Beginners guide for NRI's who wish to invest in India.

 First things first – Let us all understand what investing is exactly? Investing for any person having a stable income means setting aside a portion of this income that you think you may not require in the short-term future. While you are working hard in another country to earn the luxuries of life, this extra money of yours if invested well, helps you generate an additional income apart from your regular business. 

As an NRI, the Indian markets give you a vast opportunity to invest your money and reap the lucrative benefits of your investments. The government also gives NRIs special preferences and facilities when it comes to investment in the Indian markets. All you have to do is open an NRI savings account with a bank in India. You can opt for an NRE account, NRO account or an FCNR account according to your needs and requirements. 

NRIs can invest in various Indian asset classes like NRI mutual funds, Stocks, Pre-IPOs, Indian bonds, Real estate and many more. If you think this information is a little too much to handle, don’t worry, RELAX!

You need to plunge step by step into the wide pool of investments. However, overwhelming it may seem, a well-thought plan will always help you sail through.

Determine your investment goals

In order to invest in the right securities you first need to define your investment goals. You may want to invest for a specific future requirement like your child’s education, retirement plan or settling in a new property in a new country. Or you may also invest for short term gains that may add to your bank balance. In the beginning, it is advisable to invest in short term gains with low risk. Indian mutual funds are a popular choice in securities among NRIs planning to invest in India. 

Another aspect that you may want to consider before deciding upon your investment instrument is the time you would like to devote to your money invested. You may decide to actively participate in investing or trading in securities on a weekly or monthly basis or you may take the "invest it and forget it" route wherein you park your funds in some established low-risk securities and reap sure shot returns without looking into it much.

Whatever you may decide, it is this decision that determines which securities you should invest in.

Set aside a beginner’s amount

Since you are a beginner, it is always advisable to learn the theory and practice of investments hand in hand. Set aside a fixed surplus amount that is not a part of your immediate required funds and you would not need it in the very near future. We do not mean that you will lose this money! Setting aside a pre-set amount for investments will relieve of you any that may occur due to the volatility of the Indian securities market. This not only helps you keep the focus on your main line of business but also increases your risk appetite in the market. And as we all know, higher risk leads to higher returns.

Learn about the basics of investing

Irrespective of the surplus funds you may be earning, it is always advisable to first learn the basics of investing and then put your money into the market. Learn about the different types of securities present in the market today and the difference between each one of them. Find out the difference between shares and bonds, mutual funds and gold led securities. Understand what you mean by indexes, volatility, futures and options. All these together will make your investment portfolio. All this information together may look a little too much to digest in the beginning but having a financial expert by your side who can guide you through can be of great help.

Chalk out the levels of risk

Carefully observe your cash outflows and inflows each month. This will give you a rough idea as to how much funds do you make in surplus per month. Also taking into account your profession, stability of income, financial responsibilities and future plans, budget your finances. This will help you ascertain your risk appetite. As we already know, a higher risk appetite will lead to higher interest rates and higher returns will a moderate and low-risk appetite will lead to a moderate and low return respectively. Based on your risk appetite you can now choose from the financial instruments that are available in the Indian markets.

Search for a suitable platform

For NRI’s who are a beginner in the field of investments, it is always advisable to seek help from an Indian financial expert who not only knows the Indian markets well but also understands the intricacies of investment. SBM Bank India's dedicated team of experts are always available for you to help you make your transition from a beginner who invests in low-risk mutual funds to moderate and high-risk securities smooth and hassle-free. Invest in SBM Bank India's customised investment portfolio to make your investments stable and fruitful at the same time.

Open an NRI account

According to FEMA (Foreign Exchange Management Act), an NRI can deal in investment securities like equity, debt, mutual funds etc. only through NRI trading and Demat accounts linked to an NRI bank account. NRE savings account and NRO savings account are both opened in Indian currency while an FCNR savings account is opened in your foreign currency. Depending upon which of the 3 accounts suit you the best, you need to first open this account in India only after which you will be allowed to transact in the country. SBM Bank India provides you with exclusive bespoke NRI account services, lucrative NRI interest rates and services to help you channel your funds in the best possible way.

Invest and Enjoy

Investment is all about compounding the factors and gaining profits. The tenure, risk and amount put into investment security will determine how much surplus will you earn. Short term volatilities may sometimes bring your morale down, but choosing the correct investment option will always profit you in the long term investment scenario. Do not get carried away by the market’s short-term behaviour. Invest only after studying the investment’s future probable performance and a long-term record.

Once you have decided on making the most out of your surplus funds, do not doubt yourself. Go ahead and invest. Keep all these tips in mind and open your NRI account as soon as possible to maximize your benefits from anywhere in the world. SBM Bank India’s personalised banking is happy to support you in case of any assistance that you may require. Also, visit SBM Bank India to know more about our NRI saving account.