NRI Investment in India: How NRI Can Invest & Top Investment Options

Updated on 26 Jun, 2025

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Living outside India has advantages, including higher incomes, global exposure, and career growth. However, many people wonder: “If NRIs (Non-Resident Indians) can invest in India, how can NRIs invest in India?”

The answer is a definite yes. NRI investment in India is not only possible but also increasingly encouraged by the Indian government and financial institutions.

India is a developing economy with many options for investing and securing the future for its citizens and the non-citizens who live abroad. Yes, you heard that right; even NRIs have many investment options.

Here, we will discuss the investment options available for NRIs in India and why NRI investment in India is significant.

Can an NRI Open and Maintain Bank Accounts in India?

As per the RBI’s guidelines, the following bank accounts can be opened and maintained by an NRI:

Non-Resident External Account (NRE)
Non-Resident Ordinary Account (NRO)
Foreign Currency Non-resident Account (FCNR)
Special Non-resident Rupee Account (SNRR)

Why Should an NRI Invest in India?

Retirement Planning: Early investments ensure a financially secure and comfortable retirement.
Diversification: Investing in India allows NRIs to diversify their portfolio geographically and across various asset classes, helping manage risk and balance returns.
Build Financial Assets: From fixed deposits to equities, the wide range of investment in India for NRIs ensures that every investor can find options suited to their goals and risk tolerance. These options can help you build long-term wealth.
Stay Connected: NRI investment in India is a meaningful way to stay financially and emotionally tied to your homeland.

Investment Options for NRIs in 2025

There are many options for NRI investment in India. NRIs can safely and securely invest in India and rest assured of a happy and hassle-free future.

Here is a list of 8 investment options for NRIs in India:

1. Fixed Deposit (FD) Bank Accounts

This is probably the most common and easy investment for NRIs in India. It is usually offered by both banking and non-banking financial companies. Here, you can deposit money for a fixed period of time for a higher rate of interest than in any other savings account.

The only drawback is that one can only withdraw the money when it matures. However, in certain circumstances, premature withdrawal is available at a penalty.

NRI investment in India in FD accounts has been categorised under three main types. These are:

NRE FD Account (Non-Resident External): Ideal for parking foreign income. Funds and interest are fully repatriable and tax-free in India.
NRO FD Account (Non-Resident Ordinary): Used to manage income earned in India, such as rent or dividends. Interest is taxable at 30%.
FCNR FD Account (Foreign Currency Non-Resident): Best for those who want to maintain their deposit in foreign currency, eliminating exchange rate risk. Returns and principal are repatriable.

2. Mutual Fund

Mutual funds are among the best investment options for NRI investors looking for professional fund management and diversification. They pool in money from many investors to purchase securities.

Mutual funds may carry higher risk compared to FDs because they invest in market-linked instruments like stocks and bonds, which can fluctuate in value. But this exposure to the market also gives them the potential to generate higher returns over time than the fixed interest offered by FDs.

NRIs can invest in a mutual fund by opening an NRE, NRO, or FCNR account in India.

The following are some of the agencies accepting investment by NRIs in India:

3. Real Estate

NRIs often feel secure and emotionally attached to owning a property in their motherland.

With the increasing prices of both commercial and residential properties in India, this has become one of the best investment options for NRIs. However, NRIs are barred from purchasing agricultural land and plantations in India unless the same is deemed to have been inherited or gifted.

4. Direct Equity

If you are wondering how can NRI invest in the Indian stock market, here’s how:

NRIs must invest through the Portfolio Investment Scheme (PIS) regulated by the RBI.
Open an NRE/NRO bank account, a demat account, and a trading account with a SEBI-registered broker.
The individual limit under PIS is 5% of a company’s paid-up capital. The overall cap for all NRIs is 10%, extendable to 24% with a company resolution.

5. Bonds and Non-Convertible Debentures (NCD)

NCD is another option for NRIs who are looking for investments apart from mutual funds or the stock market. Corporations issue these and offer better returns than traditional FDs. Investments can be made via NRE or NRO accounts.

Bonds issued in India are either Public Sector Undertakings (PSU) Bonds or Perpetual Bonds. PSU bonds have a fixed maturity date, while perpetual bonds, on the other hand, have no specific maturity date. Hence, these can be treated as equity and not as debt. These bonds are considered a viable money-raising solution during economic crises.

6. Government Securities

NRIs also have the option of investing in Government Securities. The Reserve Bank of India (RBI) has initiated a separate medium known as the “Fully Accessible Route” (FAR) to enable NRIs to invest in specific Government securities (g-Sec) effective April 1st, 2020.

Government securities are generally considered a low-risk investment. Here, the government issues a bond or a debt obligation with a promise to repay upon its maturity. These either could be long term or short term investment.

Some examples include:

Fixed-rate bonds
Floating rate bonds
Capital Indexed Bonds (CPI-linked)

Additionally, can NRIs invest in Sovereign Gold Bonds (SGB)? As of now, NRIs are not permitted to buy fresh SGBs. However, they can hold SGBs if acquired when they were a resident.

7. Certificate of Deposits (CD)

NRIs can invest in a CD. Indian banks issue CDS for 7 days up to 1 year. CDs are negotiable instruments that guarantee repayment of the principal amount along with fixed returns. They are basically short-term investments for retail investors.

8. National Pension Scheme (NPS)

National Pension Scheme, or NPS, is a retirement plan. Any NRI between 18 and 60 can put money in NPS. The maturity benefits from an NPS are taxable, and the funds are taxable on withdrawal. There are two kinds of NPS accounts: Tier-I and Tier-2 accounts.

Conclusion

India is one of the fastest-developing countries in the world, attracting many NRIs to invest for a secure future. This is also one of the best ways for NRIs to stay connected with their motherland and help the Indian economy.

So, how NRIs can invest in India is no longer a mystery. With options ranging from mutual funds to government bonds, NRIs can confidently take charge of their financial future from anywhere in the world.

A wise decision now will not only help you secure your future but also ensure potential returns.

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