Top Things to Know For NRIs Investing in Wealth
India is observing a huge industrial development for the past three decades. This has resulted in attracting FDI (Foreign Direct Investment). The state has prompted many NRIs to see India as a feasible destination for investments and building wealth. Let’s take a look at the top things to know for NRIs that are interested in investing in India through wealth management companies.
The Best Investments You Can Make In India
The Government of India has been making it more conducive for varied businesses each day. With several options where one can invest, it can get a bit confusing for NRIs to sort out the different choices they have.
While we consider returns, these are the top investment options that NRIs in India have for 2021:
Fixed Deposits or FD’s aren’t just popular among citizens of India but also NRIs. It remains one of the safest options for investments and there are almost no examples of a bank defaulting over them. NRIs can begin their FD via NRO, NRE, or FCNR accounts.
The rate of interest will be dependent on the amount, tenure of deposit, and the bank.
FD in NRE accounts:
You might consider going for opening an NRE account. The interest that you’ll earn remains tax-free, but one can get taxed in the country one resides in. The interest rate can range between 5 to 7% as per the deposit tenure.
FD in NRO accounts:
You can use an NRO account for controlling Indian income. For example, one can have rental income, share or mutual funds dividends and can get paid in the NRO accounts. One can send a maximum of $1 million from this account once relevant documents are produced.
FD in FCNR accounts:
You also have the option to open a Foreign-Currency Non-Resident Account or FCNR in any currency. The tenure can range from 1 to 5 years and the interest you’ll earn stays tax-exempted. Moreover, fluctuations in foreign exchange don’t have an impact on deposits made in FCNR accounts.
National Pension System
If you’re an NRI between the ages of 18 to 60 years you can open an NPS account via Point of Presence (POP) in India. You can also open an eNPS account in case you have an Aadhaar card or PAN card. You can consider using NRE or NRO account for investing in your National Pension System.
You can choose to go with the active choice. Here you can decide the asset allocations in Corporate Bonds (C), Equity (E), or Government Securities (G). However, one can allocate a maximum of 75% towards the equities.
You also have the option of auto choice where the allocation of assets is done as per life stages in case you aren’t able to decide the right proportions on investments. If you are withdrawing from the NPS before the age of 60 years you will only be able to withdraw 20% of the collected corpus. You should compulsorily annuities rest 80% of the corpus.
If you make a withdrawal at the age of 60 years or more, you can take out 60% of the corpus. The rest 40% compulsorily has to get used through an annuity plan. You can open the NPS account through the bank from where you can get NRE or NRO account as per convenience.
Moreover, a pension from the NPS gets paid in Indian Rupees.
As NRI you can consider your investments for equity, in case you are becoming aggressive investors, and ready or taking risks in the stock market. The NRI investment in the stock market comes under PINS (Portfolio Investment Scheme) of RBI. NRI must have NRO/NRE bank accounts and also a trading account for investing in the stock market in India.
One of the fields that are booming in India is Real Estate. The prices of real estate in cities like Pune, Bengaluru, Mumbai, and Delhi have been skyrocketing over the last ten years. NRIs purchase houses and give them out for rent in India. There are several options to select from villas, apartments, and developed plots among others.
You have to carefully analyze the risk profile and requirements before deciding on investing in real estate in India.
It can be a good option as India is expecting to see a huge development in the next five years. However, keep in mind that NRIs won’t be able to invest in plantations and agricultural land in India.
Rurash is one of the best wealth management companies to turn to if you’re an NRI pondering over the idea of investing in wealth-generating assets in India. The process might feel overwhelming which Rurash can help a lot with. For instance, financial concierge services can turn out to be of great assistance for NRIs.
As NRIs, investments in the Indian market don’t have to be a tough task. Presently we are in a post-pandemic global process and the investments have moved swiftly towards online modes. This has offered investors transactional ease across borders. The Indian Market is offering their potential and grit, and it’s time for NRIs to make an informed decision on if they would like to benefit from the country’s future potential.
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