Best Investment Options in India 2021: For the past two decades, India is rapidly evolving into an industrial center. On day-by-day, our country is attracting more and more foreign direct investment (FDI). Besides, these days we can see the maximum investment coming from NRIs in the Indian markets. And all this is happening because the Indian economy and government are providing enough stability and flexibility to investors. Not only is India favorable for business growth, but our economy is also equipped with a highly profitable financial market.
There was not a happy year for investment in the year of 2018 because it saw significant bleeding throughout the year. Nonetheless, a similar situation was seen in any other country around the world. However, if you take a look at that year of 2017 that year, you will find that there was a return of about 29% in the stock market of India, which was relatively higher than any other economy in the world.
Best Investments Options in India 2021
Financial markets are very subject to fluctuations. It goes without saying that you need to do end-to-end research before making your investment decision. However, whatever investment options you choose should always depend on your financial goals, need for liquidity, appetite for risk, and expected return.
In this article, we are going to share some of the best investment options for NRIs in India, which can provide them substantial returns based on their goals and needs.
Some of the Best Investments Options to Invest in India
Here, we are going to mention some best investments options in India where you can consider to invest if you are an NRI. So let’s take a look below.
- Fixed Deposit
Investing in Fixed Deposit is not only popular among residents in India but also an attractive investment plan for NRIs. Being an NRI, you can open your FD from your NRE, NRO, or FCNR Account. These are the three bank accounts that can open an NRI in India.
Anyway, how much interest rate will apply to your FD, it depends on the tenure of your deposit amount. In general, you can expect interest between 6 to 7% on the balance of your account. Apart from this, if you are a senior citizen, you will get the good fortune to earn a one percent additional interest. Apart from this, this investment option is suitable for risk investors because FD is a comparatively safe form of investment.
If you are an aggressive investor, then you can consider investing in listed equity in the Indian market. If you are an NRI, then you can invest directly under the Reserve Bank of India’s portfolio investment scheme (PINs).
As an NRI, in order to invest in the stock market in India, you must have a bank account (NRE or NRO account), a trading account (with SEBI registered stock broker), and a Demat account. However, the maximum amount of your investment in shares of an Indian company cannot exceed 10% of the paid up capital.
In addition, it should be noted that, in the form of NRI, you are not allowed intraday trading and short selling in India. This means that you must be the owner before selling the stock.
- Mutual Fund
These days, AMFI is working hard to promote mutual funds among the Indian population. Mutual Fund organizations take money from their investors and then invest in various financial assets. Mutual funds have a moderate risk because they are neither risky in the form of direct trading in stocks, nor are they risk-prone as FDs. In addition, mutual fund investments can be highly profitable. There are a number of schemes available for mutual funds which can be selected based on your risk appetite and financial aspirations.
Anyway, if you are a person living outside India, you can, unfortunately, face some limitations of investment in mutual funds in India due to some harsh FATCA regulations. You must have NRE or NRO account to invest in the Indian mutual fund industry. Apart from this, you have to invest in Indian Rupees and not in any foreign exchange.
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- Public Provident Fund (PPF)
A safer form of investment similar to FD is a Public Provident Fund. PPF is an investment option supported by the Government of India. Even if you are an NRI, you can still invest in PPF. However, there is a maximum limit of 1.5 lakh rupees in a financial year.
You can open your PPF account through the post office or through the branch of any nationalized bank in India. Although PPF comes with a lock-in period of 15 years, of course, it is more tax efficient than FD.
- National Pension Scheme (NPS)
If you are looking for any other tax-efficient investment option, you may also consider investing in NPS (National Pension Scheme). It’s also a cost-effective, easy-to-use and tax-efficient way to invest your money.
National Pension Scheme is an Indian government-sponsored pension system. If you invest in this tool, your entire capital is considered tax-free during maturity. Apart from this, you do not have to pay a sum of money to the government in the form of taxes on the amount you extract as a pension. If you are an NRI from the age of 18 to 60 years, you can open an NPS account to start the investment in this scheme.
- Real State
It is a fact that there are many NRIs who live abroad but want to buy their house in India. The Indian population is growing steadily and it is paving the way for the real estate business’s progress in the nation. Being an NRI, you can invest in house property in India, from which you can earn a great amount by giving it to a third party.
However, it should be noted that you only have to make any such purchase in Indian Rupees. Apart from this, you cannot buy agricultural land, farmhouse, and plantation in India. Nonetheless, there is no restriction on the acceptance of any such property or accept it as a gift.
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With this article, we had tried to share the information regarding the best investments for NRIs who are looking to invest in India. So, if they are planning to invest their savings in India from foreign, then they consider the options mentioned above. We hope so this article will be helpful for the NRIs who are looking to invest in India from abroad.