Everything You Need To Know About Investment Plans For NRI

10-June-2021 |

The rapidly developing economy of India can translate into higher returns for investors living abroad. The fast-paced financial growth in India gives Non-Resident Indians (NRI) an opportunity to leverage higher interest rates, significant market returns and lower tax obligations as opposed to their counterparts in developed countries.

 

Follow our guide to understand things you need to consider before you invest as an NRI in India and explore the best investment plans for NRI investors through different asset classes and opportunities such as securities, ULIP policy and more.

 

Understanding Investing in India

In the event that an NRI wishes to invest his money in his motherland, it is important to understand how the financial system works in India. The country offers a wide range of investment options classified amongst different levels of risk and returns.

Due to the increasing financial inclusion and the expansion of the economy, returns in India tend to be usually higher than those abroad, giving NRI investors the opportunity to remain a part of the nation’s growth even while residing in a foreign country. A number of good investment options for NRI investors are available to help promote the inclusion of non-residents into the national economy.

Investments Options in India

Being a developing country, India has many lucrative investment options for the residents along with the NRIs. NRI investors can explore the following options to invest their money when looking for opportunities to benefit from the returns in their home country.

1. Real Estate

Real estate is one of the safest investments to make in the country. The rising population and rapid urbanisation have a lead property to become a highly sought after asset, not only for housing purposes but also as an investment. The ever-increasing demand for real estate owing to the scarcity of land is an important factor when considering investing in property. Historical returns over the long term in the real estate market have been good and reliable. 


2. Securities

 

The stock market has remained on an uptrend for the most part of its existence. The growing economy of India gives equity market large room for growth and has led the stock market to outperform every asset class in the last three decades repeatedly. The securities market are comprised of volatile investments and must be approached after comprehensive market analyses in order to avoid incurring losses.

 


3. Mutual Funds

 


 

Mutual funds are market-linked investments that are designed to invest into multiple assets at different levels of risk. This is done through a reservoir of investments generated from multiple investors that receive fractional ownership of a diverse portfolio. Mutual funds are a lucrative opportunity for NRI investors looking for moderate-risk investments, with the added advantage of a pre-planned diverse portfolio integrated into the investment.

NRI investors can also explore exchange-traded funds or ETFs, which are similar to active mutual funds in their composition; however, they tend to replicate the benchmark indices and thus returns are linked to return of underlying benchmark like NIFTY50 or BSE30.

4. Unit Linked Insurance Plans

A ULIP plan is another market-linked investment opportunity offering returns on money invested as a premium with the added benefit of combining life insurance with wealth-oriented investing. ULIP returns are at par with mutual funds and stocks while providing tax* benefits to the extent of premiums paid towards the ULIP insurance as well as the returns received upon the maturity of the policy (subject to certain conditions).

NRI investors interested in investment opportunities coupled with life cover can explore different options from Tata AIA Life Insurance.


5. Government Securities

G-Secs are instruments issued by the government in the form of treasury bills or bonds, offering low-risk and government-backed investment opportunities to investors looking to park their money into an investment that grows over time without jeopardising the corpus of the investor.

Government securities are risk-free options offering fixed and floating interest rates to investors with the flexibility of being traded in the market.


6. Fixed Deposits

 

Fixed deposits in Scheduled Banks are one of the safest forms of investments offered in India. They are low-risk, low-return options that can help build a corpus over time through long term compounding. Non-resident Indians can invest in fixed deposits with banks and corporations through a Non-Resident External Account (NRE), Non-Resident Ordinary (NRO) or a Foreign Currency Non-Resident Account (FCNR).

Fixed deposit rates in India are among the highest in the world; therefore, a term deposit with a financial or commercial institution in the country is a great investment opportunity for investors looking to develop a savings portfolio with low-risk exposure.

 

Conclusion

NRI investors are diverse people with different investment attitudes and separate financial goals. To get involved in an investment opportunity that suits your requirements, assess your financial situation and risk appetite before investing money in any form of instruments.

Investing for NRIs can be complicated with separate tax* obligations and management of foreign currency. Consult your financial advisor before investing anything from abroad to ensure that your hard-earned money stays protected.

Finally, analyse and compare different options before settling for an investment opportunity. In the increasingly complicated financial market, investing has become a complex process, so tread carefully, refer to our guide above and invest responsibly.


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Disclaimer

  • * Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you

  • IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER

  • THE LINKED INSURANCE PRODUCT DO NOT OFFER ANY LIQUIDITY DURING THE FIRST FIVE YEARS OF THE CONTRACT. THE POLICY HOLDER WILL NOT BE ABLE TO SURRENDER/WITHDRAW THE MONIES INVESTED IN LINKED INSURANCE PRODUCTS COMPLETELY OR PARTIALLY TILL THE END OF THE FIFTH YEAR.

  • Past performance is not indicative of future performance.

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  • Please make your own independent decision after consulting your financial or other professional advisor.

  • Insurance cover is available under the product.
  • The products are underwritten by Tata AIA Life Insurance Company Ltd.
  • The plans are not a guaranteed issuance plan and it will be subject to Company’s underwriting and acceptance.
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  • This blog is for information and illustrative purposes only and does not purport to any financial or investment services and do not offer or form part of any offer or recommendation. The information is not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.
  • Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.
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