NRIs can directly invest in mutual funds in India using regular banking channels through their NRE or NRO accounts.
Investing in mutual funds can be a wise move, as it can give you better and unlimited returns than traditional investment options. This is the reason why non-resident Indians (NRIs) also wish to invest in it. But can NRIs invest in mutual funds in India? The answer is yes. But there are some terms and conditions. Non-resident Indians (NRIs) are Indian citizens who live in India for less than 182 days in a financial year.
You can invest but
NRIs can invest in Indian mutual funds if they comply with the Foreign Exchange Management Act (FEMA). As per FEMA laws, NRIs cannot keep their funds in regular savings accounts. Many AMCs offer options for NRIs to invest in hybrid, equity and hybrid mutual funds. According to Tata Capital, it is important to note that many AMCs and fund houses in India do not allow NRIs from Canada and the US to invest in Indian mutual funds. This is due to compliance requirements under the Foreign Account Tax Compliance Act (FACTA).
Multiple ways to invest
There are several ways to invest, such as online or through power of attorney. However, many AMCs do not allow investments in foreign currencies. For this reason, they must open one of the following accounts. One is- Non-Resident External (NRE) account. An NRE account helps NRIs invest their foreign income in Indian mutual funds. The other is- Non-Resident Ordinary (NRO)- NRO accounts are opened in Indian banks in the name of NRIs. According to Tata Capital, the bank manages any Indian income made by the NRI. After opening an NRO or NRE account, NRIs can invest in Indian mutual funds using the following methods.
You can invest like this
For one, NRIs can invest directly in mutual funds in India using regular banking channels through their NRE or NRO accounts. To do so, they need to submit the required KYC documents, such as Aadhaar card, PAN card, bank statement, passport and proof of foreign residence.
Second, mutual fund investments for NRIs can also be made through a Power of Attorney (POA). A credited AMC allows the POA to invest on behalf of an NRI after completing the KYC process, and the investor and the POA must sign the KYC papers to invest in Indian mutual funds.
These documents will have to be give
Passport, Photograph, Proof of Address, PAN Card, Cancelled Cheque from NRE or NRO account, Certified Foreign Address Proof (such as latest utility bill, residential permit, driving license, and others), Indian Address Proof (such as bank statement, Aadhaar card, or driving license), etc.
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