Financial Planning for Non- Resident Indians (NRIs)
Opportunity India Desk
Sep 01, 2021 -
3 min read
NRIs who want to build a financial corpus back home will find several attractive savings and investment options. You can choose to park your money in savings accounts, fixed deposits, mutual funds and various other instruments in India. Securing deposits and building investments in the country is not only a matter of sentiment but also an intelligent way to multiply your wealth.
Are you an NRI wondering how to plan your finances back home? Allow us to help you with a financial planning blueprint.
Begin by opening the right savings account
The first step towards healthy financial planning is opening one or more savings bank accounts that allow the smooth transfer of funds. Without this account, you'll find it almost impossible to invest in other financial instruments or collect returns coming from them.
Here are the two most popular types of NRI savings account you can open:
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Non-Residential External (NRE) savings account |
Non-Residential Ordinary (NRO) savings account |
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If you want to transfer earnings from your current country of residence to India, you can do so using this account. |
If you earn income in India through rent, pension, dividends or anything else, an NRO account is where you deposit it. |
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The interest earned on funds lying in this account is entirely tax-free |
The interest earned here is taxable. |
If you’re wondering which one to pick, we recommend opening both. You can use the NRE account to transfer your earnings to India and the NRO to reinvest funds in high-yield financial instruments. What's more, you can now earn an interest rate of up to 6% on both types of NRI accounts if you open them with IndusInd Bank.
Not only does IndusInd Bank provide you best in class digital banking for NRI accounts, but you can also apply for one online. Click here to apply for an IndusInd Bank NRE savings account here and for NRO savings account here.
Opt for NRE and NRO fixed deposits
NRE and NRO FDs in India can offer a higher rate of interest. An FD is a flexible and zero-risk investment instrument that NRIs can use for both short-term and long-term purposes. Several NRIs also withdraw only the interest component of their FDs to fund monthly expenses or even pay their taxes. An IndusInd Bank NRE or NRO FD can help with this and more.
Invest in mutual funds
As an NRI, you can invest in mutual funds, which is a relatively safe and high return instrument. To do this, it's ideal to have an NRE or an NRO savings account. Once you have these accounts in place to collect the remittance of funds, get your KYC documents ready. These would include your passport, along with proof of current residential address.
The bottom line
In addition to these predominantly safe investments, NRIs can also invest in the share market depending on their risk appetite. For remittance of funds, NRI savings accounts come in handy here as well. Furthermore, you can dedicate your NRI savings account to achieve different goals, such as building an emergency corpus or retirement fund. Are you looking for all these NRI services under one roof? If yes, start by finding the right bank first.
