Best investment options for NRI’s in India now

Best investment options for NRI’s in India now, NRI investments in India, NRI investment opportunities in IndiaBest investment options for NRI’s in India now

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In the last few years, there is huge increase in investment opportunities for NRIs and Persons of India origin (PIO). Government of India has simplified rules and regulations applicable for NRI’s and encouraging them to invest in India.  NRI’s are showing greater interest in investing in India. What are the investment options for NRI’s in India now ? What are rules and regulations applicable for them ?

Investment options for NRI’s in India now

Before we jump in to investment options available, we need to know that an NRI can invest his money in India through two routes. One is “automatic route” where no approvals from Govt are required and another is “Government route” where an NRI need to take approvals from Govt. of India before making any such investment.

Also NRI investment opportunities would also specify whether it is repatriation (amount can be transferred to origin) or not repatriation.  

1) Investment in company shares and debentures: NRI’s can invest in shares and non convertible debentures of Indian companies through Portfolio Investment Scheme (PIS). PIS is a scheme of RBI. Once NRI opens this PIS account, he can buy or sell shares and debentures of Indian companies at designated stock exchanges. Currently there are various banks which are offering PIS accounts like ICICI Bank etc. However these investments have to be carried out as per FEMA guidelines. You need not apply for any fresh PAN card. Your existing PAN card would be sufficient to run the transactions of mutual funds or shares.

  • The securities in which NRI can invest through automatic route includes agricultural sector, mining, power, industrial explosives, hazardous chemicals, pharmaceuticals, transportation, insurance, non banking financial institutions etc. No RBI approvals are required to invest in these securities.
  • In some cases, the approval of FIPB (Foreign Investment Promotion Board) may be required. These include sectors like tea, infrastructure companies except telecom, media, courier services and single brand product retailing.
  • Investment by NRI is prohibited in sectors like Retail, atomic energy, chit fund companies, nidhi companies, lottery and gambling, tobacco and other sectors which are not opened to private sector investment. Investment by NRI is prohibited in sectors like Retail, atomic energy, chit fund companies, nidhi companies, lottery and gambling, tobacco and other sectors which are not opened to private sector investment.
  • You can look at best stocks to buy in India for 2013 to grow your investment in equity markets (Excluding the sectors prohibited for NRI’s).

2) Investment in mutual funds: Investment in mutual funds can be done by NRI’s only through NRI/NRO/FCNR account or through “inward remittance”. If you are looking for repatriation benefits, you should invest for at least 3 years period. However these investments have to be carried out as per FEMA guidelines. NRI’s can invest in top diversified mutual funds to benefit.

3) Investment in bank fixed deposits: NRI’s can deposit in bank fixed deposits at least for 3 year period if you are looking for repatriation benefits. However banks allow such deposits to be opened through FCNRB (Foreign currency Non-Resident Bank account). These accounts are maintained in US dollars, Pounds sterling etc. The funds in this account can be repatriated. Below are the best interest rates available currently for NRI’s.

  • Development credit bank – 9.25% p.a.
  • ING Vysya bank                – 9.75% p.a.
  • OBC                                – 9.10% p.a.
  • Canara Bank                    – 9.05% p.a.
  • Deutsche Bank                 – 9.00% p.a.
  • SBH                                 – 8.75% p.a.
  • Kotak Bank                      – 8.75% p.a.

4) Investment in real estate: NRI’s can invest in residential and commercial properties without any approvals. However they cannot invest in agricultural lands or plantations.

5) Investment in Post office schemes: NRI’s CANNOT invest in any of the Indian post office schemes directly. However, they can open a joint account with a second person who is living in India and they can invest in a few post office schemes.

6) Investment in Bonds / Government securities: Investment in government securities or bonds is freely permitted to NRI’s.  Such investment should be done for at least 3 years period. If such investments are purchased from NRE/FCNR account, the maturity proceeds can be repatriated. If purchased from NRO account, the maturity is credited to NRO account only and cannot be repatriated.

7) Investment in proprietary/partnership firms: NRI’s are permitted to make direct investment in proprietary concerns and partnership firms. However income through these cannot be repatriated outside India.

Conclusion: Though there are various investment options for NRI’s. However they may not be suitable for every NRI. Choose the best options suitable for you to maximize your returns.

Readers, I would like your comments and feedback on this article.

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Best investment options for NRI’s in India now

Note: Since the NRI investments are subject to foreign exchange rules and regulations and some of them fall under purview of FEMA guidelines, NRI’s are adviced to take help from professionals who are well versed with these guidelines. Though your investment options may not change, you need to be clear about the formalities to be taken care before you invest in India. Happy investing NRI's :-)


Article by Suresh

Suresh KP i.e. me have written 500+ articles on this blog. I love doing analysis and identifying the Best investment options.


  1. sampath says:

    I am a overseas citizen of India (OCI) in Australia.
    I read through the information on the type of markets. Although it mentions about sectors that I could possibly invest, not sure if OCI can invest in here. Is OCI treated same as PIO?

    Am I allowed to invest in Indian stock market?

    If possible what are the possible channels through which I could invest- ICICI / Axis bank / through RBI?
    Could you please point to the right documentation that is required to start the process?

    • Suresh KP says:

      You would fall under NRI category and you can very much invest in Indian stock market. You can approach or or any other stock broker, you can help you to open demat / mutual fund account

  2. saurav says:


    I am an NRI and i want to invest in indian stock markets. So can i use my parents demat/trading account for investing in stock ? This way i don't have to pay high brokerage that are levied on NRIs by the brokerage firms as i have talked with icici and they told brokerage is 1.24% which is very high compared to my parent's brokerage which is around 0.4%.

  3. nikhil says:

    I am already investing in the stock market with Sharekhan demat AC and having stocks for long term perspective and want to hold all them. but I am going to US. can I continue my current holding or what steps I need to do?
    thanks Sir.

    • Suresh KP says:

      Nothing. You can just leave it in demat account

      • nikhil says:

        Thanks Sir for your reply.
        Can I add more stocks to my existing demate account online via my NRE or NRO A/c connected to demate AC or I will need to look for other low returns investment options like FD and RD. Also for mutual funds the existing connected SBI AC need to be converted to NRO or NRE to keep on investing by savings of US salary.

  4. manjeet says:

    How can NRI buy bonds in India?

    • Suresh KP says:

      Manjeet, Are you taking about Tax free bonds ? If yes, you can buy when they open for subscription (keep reading our blog which publishes as and when a tax free bond opens) or thru stock market directly. If your question is Non convertible debenture bonds, then it depends on company to company and check whether you are eligible for subscripition.

  5. manjeet says:

    Can NRI's buy Tax free bonds?

    • Suresh KP says:

      Manjeet, It depends on the company which is offering. Majority of them are offering tax free bonds where NRI’s too can invest

      • manjeet says:

        Thanks, Suresh. How can I buy tax free bonds in secondary market? I live in Canada and have significant amount in my HDFC NRO account that I would like to invest in tax free bonds.

        • Suresh KP says:

          You need to have demat account. Visit “tax free bonds” section and you can purchase them during stock market hours.

          • manjeet says:

            Suresh, HDFCSecurities tells me that residents of USA and Canda are not allowed to open trading account in India. If that's the case, how can US and Canada NRI's participate in India's secondary market?

          • Suresh KP says:

            Manjeet, Lools there is confusion. Residents of USA/Canada are not eligible, however “NRI’s are eligible. Pls get this clarification. 

  6. alagappan says:

    i am pio i need to invest 1 crore rupees which is the best option please advice

    • Suresh says:

      Alagappan, There are several investment options available. It depends on your risk appetite. If you are low risk appetite person, open an NRE account and do a FD. You would get tax free returns of 9% which is zero risk. Pls let me know in case you are moderate risk to high risk investor ?

  7. Ravi says:

    Hi , Great Article. 

    Can you please let me know if NRIs can invest in chit funds

  8. Tanmoy Banerjee says:

    Pls advice on investment to be made by an India born NRI who is presently an US Citizen planning to invest in Indian Stocks & Mutual Funds.

    • Suresh says:

      Tanmoy, Yes NRI’s can invest in stocks and mutual funds. Due to stock market volatility, you need to be little careful in choosing winning stocks. Regd MF’s, you can invest in variety of funds like Birla SL Gen Next, Birla SL Frontline, ICICI Pru focussed bluechip fund etc,

  9. PSR says:

    hi Suresh,

    I opened an NRE Edge a/c in ICICI bank and am planning to invest around 50,000$ USD as a fixed depost for 3 yrs.  Now with the rupee falling, I am worried about the investment.  In US we have FDIC upto 100k$.  But in India we have only 1 lakh Rupee.

    NRE a/c have high interest rate compared to India.  But I am worried I may loose the whole money, in case something happens to the bank.  Is it advisable to invest in NRE account now?



    • Suresh says:

      Hi Sandhya, If you are so worried, please go ahead and invest in nationalised banks / Govt owned banks. They are offering interest rates inline with private banking. May be you may not have luxury of having good customer support, but that’s ok, some where you need to compromize. 

  10. Martin Mathew says:

    Dear Sir,

    I am a NRI working in Dubai last 6 years,

    i have  a 8  year old PPF A/C, can i continue this PPF A/C ?

     and also can i Purchase  new NSC  / MIS ? what about the existing MIS A/C ?

    is it mandatory to convert my Saving A/C to NRO ?








    • Suresh says:

      Martin, In 2013, Govt of India allowed NRI’s to continue any PPF account which they have opened when they were resident in India. Hence you can continue existing account. You cannot purchase any NSC or MIS schemes in post office as NRI. Existing MIS account can continue. Yes, you should convert your savings to NRO account. You would get several benefits which includes tax free Interest on FD etc.

  11. Mayilsamy says:

    Hi suresh,

    I am an NRI. I have a plan to invest in real estate in coimbatore. but i having a great confusion which is the best option to invest in apartments or land?


    Appreciate your suggestions




    • Suresh says:

      Mayilswamy, It would be difficult to say whether land or flat which one would appreicate. If would depend on several conditions like real estate market, the prices at the location which you are buying etc.,

    • Sundar says:

      Hi – I also had a similar situation a few months back and finally i decided to invest in land which i did….It was not necessary for me to invest in Apartment in Coimbatore and it was only meant for investment purpose. Currently the apartment prices are ranging from around 3500 / sqft and upwards in a decent locality and the rental income for a 2 BHK is hovering around Rs.8000-Rs.10000 month. If you want to invest in an apartment with Housing loan, which is currently at around 10.30% ROI, it might not be such beneficial as at the end of the loan term , you would ideally be paying twice the property value. Which means, your property should realise double the money after the loan period if you wish to sale…Big question? – Will the buyer be able to buy at that price for an old property or will he opt for the new one? Ideally the new one….On the contrary, if you wish to invest in a residential land which can most probably will fetch good returns after a few years than the returns apartment fetches….My take is Go for Investing in Land at Coimbatore in the current scenario, considering as a pure investment option…….

  12. Ashif says:

    Hi suresh,

    Good day to you, i am Ashif from Singapore,i am a NRI in Singapore since 2008,my base is Kerala,now i want to start a small business in India join with my another NRI friend, we are a technical specialist in semiconductor industry,we got the strong technical knowledge in this field,related with this our knowledge u got any ideas or projects?  

    please give me good ideas or projects,awaiting for ur favour reply….. 


    Thanks and Regards,

    K.Ashif meeran.

  13. Pradeep says:

    Hi Suresh,

    Lovely article – just what i wanted when I am starting to build up my NRI portfolio :-)

    By the way, how does this change with the current scenario of rupee just starting to appreciate?

    Please note that i had been advised about products when "rupee is falling" – but now, with "rupee appreciating" those products will not be advisable any more, isnt it? (ex, IT sector)

    I am looing for some good MFs in this "rupee appreciating" scenario.

    Should i still go for IT, Pharma sectorial MFs which rely on exports?

    Also, is this a good time to take up a debt oriented MF?

    Any help will be much appreciated!

    thanks in advance :)


    • Suresh says:

      Pradeep, IT, Pharma, FMCG are sector based funds and are high risk high return investments. If you are still looking to invest, you can invest in Reliance Pharma fund or SBI FMCG Fund. But invest major amounts in large cap and diverisifed funds. These would give good benefit in long term. Debt funds has been taking beating for the last 2 to 3 years as FII’s are pulling out the money from India. Though this could be a temporary scenario for some time, you can invest in debt mutual funds. 

  14. Peter Paul says:

    Thanks for sharing a good piece of informations. All the options are very reliable for investments and I think investment in real estates is one of the best investment option for NRIs. Theseare well suitable for NRIs and by investing in these investment options they will get a best return oppurtunities.

  15. Alavudeen says:

    Dear Mr.Suresh,

    I am an NRI working in Oman.Kindly advice me on investing of around 6 lacks for short term basis.

    thanks and regards,



    • Suresh says:

      Alavudeen, Currently markets are volatile, hence invest in debt mutual funds or bank FD only. In case you are doing any SIP in future, you can invest in diversified mutual funds or large cap mutual funds for long rn

  16. gope says:

    Hi Suresh

    Thanks for your wonderfull service. pls advice me to invest to achive the goals

    1) some porttion for my daughter education ( she is 3 now)

    2) some for my retirement monthly income ( i am in early 40)

    3) some to invest with moderate risk

    pls let me know for all these 3 which are the best option and how many % to allocate each



    • Suresh says:

      Gope, If you want to achieve financial goals, you should compute the future value ofgoal based on current value, inflation and tenure. Based on this you should plan apropriate investment option and the amount to be invested per month. Please see “Premium services” section where we educate investors from this angle. Please see the PDF copy of financial where you would get some idea about the  process. 

  17. Hi Suresh, I have one question about FCNR deposit. As an NRI, If you deposit in FCNR account, the bank doesn't return the original currecy after maturity, but only as DD or INR at the exchange rate offered by the bank. With this DD, how do one get the amount in the same currency he deposited? 

    • Suresh says:

      Abeesh, You might be referring to Dollar accounts. As per my knowledge, Indian banks offer fixed deposits in INR only. 

      • For NRIs, we can keep the amount in the Indian banks in the form of USD, CAD, GBP, Yen, etc by opening an FCNR account. But at the end of the term, you get the original currency with interest either in the form of DD or INR after the exchange rate offered by banks which is not in par with private exchange dealers


    I am Australian Citizen having Indian status OCI (Overseas Citizen of India).

    Dear Mr. Suresh,

    I wish to invest more than 2 crore Indian Rupees in India.

    Please give me idea which will be the best reliable investment.

    Please provide me your telephone contact so that I can contact you directly and ask few questions in the above matter

    Thanks and Best Regards

    Amratlal Khatri


    • Suresh says:

      Hi Amratlal, As an NRI, you can invest in mutual funds or bank FD’s (through NRE account). Mutual funds are subject to market risk, hence you can opt for debt mutual funds for lumpsum investments. You can write me to in case of any further queries. I would be glad to help you.

      • AMRATLAL KHATRI says:

        Dear Suresh,

        Thanks for your prompt reply.

        I need your telephone contact to discuss further.

        Please provide me your telephone number/s.

        Thanks and Best Regards


    • Satish SL says:

      Hi Mr.Amratlal,

                           You can invest in the field of educational inistitute via a educational trust.

  19. mukesh das says:

    Hi, Sir, I am Nri , work in africa . I wants to know my salary is arround 50,000 NRI , i have wife in india , & one doughter of one year . i save also arround 50,000 to 75,000 rupees per months . but we not soure  how many year our job will go here . due to private job . but our work is good with our company . So please suggest us how to save money for future & how to invest for future . i have Nri acc in india .

    • Suresh says:

      Hi Mukesh, You should invest in multiple investment options. Based on your risk appetite, you can invest in stocks, mutual funds, bank fixed deposits and other investment options for portfolio diversification. If you are interested you can try our premium services too to get specific plans which may suit you based on your age, risk appetite and financial goals. 

  20. Aamir says:

    Hi, thanks for your valuable advise.

    I am a NRI working in Gulf, I want to invest 50K INR per month, can you suggest me some good investment options with high returns and withut any risk.

    • Suresh says:

      If you are looking for zero risk monthly investment, invest in Bank RD. If you can take low risk, you can invest in debt mutual fund through SIP. For moderat risk, you can invest in diverisifed mutual funds or balanced mutual funds

  21. Pratham patel says:

    Dear Suresh,

    I am working at Gulf country. I want to invest my money in NRE fix deposite. My question: Is there any tax applicable on interest if i invest 5.5 Lacs in NRE FD?


    • Suresh says:

      Pratham, As per my knowledge, interest earned in NRE account is tax free. If you already have an account with any Indian bank, call their toll free number and verify before investing. All the best.

  22. RameshL says:

    I think NRIs can invest in agricultural lands and plantations but only Non-Indian citizens (Person of Indian Origin or Overseas Citizen of India) cannot invest. A distinction needs to be made between Non Resident Indians and foreigners. 

    Many of the IRFC, HUDCO, IIFCL, PFC AND REC tax free bonds have special restrictions for NRIs in general and those in USA particularly. 

  23. Sundar says:

    Hi Suresh,

    I am an NRI and currently owing two residential apartments in Blore. Recently through my friend, there was an option to invest in new apartment in Coimbatore with an all inclusive cost of Rs.3600 / Sqft with the annual possible rental income of Rs.96,000. Due to other commitments, if i had to invest in this property, i need to opt for a Housing loan of 10.30%, which they confirmed to approve for 80% of the Property value. I made a financial calculation with the assumption that if i were to invest the monthly EMI into a simple FD with a bank with reivestment option, and after deduction of the applicable TDS (at 10%), and the corpus amount at the end of the 15 year comes ( which is the loan period if i had to choose the housing loan) is divided by the Sqft comes to Rs.10,652. which means the property value per sqft should grow minimum to Rs.10,652 at the end of 15 years ( which is 196% growth) to be at par with the investment in FD.

    My question is:

    1. Is is really a worth to invest in apartment in Coimbatore which can grow 196% over 15 years? ( There is no necessity as i have already two apartments).

    2. Investment in FD is safe and secure and more liquid as against the investment in apartment.

    3. Would it be a best option to invest in Residential land in Comibatore?.

    4. What are the other alternative options to invest in India? May be a balance investment? Partial investment in Gold, Mutual Funds and FD?.

    Pls. suggest the best option..



    • Suresh says:

      Sundar, It would be difficult for me to comment whether it is a best investment to invest in apartment in coimbatore. I can tell only one thing is real estate prices are going up and would go up in future too. Your expectation of 200% jump in real estate price can be there in specific locations, but may not be at all. You need to be little cautious before you invest. Also do not compare real estate investment with bank FD. They are two different options and one is not comparable with others. If you are looking for long term investments other than real estate, invest in top mutual funds, Gold ETF’s and small portion in bank FD’s

  24. Shankar says:

    Dear Suresh,

    Very impressed with your advice on NRI investment options.  Could you kindly suggest some advice for me. I'm an NRI at present and would like to settle in India (preferably chennai) by end of this year.

    I will be getting around 10-15 Lakhs as part of my final settlement. I would like to invest those money (risk free investment) so that it can fetch me 20-25k per month.

    Awaiting your valuable advice.


    • Suresh says:

      Shankar, you are looking for safe and risk free investment. In such case you should go for Bank FD, company FD (with good rating) or debt mutual funds or Post office MIS scheme. All these investment options fetch 8% to 11% interest rates. You would get Rs 10K to Rs 14K based on these investment options.

  25. Swati says:

    Hi Suresh,

    I am an NRI.would like to invest a small amt in recurring deposit..100$ or so every month. What do you advise? Do I need to open and NRI acct,is it taxable,do I declare it in US tax filing?How do I transfer the money every month?Thanks…

    • Suresh says:

      Hi Swati, Severla Banks are offering RD schemes for NRI’s. Pls discuss with one of the bank which is offering highest interest rates and open an RD account. Interest on FD / RD should be treated like any other income and necessary income tax would be applicable. I am not aware of US tax filing, you can consult an auditor in US. You can transfer the money by online and I do not see any issue here.

  26. muthur says:

    You have mentioned that NRIs can invest in Post Office Savings Schemes. But as per Post Office Savings Bank Rules NRIs can not invest in any of the Small Savings Schemes. Please clarify.

    • Suresh says:

      Muthur, Apologies, there was an error here. NRI’s CANNOT directly invest in post office schemes. They can open a joint account with a second person (spouse, parents or friends) etc. and invest in some of the post office schemes. I have correct the post. Thanks for pointing it out.

  27. CSB Rao says:

    Dear Mr. Suresh,

    I have been following your articles last few months and should say Iam quite impressed with your considered opinions.

    My son is an NRI, has recently purchased an apartment in Chennai with a Home Loan. Now, he intends to invest regular amounts, say around 20,000 every month, for 3 to 5 years, not high risk investments. Could you pls suggest how to proceed and where to place the funds?

    I value your suggestions.


    CSB Rao


    • Suresh says:

      Hi Rao, Since your son want to invest Rs 20,000 regularly, it would be good option to invest in largecap and diversified mutual funds through SIP. Please read our article Top-10 mutual funds to invest thru SIP to choose these funds. Investments in mutual funds carry moderate risk and if you are investing for long term of 5 to 10 years, it would provide good returns.

  28. rupika says:

    Hello Sure sh,

    V nice article. But, are you sure that NRI can invest in post office savings like NSC?????

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