Presence) in India. If an NRI possesses a PAN or an Aadhaar Card, he/she can also open an eNPS account. It is advisable to utilize your NRO or NRE bank account for easy investing.
  • What are the different types of NRI investment plans available in India?

    ULIPs or Unit Linked Insurance Plans include the benefits of both insurance and investment. The dual benefit plan helps in wealth creation and protects the family of the insured after their untimely demise. 
  • 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
    • Higher returns compared to foreign markets
    • Easy repatriation of funds invested
    • Protection against currency fluctuations
    • 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?

    If NRIs invest in particular Indian assets, they are subject to a tax of 20% on the income generated.
  • 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 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.
  • Who regulates NRI Investments in India?

    Foreign investments are regulated under the Foreign Exchange Management Act (FEMA), 1999 by the Government of India.
  • Is an NRI allowed to buy property in India?

    Yes, an NRI is allowed to acquire any commercial or residential property in India. NRIs can also acquire property in the form of a gift from any relative who is an Indian resident, or a fellow NRI.
  • Is LIC Policy available for NRIs?

    Life Insurance Corporation of India has launched special plans and policies for NRIs after its successful and rising popularity amongst individuals.
  • Is PAN Card compulsory for NRIs?

    PAN Card is necessary for Non-Resident Indians who have got a taxable income in India as per the Income Tax Act, 1961. PAN Card is also mandatory for share trading or investment in Mutual Funds according to the new rules by SEBI.
  • Can NRIs invest in PPF?

    Yes, a Non-Resident Indian can have a PPF account and invest in it. A PPF Account however can be opened only when the individual was an Indian resident.
  • Can NRIs invest in sovereign gold bonds?

    Even though investing in sovereign gold bonds is one of the safest options of investments, Non-Resident Indians are still not eligible for investment in the same.
  • Can NRIs invest in liquid funds?

    Yes, an NRI can surely invest in Mutual Funds on a full non-repatriation or repatriation basis. However, completion of KYC is important for any kind of investment.

*Past 5 Year annualised returns as on 01-04-2024
*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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