How NRI’s should plan their investments in India?

What a person can save in India in 5 yrs, many NRIs can do that in just 1 yr – which means that if an NRI plans well – he/she can do financially very well in 8-10 yrs and come back to India semi-retired or fully retired.

Are you one of the NRI’s who wants to know if you should invest your money in India and how to do it? Then this article is a good place to start with.

NRI’s earn well, spend well and in most cases also “save” a decent amount of money every month. Even if one some is saving $2,000 in USA it’s close to 1.5 lacs a month after all. So the first challenge is to “save” money while you are NRI and the second one is to invest it properly and manage it well, especially if you are have limited time in your hands as an NRI.

There are close to 3 crores NRI’s and PIO from India in different parts of the world, however, this post is mainly for those NRI investors who go out of India for 2-10 yrs and will mostly return back after few years of work.Generally, there is a perception that NRI’s make a lot of money outside India as they are paid in Dollars and Dirhams! While this is true in general, one can’t deny that their expenses are also high and their life out of India is challenging as it’s a different city, culture, and environment overall.

In this article, we are just going to do some conversation regarding the various options available to NRI’s for investments and why they should choose India for their investment purpose. I will not cover too many technical rules or aspects related to investments in this article and will keep it quite too the point.

Why NRI’s should invest in India?

Many NRIs are confused about this, so I will just give you small points which you should be aware about.

Should you be investing your money in the country where you are residing or in India? Does it make sense to earn and stay in the US or the Middle East, but invest all that money in India?

High-Interest Rates

Many NRI investors make the mistake of keeping too much money in the bank accounts outside India and earn very little interest rates.

Compared to many developed economies, the interest rates or “returns” you can get in India is quite good. Japan has negative interest rates and the US has not more than 2-3%.

India is one the fastest growing and a stable Economy

It’s important to make sure that your money is invested in the country which is stable enough. On top of that, you also help in growing the foreign exchange of your country.

Note that India is one of the fastest major economy and quite a stable country compared to many others where NRI’s live.

Mostly you will be back to India

I don’t mean to say that no investment products outside India are better than Indian financial products. There will surely be options which can be looked at, please do that in case you feel you want to.

A vast majority of NRIs return back to India after working for a few years outside and finally use all their investments back in India. That’s one strong reason why you should invest a major part of your money in India itself.

Because you understand the investments in India

Also, you will never fear what happens to your money because there is a sense of familiarity with India’s markets and financial ecosystem.

There is a high probability that you already understand various Indian investments options and financial products.

Which bank account to use – NRE or NRO?

A lot of NRI’s keep using their saving bank account for many years, without realizing that it’s illegal. The moment you become an NRI, one needs to convert their savings bank account to NRE or an NRO account. Or one can open a new NRE/NRO account if needed.

NRE account is a bank account where the money is full repatriable – which means that you will be able to take out all the money back from the NRE account and use it in a country where you are residing. It’s an account where you can deposit both your foreign and Indian income.

On the other hand, the NRO bank account is only partially repatriable and you can only deposit your Indian income in this account.


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