Investing as an NRI| North Loop Official Blog
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15 Oct 2020

Investing as an NRI

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Introduction -

Foreign investments are a significant source of capital for the Indian economy. Plus, with the massive industrial developments over the last two decades, there has been a surge in foreign direct investment in India that has prompted many NRIs to consider the various investment options in the country. As India moves towards becoming a viable destination for investments and more conducive for business, let us look at the numerous options available to you as an NRI.

Best Investment Ideas India -

The best investment ideas India 2020 are as follows -

Fixed deposits - Fixed deposits are popular among both resident Indians as well as NRIs and offer fixed returns at low-risks. Therefore, as a non-resident Indian living overseas, you can consider bank FDs as one of the safest investment options in India. You can invest in FDs with your NRE or NRO account at high-interest rates. Generally, banks offer FDs at interest rates varying between 6 and 7%, but if you invest with us, you can get an high-interest rates (7.50% with North Loop). Fixed deposits are part of one of the best investment ideas in India as there are hardly any instances of banks defaulting on them. Moreover, they are suitable if you are risk-averse and require a consistent source of income.

Public Provident Fund (PPF) - These also come under safe investment options in India as they are a government-backed scheme with the current rate of return offered to be 8% p.a. Moreover, they come with a lock-in period of 15 years and are eligible for tax deduction under Section 80C of the Income Tax Act, 1961. This tax benefit becomes an inviting factor for investment and helps in the reduction of your overall tax liability. However, a point to remember here is that the maximum amount that you can invest in PPF is Rs.1.5 lakh per financial year.

National Pension Scheme (NPS) - Similar to Public Provident Funds, investing in NPS also helps in tax reduction. It provides benefits of up to Rs.1.5 lakh under Section 80C and Rs.50000 under Section 80CCD (IB) of the Income Tax Act, 1961. NPS offers an annual interest of around 12% to 14% and the amount accumulated at the time of maturity is tax-exempt. However, if you are an NRI, you can invest in NPS only if you are between 18 and 60 years of age. Also, you are required to have a PAN card, and a bank account in an NPS empanelled bank for KYC verification.

Equity - As an NRI, you can invest in the Indian stock market directly under the Portfolio Investment Scheme (PIS) of RBI. You can also diversify your portfolio and invest in equity online by opting for a digital investment platform like North Loop. You can sign up with us and invest online in the Indian stock market directly or take the help of our professional advisors. All you need is an NRE/NRO account and a Demat as well as trading account to begin investing. Equity is one of the best investment strategies in India for aggressive investors as it has the potential to give high returns. You can also invest in US stocks as an NRI by opening an account on a digital platform like North Loop. You can start investing by yourself or take the help of a skilled financial advisor. We offer quality customer service and a user-friendly interface for you to invest freely in the US stock market which has shown an impressive performance as compared to the returns from the Indian markets in the last 10 years. An investment in the S&P index has grown at an annual average rate of 17.11% (in rupee terms) in the past decade as compared to the Nifty 500 index returns of 15.46%.The stellar performance by the S&P 500 has also outclassed India’s Nifty 500 index in the last 10 years after accounting for the depreciation in the rupee.

Mutual funds - This gets considered as one of the best investment ideas in India for NRIs. You can invest in mutual funds through your NRE/NRO account and choose among a variety of fund houses present in India that accept investments from overseas. You can select the ones that align with your risk profile and financial goals. Moreover, mutual funds are capable of offering higher returns as compared to bank FDs. The rate of returns usually depends on the type of the fund such as equity, debt or hybrid funds. North Loop also allows you to invest in mutual funds online. You can use our app to invest and track the performance of your investments. Also, we recommend the best performing mutual funds in India based on your goals and allow you to review different schemes’ past performances and make decisions accordingly. All you have to do is download the app, sign up, and open an account to start investing.

Real estate investment in India - Real estate prices have been skyrocketing over the last decade in the major Indian cities and aiding in immense wealth growth for the investors. As an NRI, you can opt for real estate investment in India as it can fetch very high returns.

Invest in startups India - The startup culture in India is at its peak powered by funding from venture capitalists, angel investors and government programs. Most of the seed funding for these startups come from investments done through angel networks or references. As an NRI, you can also invest in startups India via various methods such as equity crowdfunding, banks, and angel networks in exchange for an equity stake in them. Also, a point to note is that all direct investments by NRIs in Indian companies get considered as domestic investments and not Foreign Direct Investment in India. That means all sales or maturity proceeds, in this case, cannot get repatriated outside and is similar to a domestic investment made by an Indian resident.

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Conclusion -

You can choose from a variety of options. However, before making your investment decision, you should analyse your requirements and risk profile.

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This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended be advice. You must obtain professional advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax, investment or other professional advice from North Loop or its affiliates. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date. All opinions expressed do not reflect the views of North Loop nor are endorsed by North Loop.