nri mutual funds icici

Question 1

Can an NRI invest in ICICI mutual funds?

Accepted Answer

All NRIs can invest in ICICI mutual funds. However, With effect 08 Dec 2008 “US Persons and Persons of Canada” are not allowed to start any new investment, purchase, or switch in any scheme of ICICI Prudential Mutual Fund. However, they can hold their current investments with the maturity date.

Question 2

Can US NRI invest in mutual funds?

Accepted Answer

Generally, an NRI is allowed to invest in mutual funds like Indian residents. However, for the USA and Canadian residents, there are few restrictions. There are only a few fund houses that accept investments from NRIs based in the US and Canada

Question 3

Are mutual funds taxable for NRI?

Accepted Answer

Taxation for NRIs investing in Indian Mutual Funds is the same as taxation of resident Indians. The only difference is that for NRIs, there is a TDS of 15% for short term (< 1 year) and 10% for long term (> 1 year) in the case of Equities and a TDS of 30% for short term (< 3 years) and 20% post indexation benefit for long term (> 3 years) in case of Debt/Gold funds at the time of redemptions.

Question 4

How NRI can invest in direct mutual funds?

Accepted Answer

NRI can invest in mutual funds provided that they have an NRO or NRE account with an Indian bank since investment is allowed only in the local currency. Once the bank account is activated the NRI can invest in the direct mutual fund through any of the available channels like mobile apps or online.

Question 5

What happens to the mutual funds when you become NRI?

Accepted Answer

Any mutual fund held by an investor remains unchanged after the change in the residential status of the investor. Once an investor becomes an NRI for India, he/ she must ensure to:

Change the residential status to NRI and update the KYC details
Pay taxes as per the rules applicable to an NRI taxpayer

Lastly, many AMCs do not allow an NRI to purchase/ switch mutual funds. Hence it is important to update the KYC compliance.

Question 6

Can NRI buy SIP in India?

Accepted Answer

Yes, an NRI can invest in SIP under the condition of having an NRE or NRO account with an Indian bank as systematic Investment plans do not accept any currency other than the local one according to the regulations set by FEMA.

Question 7

What is the best investment for NRI in India?

Accepted Answer

There are several investment options for NRI in India like the ones for Indian residents, some of those options are:

Fix Deposit Bank Accounts: Providing interest better than interest on saving account balance
Mutual Funds: Invest in mutual funds after analyzing your financial goals
Direct Equity: An investor must gain a good understanding of the market before investing
Real Estate: A better investment option for long term investments
Bonds and Non-Convertible Debentures (NCDs): NCD is another option for NRIs who are looking for investments apart from mutual funds or the stock market.
Certificate of Deposit: These are basically short term investments for retail investors with fixed returns
National Pension Scheme (NPS): NPS is a retirement plan. The maturity benefits from an NPS are taxable.
Government Securities: Government securities are generally considered a low-risk investment.