India has seen tremendous growth in the industrial sector and by this, it attracts the NRI residents to invest in India, to provide funding to their family or to build a financial asset in their home country. India has improved its growth rate, increased industrial growth which make NRI interested in investing in India. In the last two decades, there is an immense growth in India which increases the Foreign Direct Investment (FDI) in India.
Reasons why NRI should invest in India?
- Prepare for retirement
- Build financial assets
- Get returns
- Provide funding to their family
Best NRI options for investment in India
The common form of investment available for both the residents and non- residents of India. In this form, there is a lock-in period in which it is not allowed to withdraw any amount before the lock-in period. The rate of interest depends on the amount deposited and the tenure selected, longer the tenure, higher the interest. Bank fixed deposit are considered as the safest form of investment option.
NRI can start their fixed deposit with their NRE, NRO or FCNR accounts. NRE means Non-Resident External Account in which the investment is done on rupees. NRO means Non-Resident Ordinary Account in this account which is generally used for Indian income like rent, dividend or pension funds. FCNR means Foreign Currency Non-Resident in which it is used for foreign currencies, to avoid the currency fluctuations risk.
Mutual funds are large pools of different asset type which is actively managed by the fund managers. It is operated under strict regulations of the Securities Exchange Board of India (SEBI). It possesses moderate risk as it is not the safest instrument to invest in the bank and also not the riskiest investment in stock markets. Mutual funds can offer more returns than a bank.
NRI’s can invest in mutual funds through NRE or NRO accounts. They used to invest in INR(rupees) only and not in foreign currencies. The rate of invest depends upon on the types of funds like debt, equity or hybrid. There no limitations for NRI’s to invest in funds.
Equity is considered as the riskiest investment, only the individual who can take the risk can invest in equity. For investing in equity, NRI can invest through Demat account after getting a SEBI registered broker. NRI cannot invest over 10% of paid-up capital in the company. They also need a trading account and also NRE or NRO account with the bank.
After the current 2019 elections, the stock market has met the new highs in the market which in future will be expected to affect the increment in investment in India through FDI’s or NRI.
Real estate is considered to be the most favorite investment options to invest for Indians. For NRI’s also they can invest in both residential and commercial. Real estate investment provides long term growth. As India is a developing nation, the prices of the property in the metro cities have been skyrocketed. It attracts the eye of NRI’s to invest in property and to get the best possible returns in the long term period.
NRI’s are restricted to buy the agricultural lands or farmlands. Investing in India turns to be a good option as it is a developing nation and it will provide vast opportunities in future for the same as when the proper development takes place.
This scheme is useful for saving for retirement started by the Indian Government. It provides benefit likes cost-effective and tax exemption. It comes with various investment options like to invest in equity funds or fixed income funds. Investment in NPS is considered as save as investing in PPF and bank FD’s.
NRI’s whose age lies within 18 to 60 age and have citizenship can only invest in NPS through their NRO or NRE accounts. NPS offers a good return and safety for the funds and an accumulated corpus for retirement.
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