Money is the foremost driver for most Indians seeking employment overseas. The dollar earnings provide NRIs an opportunity to invest in India and in their adopted country. The Indian financial system offers a whole gamut of investment products with substantial benefits for non-resident Indians to park their funds.

When it comes to saving in their adopted countries, most economies also offer avenues for local investments, which NRIs can avail of. Typically, investment products vary to a small degree between countries, so let’s examine the investment portfolio the US has to offer:

Checking and Saving Accounts:
A newcomer would start off with a checking account to credit his first salary, earning a negligible 0.25% interest.
An upgrade to a salary account would earn him an interest of 5%, for which he would have to either maintain a minimum deposit or pay a fee. These accounts have to be maintained to meet short-term needs.

401(k) contributions:
Equivalent to the Employee Provident Fund in India, employees are required to part with 6% of their income to the fund, which is reciprocated by the employer with a similar amount. The employee’s contribution is subject to tax.

Investment in Shares and Mutual Funds
NRIs in the US can invest in shares of all listed companies and in mutual funds. The latter have a reservoir of assets in a number of currencies, so a well-diversified portfolio allows for balanced investments.

Investment in Real Estate
NRIs with plans of a long stay in the US qualify for investments in real estate, and loans on property are sanctioned based on the individual’s credit worthiness.

Investment options for NRIs in India :-

The array of products on the investment platter is open to both resident Indians and non-residents on the same terms. All it requires is a Permanent Account Number, NRI PAN Card issued by the Department of Income Tax which is quoted in all transactions.

• NRE/NRO Accounts:
  

Non resident Indians can deposit their income from overseas into a non-resident rupee account, and the income from local sources into a non-resident ordinary account. While the former is repatriable, funds in the NRO accounts are not open to repatriation. FCNR accounts can carry foreign currencies and funds from this account can also be transferred abroad.

• Shares and Mutual Funds
  

The vibrant Indian stock market is open to NRI investment under the general exemption category by the RBI. India has a dynamic corporate and government bond market, with interest rates being determined by market forces. NRIs can participate in the stock market through the Portfolio Investment Scheme through designated branches. Proceeds of sale from shares can be transferred to the NRO Demat account, and are not repatriable abroad

• Insurance:
  

NRIs can avail of the entire range of insurance policies in India for themselves and dependents in India. Risk cover is also extended to persons of Indian origin, though certain joint life insurance policies and term policies are not open to them. See - NRI Insurance Issues

• Real Estate:
  

With the exception of agricultural land, NRI investments in property are the most sought after. Both long term and short term gains can be made from property deals. The introduction of real estate mutual funds is another avenue which has been opened up to NRIs.

Why should NRIs invest in India?

While investments by NRIs in India provide for dependents back home, they also strengthen the emotional bonds with the motherland. An exposure to Indian currency helps meet commitments in India.

NRIs enjoy the added advantage of tax benefits on their investments and insurance policies in India. But what makes investment in India by NRIs a must is the rewards they earn on their funds – a pulsating economy on an average growth rate of 8-9% makes India a savings haven for NRIs.

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