Investment Options In India For NRI
NRIs are given multiple of investment choices in India:
FCNR Accounts:
NRIs are allowable to open a foreign currency (FCNR) account which might be opened in 5 major currencies, viz., US Dollar, quid, mark, monetary unit, and Japanese Yen. These accounts are opened for periods starting from twelve months to three years. Accounts could also be opened with funds remitted from outside, existing NRE/ FCNR accounts, etc. Conversion to currency aside from the selected currency additionally allowable at the danger and price of the remitter. As per RBI guidelines, banks are absolved to provide interest on FCNR deposits below LIBOR rates, less twenty-five basis points for deposits between six months to at least one year, and LIBOR rates and fifty basis points for deposits over a year. NRI deposits like the FCNR will continue until the date at the shrunken rate of interest even once the account holder’s resident standing changes to an Indian resident.
RFC Accounts:
An individual resident in India will open, hold and maintain with a certified dealer in India, a Resident Foreign Currency (Domestic) Account, out of exchange noninheritable within the variety of currency notes, Banknotes, and traveler’s cheques from any of the sources like payment for services rendered abroad, as a reward, gift, services rendered or in settlement of any lawful obligation from someone not resident in India. These accounts will be control one by one or collectively within the names of eligible persons. Such accounts will be maintained within the variety of savings banks, current accounts, and term deposits.
Term deposit accounts:
Term deposits can be opened by remittances from abroad or by transfer of funds from existing NRE/FCNR/NRO/NRSR accounts of the same person with other banks in India or from other branches of the bank or by tendering foreign currency notes/travelers’ cheques brought by NRI’s during their visit to India.
Non-resident Non-repatriable Rupee Deposit Scheme:
These accounts will be opened by the approach of the transfer of funds from abroad or from existing NRE/FCNR accounts. Deposits amount ranges from six months to three years and therefore the deposits area unit maintained in Indian Rupees solely on a non-repatriable basis.
Non-Repatriable Deposit Accounts (NRO):
Any person or entity residing outside India is entitled to open an NRO account with an authorized dealer or an authorized bank for transactions conducted in Indian Rupees. Individuals or entities of Bangladeshi or Pakistani nationality or ownership require approval from the RBI. The local funds of an NRI viz, rent, dividend, interest, sale proceeds of securities, property, etc. can be credited to these accounts and balances can also be placed in term deposits. Incomes earned on investments done on a non-repatriable basis are to be credited to the NRO account. After completion of formalities, an eligible amount can be repatriated.
Special term deposit accounts:
These are reinvestment deposits. Interest earned on these deposits are added to the principal and compounded at quarterly intervals. The principal amount together with interest is repaid on the maturity of the deposit.
Cash certificates:
All conditions pertaining to Special Term deposits are applicable for Cash Certificate Deposits.
Thrift Deposit Scheme:
It is a recurring deposit scheme where fixed sums are deposited every month for a fixed period. Compound interest is payable at the same rates as applicable to other term deposits. A loan facility is also available.
Unit Deposit:
It is a fixed deposit scheme where you can withdraw your deposit to the extent of your need and leave the remaining amount undisturbed to earn your interest at the contracted rate.
Apart from these NRIs are permitted to make direct investments in proprietary/partnership concerns in India as also in shares/debentures of Indian companies. They are also permitted to make portfolio investments i.e. purchase of shares/debentures of Indian companies through stock exchanges in India. These facilities are granted both on repatriation and non-repatriation basis.
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