India’s economy is amongst the largest in the world on the basis of purchasing power parity (PPP). It is today one of the most attractive destinations for investment opportunities with the available large manpower base, diversified natural resources and strong macroeconomic fundamentals.
The Indian investment market offers a plethora of investment avenues. However the asset class that an investor chooses has to primarily do with the risk appetite of the investor. Every investor looks for a certain element of safety before investing -- a kind of assurance that even in the case of unfortunate market events s/he at least gets back the capital invested.
A higher level of safety comes with a 'cost': investors will have to compromise on the returns front, as one cannot expect higher safety with higher returns.
Returns offered by low risk investments will be low to moderate i.e. up to 9 per cent and in some cases the post-tax returns would be even lesser. It would hence be ideal if an investor can have a mix of asset classes with varying degrees of risk, to address safety and returns.
A consultant, unlike a broker, does more in-depth work on formulating clients' investment strategies, helping them fulfill their needs and goals. The idea behind a consultant is that they be part of the client's investment strategy for a long period of time. The investment consultant job is to actively monitor the client's investments and continue to work with the client as goals change over time.
Some of the major investment options for NRIs are:
The Indian investment market offers a plethora of investment avenues. However the asset class that an investor chooses has to primarily do with the risk appetite of the investor. Every investor looks for a certain element of safety before investing -- a kind of assurance that even in the case of unfortunate market events s/he at least gets back the capital invested.
A higher level of safety comes with a 'cost': investors will have to compromise on the returns front, as one cannot expect higher safety with higher returns.
Returns offered by low risk investments will be low to moderate i.e. up to 9 per cent and in some cases the post-tax returns would be even lesser. It would hence be ideal if an investor can have a mix of asset classes with varying degrees of risk, to address safety and returns.
Investment options in India for NRIs
If you're thinking about investing in India to make money especially into real estate, you need to first determine your financial goals. Do you need to make money quickly, invest for your children’s college fund, or build wealth for your retirement? Once you determine your financial goals, you need investment consultants who helps investors with their long-term investment planning.A consultant, unlike a broker, does more in-depth work on formulating clients' investment strategies, helping them fulfill their needs and goals. The idea behind a consultant is that they be part of the client's investment strategy for a long period of time. The investment consultant job is to actively monitor the client's investments and continue to work with the client as goals change over time.
Some of the major investment options for NRIs are:
Short-term avenues
- Savings bank account: This is the primary savings product that anyone would have; however it provides low returns of 4 to 5 per cent. Any funds in this account makes sense only if the balance is sufficient to cover needs that are supposed to arise within a month as it offers highest liquidity.
- Fixed deposit schemes (Bank FD): Bank FD comes with a fixed tenure of investment which acts like a lock in period. While early withdrawal is possible it entails a 'penalty'. It is essential to 'plan' this investment since it comes with a fixed tenure/lock in.
Long-term avenues
- Post office savings schemes: This is one of the favourite and most sought after among investors who believe in regular savings in the form of recurring deposits. There are other investment opportunities like National Savings Certificate, PO time deposit which are similar to FD and also offer tax benefit u/s 80 C if the tenure is 5 years.
- Public Provident Funds (PPF): PPF offers multiple benefits of good returns @ 8.8 per cent, low risk, tax free interest and tax benefit u/s 80 C. However liquidity in this avenue is low, as one can start withdrawing only from the seventh financial year onwards and has to adhere to certain limitations while withdrawing.
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