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In this policy, the investment risk in the investment portfolio is borne by the policyholder.
Kotak e-Invest
Features
Ref. No. KLI/22-23/E-BB/492
NRIs can invest in Indian mutual funds through NRE or NRO accounts, either directly or by granting Power of Attorney to a trusted individual in India.
Whether you are an Indian citizen or NRI, mutual funds attract you with their potential for growth, diversification benefits, and professional management. Mutual funds are a popular investment choice for NRIs. While they can indeed invest in these funds, understanding the specific details requires a careful read of the scheme information document. This blog provides a comprehensive guide on important questions like: can NRI invest in mutual funds in India?
Non-resident Indians (NRIs) can invest in mutual funds in India. The process is quite easy, but it does involve adhering to certain regulations set by the Foreign Exchange Management Act (FEMA) and completing the Know Your Customer (KYC) formalities. By doing so, NRIs can enjoy the benefits of India’s growing economy and potentially high returns from mutual fund investments.
If you are an NRI and are planning to invest in mutual funds in India, you should pay attention to the following steps:
The first step is to complete the KYC process. This is mandatory for all investors, including NRIs. You’ll need to submit your identity and address proof, along with a passport-sized photograph.
NRIs must have either an NRE (Non-Resident External) or NRO (Non-Resident Ordinary) bank account in India to invest in mutual funds. The choice between NRE and NRO depends on whether you want your funds to be repatriable (freely transferable abroad).
Next, choose the mutual fund scheme that aligns with your financial goals and risk appetite. Depending on your investment horizon and risk tolerance, you can invest in equity, debt, or hybrid funds.
Fill out the mutual fund application form. Ensure you mention your NRI status and provide details of your NRE/NRO account. You can do this either online or offline.
Transfer the investment amount from your NRE/NRO account to the mutual fund’s account. You can opt for a lump sum investment or a Systematic Investment Plan (SIP), where you invest a fixed amount regularly.
Once invested, you can track the performance of your mutual fund through online platforms, mobile apps, or by receiving regular statements from the fund house.
Having proper documents is one of the primary requirements for fulfilling the KYC verification process. It is necessary to have the following documents:
Taxation for NRIs investing in mutual funds is a bit different compared to resident Indians. To get the basic understanding, take a quick look at the following:
TDS is applicable to the redemption of mutual funds for NRIs. It is deducted at the source before the payment is made to the NRI investor.
Every investment is done for the sole purpose of achieving some benefit from it. Let us take a look at the benefits NRI can avail of investing mutual funds in India:
There are some important things that should be noted for NRIs regarding investments in mutual funds in India are as follows:
Investing in mutual funds in India can be a lucrative option for NRIs looking to diversify their portfolio and capitalize on the Indian economy’s growth potential. While the process is easy, it is crucial to stay informed about the regulatory requirements and other relevant details to make informed investment decisions. With the right approach and awareness, NRIs can effectively invest in Indian mutual funds and reap the benefits of their investments.
1
NRIs must comply with the Foreign Exchange Management Act (FEMA) regulations and complete the Know Your Customer (KYC) process to invest in Indian mutual funds.
2
NRIs can invest in most mutual fund schemes in India, but they may face restrictions on certain funds due to specific country regulations, such as those from the U.S. and Canada.
3
Yes, NRIs can invest in mutual funds using their NRE (Non-Resident External) or NRO (Non-Resident Ordinary) accounts, subject to applicable regulations and fund house policies.
4
NRIs can redeem their mutual fund investments by submitting a redemption request form or online through the fund house’s website, and the proceeds can be credited to their NRE/NRO accounts.
5
NRIs can track their mutual fund investments through online platforms, fund house websites, mobile apps, and by receiving regular account statements via email.
6
Yes, NRIs are allowed to invest in SIPs, enabling them to invest a fixed amount regularly in a mutual fund scheme.
7
NRIs may face challenges such as tax implications in both India and their country of residence, compliance with multiple regulatory requirements, and potential restrictions from certain mutual funds.
Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.
Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors
In this policy, the investment risk in the investment portfolio is borne by the policyholder.
Kotak e-Invest
Features
Ref. No. KLI/22-23/E-BB/521
The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The content has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Further customer is the advised to go through the sales brochure before conducting any sale. Above illustrations are only for understanding, it is not directly or indirectly related to the performance of any product or plans of Kotak Life.
