Are you an NRI looking for best investment options to invest in India ?

Do you also think if an NRI can invest in mutual funds in India or can an NRI invest in NPS or post office ?

This article will answer all your questions related to NRI investment in India.

If you want to know more NRI investment options, then you can contact us.


We have listed some of the popular NRI investment options below.


1. Fixed Deposit

This is probably the most common form of NRI investment in India. The money plus the interest is paid out to you at maturity.

Three Types of Fixed Deposit Accounts

There are three main types of fixed deposit accounts that serve as NRI investment options in India:

  • Non-Resident External Account (NRE) – The money of such an account is kept in rupees. It’s easy to return the money to dollars. Interest rates on these accounts vary depending on the deposit size and/or bank. You can expect interest rates to be around 7% to 9% per year.
  • Non-Resident Ordinary Account (NRO) – This account type is generally used by NRI’s to control their Indian income. Rent income, dividends from investments, or pension funds can be paid into these accounts. Take note the interest earned on an NRO fixed deposit is taxed at a rate of 30%.
  • Foreign Currency Non-Resident (FCNR) – Foreign currencies are stored in these accounts. It helps to avoid the currency fluctuations that take place in financial markets. You can take money from this account at any time and it is not taxed by the Indian government.

2. Mutual Funds

An NRI investment in mutual funds needs an NRE, NRO, or FCNR account in India to be able to invest in an Indian mutual fund. These accounts help to facilitate the investment and payout process.

Here are eight mutual fund houses that accept investments from the U.S.:

3. Direct Equity

You can always invest your money into stocks on the National Stock Exchange of India Ltd. (NSE) if you feel you have enough knowledge. You will need to be part of the Portfolio Investment Scheme (PINS) of the Reserve Bank of India (RBI). This will allow you to trade stocks on the NSE.

You will need the following three things:

  1. An NRE/NRO savings account dedicated only for your PIS purposes.
  2. A dematerialized account that holds shares in an electronic form.
  3. A SEBI trading account with a registered broker.

4. Real Estate

Investing in a property is one of the favorite NRI investment in India. It serves as a good long term investment with steady growth (provided the property is in the right location). Make sure which type of bank account you use to buy and sell a property (NRO, NRE, or FCNR). 

5. National Pension Scheme (NPS)

This pension scheme allows Indian citizens to save for retirement. You need to be between the ages of 18 and 60 to become a member of the NPS. An NPS is not exempt from tax. The capital gains aren’t taxed, but all payouts are taxed according to your tax slab (the tax bracket under which your Indian income is classified).

To invest in any of these instruments, you can contact Financial Friend. We are a complete Financial Planning firm.