Moving abroad brings many changes in the way you carry out day-to-day activities. While you adapt to the new life, your finances can continue to grow back home. You have the avenue to invest your Indian and foreign income in various lucrative investment instruments. The range of accessibility gives you ample scope to grow your savings. If this seems exciting and you’re wondering how to go about it, this blog is for you.
Why build wealth in India?
Once you’ve settled overseas, you may start looking at India through a new lens. It’s worth exploring the potential you see as an NRI, as it links to:
- Meeting long-term financial goals
India’s economy is steadily growing with strong potential, which means you have the chance to explore long-term growth opportunities and aim for steady returns.
- Diversified growth
You can balance safer investment avenues like fixed deposits with market-linked instruments, depending on your risk appetite, and expand your portfolio.
- Staying financially connected to home
Beyond returns, investing in India helps you continue banking operations in a familiar framework through an NRO account and an NRE account.
Investment options NRIs can explore in India
Once you see the value of building wealth in India, you can leverage your NRO and NRE accounts to connect to these investment avenues seamlessly:
- NRI fixed deposits
If you prefer predictable returns, NRI fixed deposits are a simple option. You can invest in them through your NRE account to grow your foreign income. Or, you can park your Indian income from an NRO account to earn steady interest.
- Mutual funds
Mutual funds give you exposure to market-linked assets without actively participating in them. A fund manager takes care of allocation. Your role is to start an SIP in mutual funds with varying risk levels and growth potential based on your understanding.
- Direct equity
If you’re knowledgeable about the market movements, investing in stocks can help you build your wealth over time. It requires a bit more attention to track the impact of market forces.
- Real estate
Property continues to be a sought-after choice for investment in India. You can either buy the property and let it appreciate in value over time or earn from rent periodically. You can deposit the rental income in an NRO account.
- ULIP plan
ULIP or Unit-Linked Insurance Plan combines investment and insurance together. A portion of the premium goes toward life insurance, while the remaining is invested in market-linked funds to grow your savings.
- Government-backed schemes
The Government of India offers bonds, Public Provident Fund (PPF), National Pension System (NPS), and government securities for NRIs to enjoy stable returns with lower risk.
Smart strategies to grow wealth steadily
Your investment choices and how you manage them over time influence your overall returns. Incorporate these simple habits in your investment approach to witness a noticeable difference:
- Stay consistent
If investing a surplus takes effort, you can invest in instalments. Enable auto-debit mandate on your NRE or NRO account to make consistent investment contributions.
- Split based on purpose
Whether it’s your long-term growth plans or short-term goals like building an emergency fund, divide investments based on a specific purpose. This helps keep them organised.
- Review, but be patient
Check in on how your investments are doing regularly, but don’t get alarmed by any short-term fluctuations, especially with market-linked financial instruments.
- Diversify smartly
While diversifying your portfolio is a good practice, you also don’t want to overdiversify. Invest in avenues you understand well and expand from there. Avoid trying every option available without understanding how they work.
- Have a clear exit plan
Know when and how to access funds from investments that don’t have a lock-in period. You can stay invested for the long term or redeem investments when they are in a good position.
Final words
Building wealth while you reside abroad is a smart way to capitalise on familiar markets. You can continue your existing investments and grow them further with potentially stronger earning power in foreign currency. Deposit your foreign income in an NRE account to seamlessly access various investment avenues through a single platform. Track the growth of your savings within the app to learn about your overall returns.
Laila Azzahra is a professional writer and blogger that loves to write about technology, business, entertainment, science, and health.