It’s of paramount significance for anyone to invest in the markets to beat inflation as well as to generate wealth. Investments are an ideal instrument to build financial assets, earn good returns, and prepare for retirement.
In terms of investments, Indian Expats have an array of options provided by the Indian government as well as private sectors.
Here’s what you can invest in:
Fixed Deposits:
The majority of banks in the country offer fixed deposit services to both domestic and non-resident Indians. Fixed deposits allow you to keep your money in an account for a specific period. Funds cannot be withdrawn before the end of the term. After the expiry of the period, you get money as well as interest. NRE and NRO are two beneficial fixed deposits that users opt for. Let’s review them in-depth.
Non-Resident External Account (NRE): To park foreign earnings, an NRI opens an NRE account in India in his or her name. Funds (both principal and interest amounts) can be freely transferred from India at any time. Interest earned on your NRE account will not be taxable in India, giving you more economic control over your finances.
Non-Resident Ordinary Account (NRO): A Non-Resident Ordinary Account is one of the most common ways that NRIs manage their deposits and income in India as dividends, pensions, rents, etc. Funds can be deposited into this account in both Indian and foreign currencies.
Mutual Funds:
Mutual funds invest investors’ money in financial instruments that are correlated with the stock market, such as stocks and bonds, to generate returns. Securities Exchange Board of India (SEBI) regulates mutual funds. As a result of the higher risk, mutual funds offer better returns than regular fixed deposit accounts. The taxation of mutual funds differs based on their type.
Equity Funds – The majority of the fund is stocks (equity). A tax of 15% will be imposed if you sell the investment within the first year. The investment becomes tax-free after more than one year.
Debt Funds – Stocks (equity) make up less than 65% of the fund.Those who sell it within 3 years of owning it pay 30% tax. After 3 years you pay only 20% tax.
Listed below are eight mutual fund houses that accept investments from the US and Canada:
- Aditya Birla Sun Life Mutual Fund
- SBI Mutual Fund
- UTI Mutual Fund
- ICICI Prudential Mutual Fund
- TATA Mutual Fund
- L&T Mutual Fund
- PPFAS Mutual Fund
- Sundaram Mutual Fund
Real Estate:
Any immovable property in India can be purchased by an NRI, except for agricultural land/plantation property or a farmhouse. It remains the best investment opportunity – and will continue to grow.
National Pension Scheme:
The NPS is a retirement savings plan that assigns subscribers a unique Permanent Retirement Account Number (PRAN). NRIs between the age group of 18 and 60 can open an NPS account. NRIs with a PAN card and a bank account can open an NPS account online. Market-linked schemes will provide higher returns than non-market-linked schemes. Flexible investment options are also available.
