Investment Plans for NRIs in UAE

NRIs have a multitude of options available for investment in India. Being one of the fastest-growing economies, India can offer massive returns and growth opportunities. You may choose from a range of options available in life insurance, mutual funds, equities, fixed deposits (FDs), real estate, gold investments, and many more. Check out some of the most sought-after investment plans for NRIs in the UAE:

1. NRI investment options

   
   

   1. Direct Equity

      
      

      NRIs invest in the Indian stock market directly for higher returns associated with risk over the long term. NRI investors can purchase the shares of a company listed on the National Stock Exchange, Bombay Stock Exchange or both.

      
      

   2. Mutual Funds

      
      

      NRIs can also invest in mutual fund options, which extend to equity, debt, or hybrid fund investments and are managed by professional asset managers. Investment in mutual funds for NRIs can be more convenient and profitable over the long term.

      
      

   3. Real Estate

      
      

      NRIs can also invest in commercial and residential real estate properties in India and get higher returns in the long term. Investment in real estate is considered one of the best investment options for NRIs.

      
      

   4. National Pension Scheme

      
      

      The NPS is a long-term retirement savings scheme which allows individuals to contribute regularly towards their retirement savings while they are employed. It is regulated by the Pension Fund Regulatory and Development Authority (PFRDA) and is one of the best investment options for NRIs planning their retirementin India.

      
      
   
   

2. NRI investment options with low risks

   
   

   1. Savings/ Endowment Insurance Plans

      
      

      NRIs looking for investment options in India with low risk can consider investing in savings or endowment insurance policies, which offer the dual benefits of life insurance coverage for the entire tenure of the policy and a savings element. The plans provide a death benefit if the life assured passes away during the policy tenure. This helps the family meet the financial loss suffered and meet its financial goals. On the other hand, if the life assured survives the policy tenure, a maturity benefit is paid. This benefit creates a savings corpus that allows policyholders to plan for their financial goals. Persons of Indian Origin (PIOs) and Overseas Citizens of India (OCI) can use life insurance to ensure their loved ones in India stay financially secure

      
      

      Endowment assurance plans can also be offered as child plans or pension plans, which help you plan for specific goals.

      
      

   2. Money-back Insurance Plans

      
      

      Money-back insurance plans are like endowment plans but with a difference. Under these plans, the sum assured is usually paid in the form of instalments at specified intervals during the policy tenure. This payment is called the money-back benefit, and it creates liquidity under the policy. The death benefit remains undisturbed and is paid in full irrespective of the money-back benefits paid under the plan. On maturity, the remaining sum assured is paid.

      
      

      Money-back plans might be offered as participating plans which earn a bonus. The bonus additions help in enhancing the benefits of the policy and create a good corpus for your financial goals.

      
      

   3. Fixed Deposit

      
      

      NRIs can also park their funds in fixed deposits to earn interest. Fixed Deposit is ideal for conservative investors. NRIs can choose to invest in NRO Fixed Deposit accounts, NRE Fixed Deposit accounts or Foreign Currency Non-Resident (FCNR) Fixed Deposit.

      
      

   4. Public Provident Fund (PPF)

      
      

      PPF is a long-term savings scheme backed by the Indian government that offers fixed, guaranteed returns higher than regular savings accounts and tax benefits. NRIs planning for long-term financial goals such as their retirement or their children's education, can benefit from accumulation in PPF. The NRIs cannot open new PPF accounts but can continue their existing PPF accounts until maturity if any.

      
      

   5. Money Market Instruments

      
      

      Money Market Instruments are short-term financial instruments such as Commercial Papers, Treasury Bills, etc., involving lower risk and high liquidity. NRIs are to invest in these securities on a repatriable or non-repatriable basis.

      
      

   6. Perpetual or PSU (Public Sector Undertaking) Bonds

      
      

      Perpetual bonds are bonds which cannot be redeemable but offer steady interest pay-outs. They do not have a fixed maturity date but offer regular returns. PSU Bonds are bonds issued by Government enterprises offering fixed rates of interest and involve low risk. These bonds generally have a long-term maturity period.

      
      

   7. Sovereign Gold Bonds (SGBs)

      
      

      SGBs are government securities denominated in grams of gold. These bonds are a substitute for holding physical gold. The value of the SGBs is linked to the price of gold, and the cash benefit can be redeemed after the specified fixed tenure

      
      
   
   

3. NRI investment options for High Net Worth Individuals (HNIs) in India

   
   

   1. Portfolio Management Services (PMS)

      
      

      Portfolio Management Services is a professional financial management service offered by professional portfolio managers to HNIs. They manage the investment portfolio of the clients under the research team’s guidance. Portfolio management services can be related to stocks, debt, and other securities.

      
      

   2. Alternative Investment Funds

      
      

      AIFs are investment vehicles which collect funds from investors to invest the amounts in different asset classes such as private equity, real estate, hedge funds, etc. It is considered one of the best investment options for potential high returns.

      
      

   3. Start-ups

      
      

      NRIs can invest in early-stage companies with innovative business models and high growth potential to increase their returns. Investing in start-ups is a good option for HNI NRIs to gain from the growth of these start-ups.

      
      

   4. Fractional Ownership of Commercial Real Estate (CRE)

      
      

      Fractional ownership of CRE allows HNI investors to invest in high-value commercial properties with a limited amount of investment. It enables them to own a property partly and invest in India’s real estate sector.

      
      

   5. Infrastructure Investment Trust (INVITs)

      
      

      INVITs are investment vehicles which provide NRIs with an option to invest in developing infrastructure projects in India