Amidst the threat of a global financial recession, the International Monetary Fund (IMF) has said that India is a bright star. India is one of the fastest growing economies in the world. Experts suggest that there is no better time to invest in India. For Non-Resident Indians (NRIs), there are many investment options and instruments for generating periodic income. They come with their own unique benefits. As the festive season approaches, it is considered a good time to make plans for investments.
Speaking about the best suitable investment option for NRI investors, Shiv Parekh, founder of HPITS, said that one’s investment depends on one’s investment goals, risk appetite and return expectations. “As far as mutual funds are concerned, it is suitable for those looking at long-term investments. Investors need to capitalize on the returns earned from mutual funds. NPS is considered a good investment if planning to settle in India. As far as post-retirement real estate is concerned, favorable policy interventions mean steady growth. And for the long term, this is the case. It will be a good investment option.” Said that.
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Here are five investment options for NRIs:
Real Estate: Real estate sector is seen as an attractive investment sector. It is on track to reach $1 trillion in market cap. Both residential and commercial real estate (CRE) remain a major investment option. Commercial properties grow by 5 to 10 percent depending on their location, so it can be a good investment option.
“More accessible instruments like REITs and fractional ownership have given a big boost to the CRE sector. These instruments have made the market accessible to retail investors. The rental yield of commercial property is 8%-10% per annum, which is higher than the yield of residential property,” said Parekh.
Mutual Funds:
Mutual funds are always recommended for those looking for long-term investments. Mutual funds offer a wide range of investment options from debt to equity. And carefully selected schemes can yield good returns. To invest in mutual funds, NRIs need an NRE or NRO account. Because in this they can only invest in Indian Rupees.
Ulip:
ULIP combines the benefits of investment and insurance with a common lock-in period of five years. However, premiums paid to ULIPs are deductible under Section 80C and 10(10D) of the Income Tax Act, 196.
NPS:
NPS is recommended as an investment only for those who aim to settle in India after retirement. As for government bonds, they are low-risk investments backed by the Indian government. Government bonds are tradable securities. Their prices are subject to fluctuation in the market based on external factors.
Biggest Deposit:
FDs, also known as fixed deposits, are a popular investment option not only among Indians but also among non-resident Indians. It is a risk-free investment and comes with different tenure options. It also allows flexibility apart from guaranteed income. NRIs can start investing in FDs through NRE, NRO or FCNR accounts. This will give them good income.
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