Here’s an insight into investment avenues for NRIs in the present market situation. For risk-averse investors, traditional fixed income products such as Foreign Currency Non Resident (FCNR) fixed deposits and Non Resident External (NRE) fixed deposits are the safest bet. While FCNR account can be opened in foreign currency, the NRE deposit account is maintained only in Indian rupee. It is advisable to invest in fixed deposits in INR as rupee is expected to appreciate in medium to long term.
“If someone wants to avoid currency risk then he may invest in FCNR account. Yield is higher then that prevailing in their home country,” says Mukesh Gupta, director of Wealthcare Securities. For starters, you can maintain your FCNR fixed deposit account for a minimum period of 12 months and upto a maximum period of 60 months. FCNR accounts are non-taxable in India.
Maneesh Kumar, head — wealth management solutions, ASK Wealth Advisors, however, believes that NRE deposits should be preferred in current times as it provides competitive yield as compared to any other debt options. “Recently, rates have been hiked and are very favourable for an investor,” he says. You can maintain an NRE fixed deposit for 1-10 years. Like FCNR account, NRE deposits are also non-taxable in India. Currently, the returns offered by banks on these deposits are around 6.5% to 7.5%