NRI Investments FAQs

Below are the FAQs you must go through to know about general questions on Non Resident Indian(NRI) Investments

Can NRIs invest in Mutual Funds in India?

Yes, Non Resident Indians (NRI) and Persons of Indian Origin (PIO) can invest in Indian Mutual Funds on a full repatriation as well as non-repatriation basis.

NRIs need to fulfill all KYC and regulatory requirements before investing in Mutual Funds.

Does any country have given restrictions to NRIs for investing in Mutual Funds in India?

A few countries such as US and Canada have restricted investments by NRIs in Mutual Funds without relevant disclosures. Some AMCs do not accept mutual fund applications from NRIs in Canada and the USA.

Can NRI invest through SIP?

Yes, NRIs can invest through SIP.

Can NRI opt for both Growth or Dividend Option?

Yes, NRI can opt for both Growth & Dividend options while investing in Mutual Funds in India.

Can NRI repatriate the redemption proceeds from Mutual Funds whenever they want?

The redemption proceeds received in NRE/FCNR A/c can be repatriated. But it can not be repatriated from NRO A/c.

How many types of Bank A/c can an NRI open?

NRIs can choose from three major types of accounts. As an NRI in India, you can open an NRE (Non-Resident External) Account, NRO (Non-Resident Ordinary) Account and FCNR (Foreign Currency Non-Resident) Deposit Account.

What is NRE A/c?

An NRE(Non-Resident External) Account is a rupee-denominated account that NRIs can open. They can use the NRE account to deposit their foreign currency earnings. The advantage of an NRE account is that it has high liquidity and allows for full repatriation of funds from the account to the NRI’s country of residence when required.

Who can open NRE A/c?

An NRE account can be opened by an NRI, Person of Indian Origin(PIO) or a person who has become a non-resident under FEMA.

Can a Resident Power of Attorney holder open / close NRE A/c?

No

What is FCNR A/c and who can open it?

FCNR stands for Foreign Currency Non Resident Account. This is a kind of fixed deposit account opened for depositing income earned overseas. The account is held in foreign currency.

The account can be opened by Non-Resident Indians (NRI) and Overseas Corporate Bodies (OCB).

What is NRO A/c?

A Non-Resident Ordinary (NRO) Account is a popular way for many Non-Resident Indians (NRIs) to manage their deposits or income earned in India such as dividends, pension, rent, etc. This account allows you to receive funds in either Indian or foreign currency.

What is FEMA?

The Foreign Exchange Management Act (FEMA) is legislation which regulates the inflow and outflow of foreign exchange. The Central Government of India formulated the same to encourage external payments and across the border trades in India.

What are the investment procedures in Mutual Funds for NRI in India?

i. NRIs need to open NRE, NRO or FCNR A/c with Indian Bank.

ii. NRIs need to submit a Mutual Fund Application along with the KYC Documents.

iii. KYC documents include latest Photo, attested photocopy of Pancard, Passport, Address proof of Outside India and Bank Statement.

iv. NRI investors can select a POA holder to invest in his/her behalf. Signature of Investor and POA holder should be present in the document.

What are Mutual Fund regulations for NRI?

i. NRI investors need to complete the KYC process along with investment proposals.

ii. If payment is made by a Cheque or Demand Draft then Foreign inward remittance certificate or letter from the bank is required.

iii. At the time of Redemption TDS is applicable as per highest tax bracket and remaining sale procedure gets credit in Bank A/c. If the investment is non-repatriable investment then proceeds get credited to NRO A/c only.

iv. NRI can submit an income tax return and get a refund of the excess TDS amount paid.