NRI investment options in India — NRE, NRO, mutual funds, real estate

Indians abroad have access to almost everything residents have — with extra paperwork, FEMA rules, and tax wrinkles. Here's the complete NRI investment landscape: what works, what doesn't, and how to optimise.

Account types you need first

NRE account (Non-Resident External)

• Holds foreign income (your USD salary, etc.)
• Fully repatriable — you can move money back to your country anytime
• NRE FD interest is tax-free in India (huge advantage)
• Currency: INR (gets converted on deposit)

NRO account (Non-Resident Ordinary)

• Holds Indian-source income (rent, dividends, FD interest from old accounts)
• Repatriation capped at $1 million per financial year
• Interest is taxable in India (TDS at 30% for NRIs)
• Required for Indian mutual fund SIPs

FCNR (B) account

• Holds foreign currency (USD, GBP, EUR, etc.) — no INR conversion
• FD only (not savings)
• Fully repatriable, tax-free in India
• Lower interest rate than INR FDs (typically 4–5% vs 6.5–7%)

The NRI investment menu

1. NRE Fixed Deposits — the default

Currently 6.50–7.20% (May 2026). Tax-free in India, fully repatriable. The simplest, safest NRI investment.

• SBI NRE 1Y: ~6.75%
• HDFC NRE 1Y: ~6.85%
• Small finance banks (Equitas, AU): up to 7.5%

Catch: tax-free in India, but check your country of residence. Some (US) tax NRE interest as global income.

2. Mutual Funds (via NRO/NRE account)

• Allowed in equity, debt, hybrid funds — same as residents
• US/Canada NRIs face FATCA restrictions — only some AMCs accept (Aditya Birla, ICICI Pru, L&T do; many don't)
• Equity LTCG 12.5% on gains over ₹1.25L
• Repatriation: from NRE-funded MFs, fully repatriable; from NRO-funded, $1M/year limit
• Need PAN + Indian bank + KYC complete

3. Real Estate

• Residential / commercial: allowed without restrictions
• Agricultural / plantation / farmhouse: NOT allowed (FEMA restriction)
• Funding: NRE / NRO / foreign remittance
• Repatriation on sale: Up to 2 properties' worth, with conditions
• Rental income: taxable in India, deposited to NRO

4. Direct Equity / Stocks

• Need PIS (Portfolio Investment Scheme) account at the bank
• Trading via Indian broker (Zerodha, ICICIDirect support NRI accounts)
• Same LTCG/STCG rules
• STT and other charges same as residents

5. PPF — restricted

NRIs cannot OPEN new PPF accounts. Existing PPF (opened while resident) can continue contributing till maturity but NOT extend after 15 years.

6. Sukanya Samriddhi — not allowed

Resident parent + resident girl child requirement.

7. NPS — allowed

NRI Tier 1 NPS account allowed with NRO/NRE account funding. Same equity exposure choices.

Tax in India for NRIs

What's taxable

• NRO account interest (TDS 30%)
• Rental income (TDS at slab rate)
• Capital gains on Indian assets
• Dividend income

What's exempt

• NRE account / FD interest
• FCNR FD interest
• Foreign-source income (salary abroad, foreign dividends)

Filing ITR as an NRI

• Required if Indian-source income (rent, FD interest, MF gains) exceeds ₹2.5L (basic exemption)
• Use ITR-2 (most common for NRIs)
• Report only Indian-source income in India
• Foreign-source income reported in your country of tax residence (avoid double tax via DTAA)

DTAA — avoiding double tax

India has Double Taxation Avoidance Agreements with most countries. Two methods:

• Exemption: Income taxed in only one country
• Credit: Pay tax in source country, get credit in residence country

File Form 10F in India if claiming DTAA benefit. Country-specific TRC (Tax Residency Certificate) needed.

Sending money to India — the cost game

Cheapest channels (mid-market markup):

• Wise / Revolut: 0.4–0.7%
• Remitly / Western Union: 0.5–1.5%
• Crypto P2P (USDT/USDC): 0.3–1% but legal grey area
• Indian banks (SBI, HDFC remittance): 2–4% (avoid)

For amounts > ₹50K, the markup difference is real money. Use our currency converter to see mid-market rate, then compare what your channel actually offers.

FAQs

Can I keep my old PPF as an NRI?

Yes, contributions allowed till maturity. After 15 years, account closes — can't extend like residents.

Are NRE deposits taxable in the US?

Yes, US taxes global income. NRE interest tax-free in India but reportable + taxable in the US. Use Form 1116 for credits if you've paid Indian tax.

Can I invest in US stocks via Indian broker?

Some brokers (Vested, INDmoney, Groww International) allow Indian residents to invest in US stocks. NRIs typically already have access via local US/UK brokerage.

What happens to my MFs if I become NRI?

Inform AMC of your changed residential status. Existing investments continue. New SIPs allowed via NRO/NRE. Some funds may restrict US/Canada NRIs (FATCA).