Indians have been
moving to foreign countries like the USA, UK, Canada and Singapore for decades
now. These foreign countries boast of having a very vibrant diaspora of Indian
communities who contribute comprehensively towards their economic growth. That
India is also rapidly emerging as an economic super-power is a known fact,
which is not hidden for the Non Resident Indians settled in these foreign
countries. It is because of this, that NRIs earing in foreign currencies like
dollars, pounds and euros are parking their earnings in Indian banks and
investments for years now. In fact, foreign investment in India has grown
rapidly since the 1990s and the NRIs have been equal contributors to India’s
growth story. As such, NRI wealth management has become an important part of
banking and investments. If you are an NRI looking for good investment options,
you can consider one of the following listed below.
NRE,
NRO or FCNR Fixed Deposits: NRIS can invest their money in any
of the following three types of accounts
·
Non Resident External (NRE) Account
·
Non Resident Ordinary (NRO) Account
·
Foreign Currency Non Resident bank
deposit (FCNR) account
The money held in the
NRE and NRO accounts can be maintained in Indian Rupees and can be accessed as
normal savings accounts, current accounts or term deposits. While NRE accounts
are great for those wanting to transfer their foreign income to Indian
accounts, the NRO accounts are ideal if you have any income in Indian currency,
such as rent, pension, and dividend etc., earned in India. The FCNR account is
one in which you can deposit your earnings in foreign currency and can be
jointly held with an Indian resident. While you must pay taxes on the principal
amount, the interest you earn on these accounts is not taxed.
Direct
equity: Another way to go about with NRI wealth management
is to invest in direct equity. Direct equity or stock market investment is for
anyone seeking higher returns. Stock markets are by nature, extremely complex
and one must consider the overall outlook and the associated risks carefully
before foraying into it. A good rule of thumb is to stay invested into the
market for a long term, in order to earn profits. It basically boils down on
your appetite for risks. Yes, the returns may seem attractive, but one must
always remember than the element of risk never really goes away. Therefore, it
is essential to study the present market situations carefully and take advice
from wealth management experts before foraying into direct equity investment.
Real
estate investments: Realty investment is usually at the
core of attraction in developing nations such as India. The REIT or Real Estate
Investment Trust is usually more liquid as compared to direct realty
investment. NRIs can easily invest in residential or commercial projects and do
not require any approvals for the same. However, they cannot purchase any land
for agricultural purposes. In the past few years, the Indian government has
been in favour of NRI wealth management and investment in India and has been
encouraging this community of Indians to invest in projects by simplifying
investment rules, particularly in the real estate sector.
Mutual
fund investments: Most mutual funds come with systematic
investment plans (SIPs) for NRIs. As such, NRIs can divide their total
investments into quarterly or monthly instalments. They can invest in mutual
funds on either a repatriable or a non-repatriable basis. Those looking to
invest on a repatriable basis must have either an NFRE or FCNR account with any
recognized, preferably nationalized Indian bank. The money set aside for
investment must be remitted through the common banking channels or from the
above mentioned accounts held by NRI investors.
Investments
in bonds or government securities: The Government
requires funds from time to time for its several infrastructure projects. Hence
it issues bonds for raising this money. NRI wealth management is boosted by investing
in these bonds or securities. NRIs who invest in bonds are considered as
lenders but do not hold any equity stake in the project or company for which
the government raises this money. NRIs, like any other Indian citizens, can
invest in government securities and bonds and earn fixed returns on the same.
Certificates
of Deposits: Another popular means of NRI wealth
management is subscribing to certificates of deposits. This can however only be
done on a repatriable basis. Certificates of deposits are essentially
non-negotiable money market instruments which are issued either in demat form
on as promissory notes. They yield a higher interest rate as opposed to regular
bank deposits. Certificates of deposits have shorter maturity periods, lasting
from 1 week to 1 year and are ideal for investors with short term financial
goals.
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