Living away from your home country is difficult. As much as you love the new country you’re living in, India is always ‘home’. Now, when you think of investing your money, you know that investing in your home country is a good idea.
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India is making investments for NRIs easier and more lucrative, there are always plans and schemes that banks are coming up with so that NRIs can invest with as little trouble as possible. But if you’re wondering what a good investment option for NRIs is, we have the answer.
What are the Best Investment for NRIs in India?
India is considered an upcoming economic power. By 2025 India is expected to be the second-largest economy in the world as per a report by PwC. In other words, any investment in India will work out well for an NRI who is looking to invest.
If you were to look at NRI investment options in India, you’ll see option such as –
1. Direct Equity
Invest in the stock market directly by purchasing shares of companies. NRI deposits can diversify their portfolio with direct equity, offering good money investment ideas for potentially high returns. Stay informed about market trends to make the best investment decisions.
2. Mutual Funds
Mutual Funds are a valuable investment option for NRIs in India, excluding those in the USA and Canada who face specific restrictions on available schemes. These restrictions may require additional information during the purchase and, in some cases, during redemption.
NRIs can tailor their investments to their risk profiles by choosing from a variety of mutual funds, including equity funds, balanced funds, debt funds, liquid funds, and MIPs. Profits from non-equity funds sold within three years are considered short-term capital gains and are taxed at 30%. For non-equity funds held for over three years, they become long-term gains and are taxed at 20% after indexation.
Taxation in mutual funds for NRIs follows similar principles as for resident Indians, with the distinction that Tax is Deducted at Source (TDS) by Mutual Fund Companies. Detailed information on TDS and refund procedures can be found in our comprehensive post on the topic.
Well-managed Indian mutual funds offer the potential to outpace inflation over the long term, managed by experienced professionals, which reduces inherent risks compared to direct stock investments.
Various investment options are available, including Systematic Investment Plans (SIPs) for regular contributions and Systematic Withdrawal Plans (SWPs) for consistent withdrawals. NRIs with income in India can also explore Equity-linked savings schemes (ELSS) as a favoured tax-saving instrument.
3. Fixed Deposit
A safe and secure investment option, fixed deposits provide guaranteed returns over a specified tenure. For NRI deposits, fixed deposits are a reliable choice among good money investment ideas, offering a stable and risk-free avenue to grow wealth.
4. National Pension Scheme (NPS)
The National Pension Scheme (NPS) offers NRIs an attractive retirement savings avenue. NRIs can easily open NPS accounts with a PAN or Aadhaar card, linking them to their NRE or NRO accounts for convenience.
For those aged 18 to 60, an NPS account can be initiated through a Point of Presence (PoP) in India. You have the liberty to choose asset allocation, with automatic adjustments based on age if preferences aren’t specified.
Below 60:
- Minimum 80% must be annuitised, offering a pension, and only 20% is withdrawable.
- Total corpus less than Rs. 1,00,000 permits full withdrawal.
- Note that annuities and maturity amounts are taxable.
At 60 and above:
- Minimum 40% must be annuitised, allowing up to 60% withdrawal.
- Total corpus below Rs. 2,00,000 permits full withdrawal.
- Pension/annuity payments are in INR, so consider aligning your NPS account with your NRE/NRO account at the same bank.
However, assess other investment options if you’re concerned about NPS withdrawal rules, liquidity, and taxation. NPS suits NRIs planning to settle in India post-retirement, but it’s wise to evaluate your financial goals before committing.
5. Public Provident Fund (PPF)
PPF is a government-backed, long-term savings scheme offering tax-free returns. As one of the best ways to invest money for high returns in India for NRIs, PPF provides security and tax benefits, making it an attractive investment option for long-term financial planning.
6. Real Estate
Real estate investment involves buying, owning, and managing properties for potential appreciation or rental income. Considered a solid option among good money investment ideas, real estate provides NRI deposits with diversification and a tangible asset for potential long-term gains. Additionally, certain tax-free bonds in India for NRIs can complement real estate investment strategies.
If you Must Choose one Investment Option, what should an NRI Invest in?
According to recent data, the Real Estate market in India is poised for substantial growth, with a projected value of US$40.94 trillion by 2024. Within the real estate sector, Residential Real Estate stands as the dominant segment, expected to reach a market volume of US$35.47 trillion in 2024. Furthermore, this segment is forecasted to experience a steady annual growth rate of 4.19% from 2024 to 2028, ultimately reaching a market volume of US$48.24 trillion by the end of 2028. This represents a significant expansion in the Indian real estate industry, highlighting its promising trajectory in the coming years.
Which City in India is Best for NRI Investment?
Financially, however, this might not be the best thing to do. Yes, it’s true that price appreciation is different for different cities. In a city like Jaipur, appreciation is slower and in Delhi, your investment will appreciate much faster.
Read: Essential Legal Services for NRIs: A Comprehensive Run Guide
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However, there are a few cities that have seen interest grow (from February to August). These are:
- Mumbai 119% increased interest
- Bangalore 72% increased interest
- Pune 129% increased interest
- Chennai 74% increased interest
- Hyderabad 92% increased interest
Therefore if you’re looking to watch your investment appreciate and see a steady rise quickly, then it is better to go with cities like:
- Mumbai
- Delhi NCR
- Bangalore
- Chennai
- Ahmedabad
- Hyderabad
- Pune
These cities are metros, there are innumerable job options here and this is what drives people to migrate and come to these cities.
Who will Take Care of my Investment when I am not in India?
When you are looking for NRI investment options in India, you should not have to make decisions based on who will take care of your property when you’re away. This will greatly limit your options and hamper you from making the best investment your money can get.
When you work with a company like NoBroker, you can trust that your property is in safe hands. The Property Management for your Rental Home by NoBroker offers –
- Guaranteed rental income
- Free tenant search
- Tenant background verification check
- On time rent collection
- Periodic home maintenance
- Free rent agreement services
- Periodic home inspections
- On demand repairs
And the best part is, you get a dedicated Relationship Manager that you can connect with at any time. They will provide you with updates on your property so that you know everything that is happening and have nothing to worry about.
Is there any Benefit of Investing in Real Estate now in 2024?
If COVID has made us realise anything, it is that having a home is very important. We can see that people are changing their spending and investing habits, but their desire to own a home has only intensified. People have started using online portals such as NoBroker to find property, this has made looking for homes safer and contactless. Government policies like lowering interest rates and the repo rate have also helped people look at Real Estate as a very worthwhile investment option.
Read: Buying A Resale Home from NRIs
For NRIs the falling rate of the rupee has driven demand in the real estate sector, there are many affordable housing projects that are looked at as ideal an investment. So, in short, YES, there is a huge benefit to investing in Real Estate, even post the pandemic this sector will see growth.
Is there a Change in How Many NRIs are Looking to Invest?
There is a huge change in this number, the factors listed above have created a stir and at NoBroker itself we see that many more NRIs are looking to invest in Real Estate now than before. Here are the changes we see –
Interest from NRI customers has gone up by 254%
76% of NRI customers look to invest in residential properties.
From Which Countries are the NRI Investing?
NRIs from all over the world are making investments in Indian Real Estate now when we look at the data from NoBroker, we see that the largest chuck come from the United States (27%) followed by the United Arab Emirates (12%) and Singapore is not far behind (11%), the United Kingdom also has many NRI investors (9%).
Read: Best NRI Accounts in India 2024
How do I Start Looking for Real Estate Options as an NRI?
If you’re looking to invest in Indian real estate, you need to start by looking for a home to invest in, and with NoBroker you can do that from anywhere in the world. You can contact our team and they will help you with the entire process, from finding a home for you to finding a tenant for your home. Visit our website Nobroker.in to learn more.
If you’re an NRI looking for help with your property in India or looking to invest in property in India, just click below. Our experts will guide you through the process and you will have a seamless, worry-free experience.
1. What are some popular NRI investment plans in India?
Ans: Popular NRI investment plans in India include mutual funds, real estate, fixed deposits, and the National Pension System (NPS). These options cater to diverse financial goals and risk appetites for NRIs looking to grow their wealth in India
2. Can NRIs invest in a pension plan for NRI in India?
Ans: Yes, NRIs are allowed to invest in pension plans designed specifically for NRIs in India, ensuring financial security during retirement.
3. How is taxation different for NRI Mutual Fund Investment?
Ans: Taxation for NRI Mutual Fund Investment is similar to that for resident Indians, but NRIs should be aware of Tax Deducted at Source (TDS) by Mutual Fund Companies, which may apply to their investments.
Read: TDS on Sale of Property by NRI: Guide from Sale to Taxation
Extremely useful article that encapsulates perfectly the investment opportunities for NRIs in India. Thank you for all the relevant information.