Start with the right bank accounts
- NRE account: for money you earn abroad. Balances and interest are freely repatriable, and the interest is tax-free in India.
- NRO account: for money you earn in India, like rent, dividends or a pension. Interest is taxable in India, and repatriation is capped (see below).
- FCNR deposits: fixed deposits held in foreign currency, so there’s no rupee risk while they run.
If you’ve become an NRI, tell your bank. Resident savings accounts need to be redesignated as NRO accounts.
Shares
To buy Indian shares directly you generally need a PIS (Portfolio Investment Scheme) set-up with your bank, linked to an NRE or NRO account, plus a demat and trading account with a broker that serves NRIs. There are limits on how much of a single company NRIs can hold in total, and some trading products have extra restrictions. Your broker will tell you what’s allowed.
Mutual funds
NRIs can invest in Indian mutual funds through an NRE or NRO account after completing KYC. If you live in the US or Canada, fewer fund houses accept you because of reporting rules (FATCA in the US). Several do, sometimes with extra declarations or offline paperwork. Check with the fund house before you start.
Fixed deposits and bonds
NRE and FCNR fixed deposits are simple and popular. Government and corporate bonds are open to NRIs with some limits.
Things NRIs generally can’t do
- Invest in small savings schemes such as new PPF accounts (existing ones have special rules).
- Buy agricultural land, plantations or farmhouses (see our property guide).
Getting money out
- NRE balances can be sent abroad freely.
- NRO balances can be repatriated up to USD 1 million per financial year (April to March), after tax, with the bank’s forms and usually a chartered accountant’s certificate.
Tax
India taxes income earned in India. Your country of residence may tax it too, and a tax treaty may give you credit. Capital gains on Indian shares and funds are taxed in India, and tax is often deducted at source for NRIs. Talk to a tax adviser in both countries, especially in the US where foreign mutual funds can be taxed harshly.
Avoid
- Anyone promising guaranteed returns.
- Sending money to personal accounts for “investment opportunities”.
- WhatsApp or Telegram tips groups.
Useful official sources: the Reserve Bank of India and SEBI.
General information only, not legal, tax or financial advice. Rules change. Check the official source or a qualified professional before you act.
