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Investment tips for NRIs to get higher returns and financial security

By Vivek Jain, Head Of Investments, PolicyBazaar.com

Amid the soaring inflation rate and corroding interest rates on savings, investors like to keep an eye out for lucrative investment opportunities that can fetch them good returns. The Indian market has caught the fancy of not just natives but also Indian-origin investors settled abroad. With the FDI influx over the past two decades, the country truly is one of the fastest-growing and stable economies across the world.

However, the Indian market is inundated with investing options and therefore, it’s a real challenge to pick the right investment to reap maximum benefit while ensuring financial safety. The rule of thumb for investment is to park your hard-earned money systematically keeping the long-term goal in the picture. Therefore, you should look at options that provide compounding returns over a span of 10, 20 years or more. Talking about India, the RBI has projected India’s GDP growth rate at a promising 7.8% for FY 2022-23. Not just that, India is also among the economies that made the fastest post-pandemic fiscal recovery. If you are among the NRIs who wish to be a part of India’s growth story, here are a few investment tips to get you started.

The more you delay, the more you pay

Quite understandably, one can’t be in a tearing hurry while making an investment as important as this. Long-term investments are made keeping your life’s milestones in mind, and therefore, need careful consideration. However, make sure you don’t sit on your investment decision for too long as every passing day will cost you higher. Time, indeed, is the most important factor that will affect your returns. In case you want to attain a sizable corpus for your child’s education, you can start investing as early as when your child is three months old. By doing this, you will ensure your money is locked for a duration enough to get you desirable returns. You could look at investing in capital guarantee plans that not only give you great returns but also come with a life cover that will secure your family’s finances even in your absence.

Cruising safely through market volatility

Globally, markets are experiencing volatility induced by a number of factors – Russia-Ukraine geopolitical unrest, the US inflation and the Fed rate hike to name a few. This has had a cascading effect on markets across the world, keeping investors on pins and needles about their money. If this market volatility makes you stall your investment plan, rest assured, there are options for you to wipe out that apprehension. For instance, guaranteed return plans are completely unaffected by market instability and provide you with a fixed and tax-free rate of return that is higher than FD. Further, NRIs who hold non-residential external accounts in India are entitled to a GST refund as well. Also, they come with an insurance component as well. Considering the tax refund on top of these benefits, the income generated automatically gets higher. Given the market undercurrent right now, this might be the best option to avoid any risk to your investment.

Making the best of market-linked returns

Ideally, investors like to see their money grow as much as possible. So, let’s talk about options for investor who likes to see the magic of compounding unfold in their investments. If you are someone who likes to enjoy the upside of the market while also looking for a financial safety net for your loved ones, you can consider parking your money in Unit Linked Insurance Policy or ULIPs. Fairly preferred investment avenue for optimistic investors, ULIPs are a hybrid of investment and insurance. Designed for long-term investments, ULIPs can help the policyholder reap returns as high as 12-15%. Though one can partially or fully withdraw their money after a 5 year lock-in period, the key to achieving desired returns is to keep your money invested for at least 20 years or more.

The only way to beat towering inflation is to invest your money in options that generate long term benefits. The best way to invest is to create a diversified investment portfolio for wealth creation in order to meet your life’s milestones comfortably.

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