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6 BEST INVESTMENT STRATEGIES FOR NRIS

Personal Finance | Published on May 02nd 2016 | Comment(s) 0
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If you are an NRI, living abroad, chances are your accounts are swelling and you wish to invest your money in India. Along with a lucrative career abroad, you also have surplus capital that you can invest in India.

So, where should you invest? There are so many areas for you to invest in, if you really consider this idea.

The following are the strategies that you can adopt if you wish to rake in some neat profits while you are living abroad:

Parking Cash in Deposit Accounts

Many NRIs opt for parking surplus funds rather than considering asset allocation, simply because of increased returns. Parking cash in tax-free bank fixed deposit accounts is a lucrative deal. But before investing in fixed deposits, you have to understand that they have a lock-in/penalty for premature withdrawal. Make sure you are aware of the investment tenure so that you DON’T have to withdraw it before time. Asset allocation does help you minimize losses so you should ideally have assets such as deposits along with real estate, bonds, gold etc. to ensure that a part of your portfolio is less risky and your overall return remains good.

Mutual Funds

Many mutual fund houses here in India extend the opportunity to invest in Mutual funds to NRIs. Through these mutual funds, as an NRI you can invest money in bonds, securities and equities. The reason why mutual fund investments are becoming more and more popular is because the returns that you receive in case of long term investment, are tax free in India if the tenure is more than a year.

Stock Markets

All the top stock brokers in India offer demat facilities that provide opportunities to NRI’s to invest in markets directly through Portfolio Investment Schemes. All you need is a demat account for trading. The broker will assist you in opening a demat account and you will be able to trade on NSE and BSE through both repatriable and non-repatriable funds.

Government Securities and Bonds

Governments often use Securities and bonds to raise funds for their expenses. The reason why these securities are risk-free and safe is because it comes with the guarantee of the government. NRI’s can purchase them and get regular interest paid on them. The maturity period of such securities vary but you can be looking at anywhere between 2 years to 30 years.

Real Estate

Real estate investments mostly perform well and is in demand amongst NRIs all the time. It is an investment that rarely goes wrong. NRIs don’t even have financial limits when it comes to real estate investment. However there are some restrictions regarding the financial transactions (NRE, NRO or FCNR Accounts) that concern buying and selling properties.

Currency Hedging

The Rupee has been getting devalued against the dollar for a long time. True, it does pull itself up at times but majority of the times it is depreciating. This is also the case for the Rupee when pitted against Middle Eastern currencies. You can start reducing your expenses abroad and send more money to India. You can go a step further and apply for cheap loans and put the deposit in Indian banks For example if you apply for a loan that has an interest rate of 6.75% p.a., you can deposit that in an Indian bank and get interest of 9.5% p.a. That would mean there is a profit of 2.75%. Along with that if the rupee appreciates then you get a higher value.




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