India has been developing exponentially into an industrial hub – attracting more and more FDI (foreign direct investment) each year. This trend is only set to increase in the upcoming years as NRIs are investing more in the Indian market. This is due to the flexibility and adequate stability provided to the investors by the Indian government and economy. Not only is the nation conducive for business growth, but the country’s economy is well-equipped with a profitable financial market.
Nevertheless, financial markets are subjected to frequent ups and downs. Hence, this goes without saying that an individual needs to undertake thorough research and make an informed decision. So, whatever investment options NRIs opt for, it must always depend on their financial goals, risk appetite, liquidity requirement, and expected returns.
Here are some of the best investment options for NRIs in 2019 –
[1] Fixed deposit
A fixed deposit is a popular investment option among non-resident Indians. It is considered the safest investment option, as there are hardly any chances of defaulting. Thus, you can open an NRI account fixed deposits.
The interest rate depends on the financial agency, deposit amount and the tenor set. Usually, NBFCs offer higher interest rates on higher amounts deposited for extended tenors. Senior citizens are offered a slightly higher interest rate, making it one of the top investment schemes for retirees to ensure financial stability.
The current interest rate on opening NRI account fixed deposit varies between 7.80% to 8.70%. An NRI can invest in a fixed deposit if he/she is risk-averse and expects substantial returns post maturity. They can opt for a Bajaj Finance Fixed Deposit to enjoy attractive interest rates as high as 8.85%.
[2] Mutual funds
Investing in mutual funds involves moderate risks. Neither is it as risky as investing in stock markets nor is it a safe investment avenue as fixed deposits are. Mutual funds can provide higher returns than other investment options including an NRI account fixed deposit.
There are numerous fund houses offering a plethora of funds to invest in. You can choose as per your risk appetite and financial portfolio. Remember, NRIs can only invest in mutual funds through their NRE and NRO accounts. The rate of returns here depends on the type of funds you invest in – debt, hybrid, or equity.
[3] PPF (Public Provident Fund)
One of the best schemes for saving money in case of NRIs is to invest in, PPF is also the most secure option being a government-backed scheme.
The current rate of returns of this smart investment option in India is around 8% per annum. PPF comes with 15 years of lock-in period. Besides, investing in public provident fund is also tax deductible under Section 80C of the Income Tax act.
[4] Equity
An NRI can consider investing in equities if he/she has a high risk appetite. NRIs can invest in Indian stock market under the PINS (portfolio investment scheme) of RBI.
It is mandatory to have NRE or NRO account, demat and trading account for NRIs to invest in the stock market. Besides, the nation’s stock markets have skyrocketed since 2019 general elections and are expecting to attract more FDIs in the near future.
[5] Real estate
Another investment option apart from NRI accounts fixed deposit, and mutual funds are to invest in real estate – a booming sector lately. Notably, the real estate prices of major Indian metropolis like Mumbai, Bangalore and Delhi have skyrocketed over the past few decades. Therefore, NRIs can purchase houses in India and let them out for rent. This will fetch them a handful sum of funds.
[6] Certificate of deposits
Certificate of deposits (CDs) are usually considered as a short-term investment option. It almost operates as a fixed deposit, but a CD holder can sell it. For that, you need to open a dematerialised or demat account to buy and sell certificates of deposits.
Investing in India is undoubtedly a smart option as the nation is expecting to witness significant economic growth over the next decades. These are a plethora of smart investment options in India to choose from. Investors need to analyse their requirements and risk appetite before investing in one of these schemes.
