Family Trusts : How it helps in your Estate Planning

Who doesn’t want to ensure the financial safety and security of loved ones?

You work so hard for your entire life to build the required corpus, assets or to grow your family business (if any) to inherit the legacy to your family.

But, what if there are many heirs to your property?  In the case of having children from a previous marriage?  In other words, you have a very complex family structure.

Have you given a thought that how will a smooth inheritance process take place after your demise?  Who doesn’t want to avoid family disputes on property-related issues? This is where one needs estate planning.

In this article, we will introduce you to the concept of family trusts and the basics of estate planning.

Having an estate plan in place is to achieve seamless intergenerational legacy distribution, continuity of business, and safeguarding the benefit of all the heirs, are the best thing you can do for yourself and your loved ones.

What is Estate Planning?

Estate planning is nothing but writing it down, how you want to distribute your wealth among your family members after your demise. It can also be a plan that defines, how will your family legacy be carried on or who will head family business, in case you are ill or in a critical health condition.

Estate includes immovable like home (real estate), agricultural land, etc, as well as immovable assets like gold jewelry (commodity), our bank balance & fixed deposits (cash). Items such as our collections like coins and paintings are also a part of the estate.

When should one do estate planning?

People have a myth that estate planning is for rich, not for poor or it is a thing to be done after retirement. At the same time, it is suggested to do estate planning as soon as you are having any liability on you (Debt/Loans) and you have any asset whether physical or financial (whatever amount it can be).

You need to write it down, how will your debt be met, what asset should be used to pay off and who is answerable to things. It is to ensure that your loved ones are not troubled for loan related issues after your demise.

Most of us defer estate planning for a later date or time due to various reasons such as—to avoid discussion on demise, avoid difference of opinion with a better half on the distribution of asset, lack of knowledge, etc. But, the time is now and we must put this on our priority list and not postpone it, thinking it to be irrelevant.

As I said estate planning should be done by every person. However, a more important question is how to do it and what are the ways to do estate planning.

What are the ways to do Estate Planning?

In India, it includes making a nomination (for financial assets – it is suggested to always nominate a person whom you want to actually transfer the asset), joint ownership, will or setting up a trust.

If there is no such thing or there are any disputes like nominee is different from the legal heir, then wealth distribution will happen as per the succession law depending on the religion you belong from.

As per succession law, the Property of a Hindu resident will be distributed as per Hindu succession law i.e. equally among class – 1 legal heir (spouse, mother, and kids).

For eg. You have a house worth Rs. 3 Cr. and there are 4 kids. You have not made any will or trust. So, it is not necessary that 4 of them will agree to the not single point of selling the house and distributing the proceed equally. One or two may disagree and keep the property with them.

If you want to know more about succession law, you can watch the video given below –

Estate Planning – using Trust

If there is a complex family structure like kids from first marriage, many kids, stepmother, special child or a minor, or you have a business empire and due to a lot of drawbacks/disadvantages of another source of estate planning like nomination, succession law or will (whether registered or not) it is suggested to have a living trust (private trust) to enable smooth inheritance of wealth.

Trust is an agreement between the settlor (maker of trust) and the trustees to transfer legal ownership of assets/property to the trustee with an obligation that the same should be held and used for the benefit of all the beneficiaries as specified in the trust deed.

For forming a trust, you (the giver of wealth) need to write a trust deed that specifies all the instructions for the distribution of wealth. The settlor then appoints a trustee to execute the trust deed and he/she also needs to fund the trust by transferring the assets (movable as well as immovable). Trust needs to be registered with registrar office of state government (trust falls under state list and hence are governed by state laws) by paying stamp duty.

Trust deed – The trust deed should specify the purpose of the trust, it’s objective and how will it function. You need to identify the trustee or trustees which can be a friend or relative or it can also be a corporate entity. You also need to give instructions in the trust deed about execution in case of any incapability happens to you (critical health conditions) and about its dissolution.

Trustee – Corporate trustees are professional firms or companies that provide or arrange different services as required by the trust. In a trust deed, you need to specify the successor trustees (if first trustees are not alive or are retired).

Myth about Trustee

People think that if they form a trust, their wealth will be owned by the trustee and they will lose control over it. So, yes the trustee becomes the owner but in a virtual world. In reality, the trustor has an obligation to fulfill the purpose of the trust deed.

A trustee has no right to use the property for himself/herself. He/she can use property just for the benefit of beneficiaries. However, while the settlor is alive, he has full control over the activities as well as an asset transferred.

In fact, nowadays there are various professional trust agencies that provide trustee arrangements. They don’t have any biased or personal sake in your wealth and they will stand as whole-time executor of your trust deed.

Drawbacks of Will

We know that a will is one of the traditional method used to do estate planning. But, will whether registered or unregistered can be challenged in the court of law. Let’s see in detail, what all are the drawbacks of will?

1. Will can not take care of unforeseen eventualities – As the will is a final declaration of your intention with respect to your property, which the courts endorse only after your demise. Thus a Will can not take care of unforeseen eventualities like any disability or illness as it is towards the disposition of property of the deceased rather than management.

2. Probate of will takes long period – A Probate which is necessary for establishing the rights of the executor or the beneficiaries under the Will in certain cases may take 6 months to 1 year and until such time, the beneficiaries would not be able to use the assets.

3. Can be challenged in court – Authenticity of a will can be questioned in the court on the grounds of fraud, forgery, undue influence (made in the pressure of something), mental illness of maker, lack of will-maker’s capacity, lack of knowledge and approval, and revocation. Even a registered will can also be questioned as registering a will does not lend it any legal sanctity or remove suspicion about its validity it’s just that it reduces the grounds on which it can be contested in court.

In India, a traditional way of estate planning has been setting up Hindu Undivided Family (HUF) which is a distinct unit for tax policy as per the provisions of section 2 (31) of the Indian Income Tax Act. However, it may be noted that after a property gets apportioned to a HUF, every coparcener has an equal rights to it and partition of HUF land has often led to clashes and court cases.

Therefore while the HUF with its archaic tax treatment and confused entity fails to cater to the requirements of present-day wealthy the Will is posed with un-certainties and the nonsense of a Probate. In such an atmosphere, one approaches the Family Trusts with a lot of hope and expectations that Family Trusts have managed to standby.

Why private trust should be used for a special child or minor child?

As an investor, we focus more on wealth creation. However, how will this created corpus devolve on the child and who will provide for & take care of the children when the parents are no more are important questions as well.

Hence, estate planning for parents with a special child (mentally or physically challenged) or minor children is even more crucial. Those parents need to plan in advance that who will take care and provide the needful to their special child.

A parent can grant responsibility of guardianship to a close relative but, it is a whole-time job and no one is sure that the things will work out as per the plan. In today’s world, everyone has their own priority and problem, there is no surety that he/she will be able to spend enough time on this responsibility.

So, to deal with it, a parent is suggested to form a trust and appoint two trustees – one from relative/friend and second should be a corporate trustee. In this way, the corporate trustee is a professional has all the arrangements mentioned in the trust deed of a parent with a minor child or a special child. It will also help parents to pass on the day-to-day operation and execution responsibilities to corporate trustee

Following are the services with a professional trustee can provide or arrange for a special child

  • Full-time helper
  • A cook
  • Health care attendants
  • Specialist doctor
  • Basic household groceries
  • A channel for making payments of all bills/expenses


For a special child or minor child, as they are not able to claim there right, you need to appoint an executor along with a will. And due to various drawbacks of a will like long probate period or execution-only after the demise of the maker, it is suggested to have a trust formed.

When will you become a Millionaire? Top 1% of world

Recently, I came to know that around 6500 Indian millionaires have migrated to other countries this year.

The moment I heard this, the first thing which came to my mind is “How many millionaires are there in India? and entire world?”

Are you part of that list of millionaires? And if NO, then when will you be on that list?

When we say “Millionaire”, it means someone who has a total net worth of around $1 million, or Rs 8 crore in Indian currency apart from the house they live in!

0.7% of people in the world are millionaires

We all want to create a big retirement corpus and achieve financial freedom, but what if we keep it simple and just think of reaching $1 million first in our life? And if we can do that by the time we turn 50 yrs of age, that would be a wonderful achievement.

Especially because there are just 0.7% of people in the world who are millionaires!

Yes, you heard it right!

number of millionaires in this world

Only approximately 56 million people on their earth are millionaires (many of them are multimillionaires and billionaires also). We have close to 8 billion people on Earth, so that makes 0.7% of people on Earth as millions.

What about INDIA?

If you specifically talk about India, as per the official data, there are close to 796,000 millionaires out of 140 crores people and that makes it just 0.06% of the population.  The US alone has around 2.55 cr millioanires, while China has around 62 lacs.

So if you achieve a wealth of $1 million, then you are amongst the topmost cream layer of the country.

But how easy is it to create $1 million in India by the time you turn 50 yrs?

Truly speaking it’s not an easy task per se.

One has to be super aggressive when it comes to investing money, from an early age if one wants to reach that kind of target, especially because we also have to buy a house (most people take home loans) and clear off the loan too. Apart from these, we have other goals like buying a car, vacations, children’s education and marriage etc.

Forget creating $1 million, most people will struggle to close off their home loan by the age of 50 and create enough corpus to meet their children’s education by the age of 50.

However, A tiny percentage of people who earn very handsomely and invest smartly create good wealth and many of them will become a $ millionaire too. A good thing is that while many are leaving the country, the rate at which millionaires are getting added every year is very high.

millionaires migrating from india

What is required to create $1 million by the time you turn 50 yrs?

Let’s deal with the idea of what exactly is required to become a millionaire ($1 million or approx Rs 8 crore) by the age of 50. Here are some assumptions before we start!


  • This amount is apart from the primary house and any other financial goals like kids’ education, car, vacations etc
  • We will also assume that the person can increase their SIPs by 8% every year and the return on investments is around 10% (net of taxes)
  • We are assuming the same Dollar Rupee conversion rate in future also.

Note: In future (after 10-15 yrs), even $1 million will not be of same worth like today in India, however we are mainly focused on the calculation part here.

If we go with the above assumptions, here is what is required at different ages (an example)

Case 1: Age 25 

  • Current Wealth : 0
  • SIP required: Rs 35,000 per month

A 25 yr old person, with no wealth in their hands, wants to become a millionaire by the age of 50, then they will have to start a monthly investment of approx 35,000 and then continue that for the next 25 yrs. Here is how the growth will look like

Case 2: Age 35 

  • Current Wealth: 50 Lacs
  • SIP required: Rs 1,00,000 per month

A 35 yr old person, with around 50 lacs in hand, wants to become a millionaire by the age of 50, then they will have to start a monthly investment of approx 1,00,000 and then continue that for the next 15 yrs. Here is how the growth will look like

Case 3 : Age 45

  • Current Wealth: Rs 3 cr
  • SIP required: Rs 4,00,000 per month

Finally, let’s also talk about someone who is 45 yr old. They must have approx 3 cr in hand and shall be able to invest around Rs 4 lacs per month (this is just one combination), if they want to become a millionaire by the age 50. This is quite tough for most people, but still, an example has to be given.

As you can see, it’s not a child’s play to become a millionaire by age 50 yr. One has to start early and start very well and continue for a very long time to do that.

Hence, The topmost thing to focus on has to be your income-generating capability which will be income on the table and then the next step will be your discipline to continue your wealth creation path.

I hope you were able to get insights from this article. In case you want to start/continue your wealth creation journey with right-hand holding, then our wealth creation services can be helpful for you. Please click here and reach out to us to explore how we can help you in reaching your millionaire target by age 50.

How to track your mutual funds & stocks in google sheet?

Today, I will share with you a very simple way of tracking your mutual funds and stock portfolio in google sheets.

A lot of investors keep it simple and track their stocks and mutual funds portfolio in either a google sheet or excel sheet on their laptop. If you are someone who likes to keep track of their portfolio on google sheet, you may be updating the current NAV of the mutual funds or stocks every time on the google sheet.

Instead of that, you can use a google sheet formula =GOOGLEFINANCE() and pass on the mutual funds/stocks code which you can get from the google finance website. Let me give you an example of a mutual fund.

How to find the code of the fund/ stock from google finance?

Let’s say you want to get the NAV of Axis growth opportunities fund. All you have to do is, go to and search for that fund, you will see it in the search box and once you click it, you will find the code MUTF_IN: AXIS_GROW_OPPO_1LDB7MS

You just have to remove the space after “:” and then in google sheet apply the formula below


This will fetch the latest NAV of the fund and then you can multiply the NAV value with the number of units this way you can get your funds value. This way you find all your mutual funds and stocks’ current value and add them up. These values will keep updating automatically every day.

Note that if you are doing the SIP in a mutual fund, then you will have to apply some formulas to find out the latest number of units, but it won’t be that simple.

But if its a fixed portfolio, then you can just update the UNITS one time or update it when you invest more money.’

I hope you liked this quick information and you will apply this.

10 precautions to take before transferring money to someone online deal

Online scams are on a rise in India for the last 5-6 yrs as the UPI and online transactions have increased over time.

Recently a guy I know told me that he accidentally lost Rs 56,000 in online fraud. He wanted to go on a tour and when he searched online, he came across a website that had a tour operator number where he called and enquired. Everything looked genuine and after some basic checks, he did a UPI transfer of the whole amount of Rs 56k.

The website link where he got the number was and the phone number was 9339258256

Precaution to take while doing money transfer to a new person online

It was a big mistake

As soon as he transferred, he soon realized that he was taken for a ride and realized his mistake. In general, this guy is very cautious and does not trust these kinds of online contacts, but in this case, there was some element of RUSH and overtrust as in the recent past he had some online bookings in a similar way it worked.

I feel that while we all are aware of these frauds and try to be cautious, someday even we all may fall for these tricks as the other side can outsmart us.

10 precautions to take before sending money to someone online

Let us see some of the basic checks and precautions we must take in order to prevent any online fraud while we are transferring any money online to someone for booking any tours, trips, hotels, or for shopping purposes. Let’s look at them one by one

1. Search for the number/company name on google once

One small search on the phone number or email of the person may reveal a lot of details at times. If the same person has cheated others, there is a good chance that you will get some pointers for it. When I searched for that number 9339258256 online, I saw that the same number was listed for various businesses, which clearly shows that’s a cheater.

Same phone number is registered for multiple business in google. Its a clear online fraud and scam

2. Use NEFT/IMPS transfer instead of UPI

UPI is fast and secure, but only valuable if you are transferring money to the right and genuine person. The problem of UPI is that it MASKS the details of the person and just gives you a scan code or simple details which does not tell much about the person. If you are in doubt, always ask for the bank details to transfer money through NEFT or IMPS.

This will at least give you details like a bank account, Name of the account holder, branch etc. You can use this to verify or complain later at the bank easily. Also, the bank account name shall be of the same person.

3. Don’t Rush

What’s the rush?

Never take quick decisions while sending big amounts. At times, when you do things at the last minute, you are in hurry and often do not pay attention to small red flags. Also, your mind may not go into details that might have prevented a fraud. Always start a conversation with the person, talk to them once, wait for hours/days and then make any transfers after proper research.

4. Always transfer Advance money, not full

Most of the time, people pay the full amount if things look genuine and they don’t want to get into a headache of paying the balance later. They overtrust others. As far as possible, always pay an advance first and pay the balance later. This gives you a lot of time and in case you are unlucky, you do not lose all the money in fraud.

5. Continous callbacks are a red-flag

Most of the fraudsters/scamsters have a tendency to spam you with calls and messages again and again. I have personally seen this in “NGO Scam” where someone calls you or WhatsApp you to donate money for an ill child in hospital, If you show any small interest, you will be bombarded with WhatsApp messages and callbacks to donate the money NOW.

This is a big red flag. At times you get a call from some senior or higher-up following with you. If this is happening in your case, be very cautious about it.

6. Validate the number or contact person with online groups/sites

Most genuine businesses have a strong online presence. They have their own website, Facebook page, Instagram page or some other social media identity. You can read others’ reviews, their phone numbers are published there and other details like address, and business details are mentioned.

I am not saying that fraud people cant create these things, but it’s a very simple checkpoint. If you got in contact with someone who is missing these things, you have a strong reason to doubt them.

7. Search on Truecaller

Another great trick is to simply check the phone number on truecaller App. Others who may have come across that fraudster or same phone number must have tagged them as “fraud”, “scam”, “Spam” or similar words. It will give you some hint on their genuineness

Check for a phone number on truecaller to check if its spam or fraud or not

8. Ask for compliance like GST / Cheque/ References

One thing you can do additionally asks for a CHEQUE copy and mention to them an excuse that you will make payment from your corporate account and this is the mandatory requirement by the company. This way you will get all the details of the account holder, branch, and account number. A lot of things you can cross-check if the account belongs to the same person or not. A lot of fraudsters do not use their own account. This can become a basis for more questioning and you may catch a fraudster.

Also if it’s a business entity, do ask for a GST number, etc too as added security.

9. Don’t trust the random low key websites advertisements

Never trust people or phone numbers that are listed on low-key websites, after all, they list their business on dead sites which have no credibility. It simply appears in the search engine for someone who is searching on google.

10. Listen to the Gut feeling

Finally, I would say, that you shall listen to your gut feeling and if your inner voice says that things are not right, better do not do the transaction. Do talk to the person to whom you are transferring the amount, and do watch their language, their tone, and many small things. But do trust your inner voice and don’t do the transaction or at least wait for more time.

More precautions to take

  • Never share OTP, or PIN with anyone ever no matter what
  • Don’t respond to calls that say that they are from RBI, IRDA, or Tax department which ask for your personal details
  • You never have to pay your UPI pin to revise the money on any UPI App. A lot of fraudsters say they are sending the money to you but have sent you a “Payment request”
  • Never give access to anyone for sharing your screen for assistance purposes. Don’t use software like Teamviewer or Anydesk

Steps to take if you lost money to any online fraud

  • Do complaint to Cyber Cell immediately
  • Do file an FIR also if the amount is significant for you.
  • Do share about the incident on Twitter and other social media channels you are part of


e-Nomination facility in EPF accounts – Update your Nominee online?

Almost all the salaried employees have an EPF account. For many years and sometimes for decades, the money gets added to this EPF account and we all feel great about it.

However, we do not pay attention to a small thing which can lead to a big problem. And that is not having the right nominee in the EPF (and all the other products)

If you do not have any nominee name mentioned in EPF or if you have a wrong person name in EPF, it’s going to be a big mess while claiming the money in future in case something happens to you. Your family will have run from post to pillars to claim back the money.

e-nomination facility to update nominee details in EPF accounts totally online

A lot of people have made nominations in their EPF long back when they were unmarried and mostly put their parents name into it. However later they get married and have kids and many a times even parents are not there now.

In such a case, it’s critical and high time that you update your nominations in EPF.

The great part is that now it can be done ONLINE.

e-Nomination facility in EPF

Last year, EPFO came up with e-nomination facility in the EPF accounts. Now this e-Nomination facility can be availed by you, if you have your mobile number linked with an active UAN and the adhaar verification is also complete. This makes sure that the whole process is secure and no frauds are there!

Let’s see how you can update nominee online in your EPF account.

Step #1 – Login to EPFO site with your UAN number

The first step is to go to EPFO website where you can enter your UAN number and password. The UAN website has changed quite a lot of times, so you might have to find out what is the exact website url, but at this moment this is the web link

This is how the window will look


Step #2 – Go to “Profile” and click on “Edit Nomination”

Then you need to go to “profile” section and click on “Edit Nominations”

Click on Profile and then click on Edit Nomination

Step #3 – Nomination Screen will Appear

On the next page, go to nomination form and you will see the screen as shown below. You will see some of the following fields which will get auto-populated from the database and these can’t be edited.

  • UAN
  • Member ID
  • Establishment ID
  • Name
  • Date of Birth
  • Father/ Spouse Name
  • Relationship
  • Date of Joining
  • Gender
  • Marital Status

The two things which you can edit are

  • Permanent Address
  • Present Address

If the present address is the same as a permanent address, a copy of the permanent address into the present address is to be enabled. These details can be updated by clicking the “UPDATE” button.

update address

Step #4 – Enter nominee details and other family members data

This is the next page and the main one. Here you can update your nominee’s names and other details, along with the names of family members who will be eligible to get any kind of pension after you.

If you have given any names in past, these names will already appear there. You can update/change those if you wish to. Check the screenshots below

You can edit or even delete any family member details

You can nominate family members from the details mentioned about family

Important points

  • For the capture of Nomination details, against each nominee, one KYC detail is to be provided by the member.
  • The total share for all PF / EDLI Nominees should add to 100%.
  • Entry into Pension Nominee Details is allowed to be filled only in case member does not have any family.

Step #5 – Generate PDF

  • After you update all details, the next screen will appear where you can put a check-mark on “Nomination declaration” and click on “Generate PDF” button.
  • After checking the generated PDF, click on “Submit to Employer for Approval” button. Now the online nomination form is submitted in the system to the employer for his approval or rejection.
  • You will have to take a printout of the PDF file generated and submit it to the employer after signing it.

Generate pdf, submit to the employer and wait back and see if he approve or rejects it

Change of Mobile, Email id and KYC information

Apart from the nomination details, you can also change details like your mobile number, your email id and other KYC details.

I hope this information was useful for you, just don’t read this article, but also act and update your nominee name in EPF account using this e-nomination facility

This was all that I wanted to share in this article. I hope I have made the process easy for you guys. Kindly post your queries in the comments section and also update us if you did the process?

How to claim refund from IEPF? (Unclaimed dividends, stocks)

Have you ever thought what happens to all those unclaimed dividends, shares or any money which was lost in scams or frauds?

It might also happen that your grandparents or parents have made some investments and you are not aware about it? How to find it out and claim it back?

The answer is IEPF, which is Investor Education Protection Fund Authority (IEPF) by the Ministry of Corporate Affairs, Government of India. This is a body setup by govt, where all these unclaimed money gets transferred and investors can claim them back by following a procedure.

IEPF recovery of money from peerless group
Recently IEPF authority recovered back Rs 1,514 Crores from Peerless finance which had done a fraud in past where lots of investors lost their hard earned money.

What exactly gets transferred to IEPF?

Something which is unclaimed for a period of 7 yrs., goes into IEPF, example are ..

  • Unclaimed shares lying in demat accounts from years
  • The application moneys received by companies for allotment of any securities and due for refund
  • Matured debentures with companies
  • Matured bank deposits
  • Unpaid dividends by companies
  • Interest accrued on above things
  • Any investors money which is recovered from fraudulent companies

In case the dividend for any year is claimed or received by the shareholder during the last seven consecutive years, the shares will not be transferred to Investor Education and Protection Fund.
The below chart shows the unclaimed or unpaid money (in lakhs) transferred to IEPF (from 2001 to 2018) –

Unclaimed money transferred to IEPF every year.

How to search for unclaimed and unpaid amounts?

In order to get a refund, the first step it to find out that there is any unclaimed amount for yourself/parents/grandparents etc. There is a facility provided by IEPF where an investor can find out the amounts which they are liable to get back.

The investor can search for their unclaimed and unpaid amount by filling in certain details such as investor name, father or husband name, folio number etc. by Clicking on this link.

The below-attached image shows how the investor can search for the unclaimed and unpaid amount.

investor can search for unclaimed and unpaid amount of IEPF government portal

Note that it’s a bit complicated and cumbersome to do the search. Please be patient and try all kind of combinations.

Tip : I suggest you putting all possible combinations of your name, your father/mother or grandparents’ name. A lot of times, our parents/grandparents invest in shares or have some deposits which we are not even aware about. This is how we can dig deeper and find out!

Process of getting Refund from IEPF?

Here I am writing keeping in mind refund for shares, but the process is pretty much same for other things as well.

  1. Go to IEPF Website and fill in IEPF Form 5 and use the option form upload. You will be redirected to Ministry of Corporate Affair (MCA) for form Upload.
  2. Login using your ID and Password (if existing or else register yourself by clicking on register and entering the required details).
  3. After login, click on normal upload.
  4. Click on Browse and attach the form. Click on Submit.
  5. SRN will be generated and you will ask for a payment option (Pay Now or Pay later).
  6. Though Fee will be zero but click on Pay now option only to generate the acknowledgement.
  7. After clicking on Pay Now, you have to click on Finish when the zero-fee page will be shown. The acknowledgement will be generated.

What is the procedure after applying for Refund?

The investor has to send the attachments prescribed below to Nodal Officer (IEPF) of the company at its registered office in an envelope marked “claim for a refund from IEPF Authority” for initiating the verification for a claim.

a) Print out of duly filled and uploaded claim form IEPF-5; with claimant signature and if joint holders are involved than the Form should be signed by all the joint holders.

b) Copy of acknowledgement generated after uploading the claim Form IEPF-5

c) Indemnity Bond (original) with claimant signature (As per format given in Annexure-II) to be executed :

  • On a non-judicial Stamp Paper of the value as prescribed under the Stamp Act (According to state) if the amount of the claim is Rs 10, 000 or more. Please ensure to enter date, place and Signature of claimant and witness.
  • On a plain paper if the amount claimed does not exceed Rs.10,000.
  • In case of a refund of shares, on a non-judicial Stamp Paper of the value as prescribed under the Stamp Act.

d) Advance Stamped receipt (original) with the signature of the claimant and two witnesses. (Format is given at Annexure I)

e) In case of a refund of matured deposit or debenture, or bonds, or where shares (in physical form) are claimed original certificate thereto

f) Copy of Aadhaar Card of the claimant and if joint holders are there, Copy of Aadhar card of all the joint holders

g) Proof of entitlement (certificate of share/Interest warrant/dividend warrant, Application No. etc.)

h) Original Cancelled Cheque leaf (it must bear the name of the claimant and the cheque leaf must be of the same account of which details are given in the Form IEPF-5).

i) Self-attested copy of Passport, OCI and PIO card in case of foreigners and NRI

j) Self-attested copy of PAN Card (mandatory in case of a claim for shares)

k) Self-attested Client Master List of De-mat A/c of the claimant

l) In case any Joint holder is deceased, Copy of Death certificate to be attached.

m) Other optional documents, (if any)

The company shall, within fifteen days from the date of receipt of the claim, send a verification report to the Authority in the format specified by the Authority along with all the documents submitted by the claimant. The Nodal officer may approve or reject the Form and enclosures submitted, subject to verification.

How will I get my money or shares from the IEPF Authority?

For a monetary refund, IEPF initiates e-payment as per the rules. If shares are reclaimed, the shares will be credited to the claimant’s Demat account by the Investor Education and Protection Fund.

I hope you understood how you can benefit from IEPF and claim back your money if there is any. Do let me know your queries!

Surrender v/s Paid-up – which is better option for your old insurance policies?

Do you want to get rid of your old money back insurance plans, but are confused if you should “surrender” or make it “paid up”?

Today I will explain which one is the best option amongst the two.

Surrender vs Paid-up option in Insurance policies

All those assured insurance plans which your parents made you buy from your friendly neighbourhood uncle is nothing less than a high premium low return policies with not more than 1-5% CAGR return.

These policies don’t provide enough life insurance cover neither they create enough wealth for you for your long term goals like children education, child marriage or retirement and on top of that, these policies have pathetic returns value if you want to close them before maturity and take back your money.

Mainly there are two ways to discontinue these insurance policies which are –

  1. Paid-up Policy
  2. Surrender Policy

What is “paid up” option?

Under this option, if a policy holder does not close the policy, but stops paying any further premium. However, note that this option is generally applicable only after one has paid for at least 3 yrs. (however, check your policy wordings for exact years)

The amount which you will receive at maturity will be reduced, in proportion to the premiums paid. This sum assured is called the paid up value. It is calculated using the following formula:

Paid up value = Original sum assured x (No. of premiums paid / No. of premiums payable)

Example – A traditional insurance policy with sum assured of Rs. 10 Lakhs for 20 years with a premium of Rs. 30,000 p.a. paid for 8 years. Let’s find out what will be its paid up value if one wants to stop paying further premiums.

Paid up value = 10,00,000 * 8/20 = 4,00,000

At a high level, the numbers don’t look back. You will get 4 lacs, but you paid just 2.8 lacs overall, however, remember that you will get this 4 lacs after so many years and you will lose the purchasing power because of inflation.

You can simply say that real worth of Rs. 4 lac received after 12 years is Rs. 1,58,000 today, taking inflation at 8%.

Therefore, if you are choosing policy paid up option, keep in mind that converting the policy into a paid-up policy will lock your money for the remaining term of the policy and also, actual worth of the amount, which you will receive in later years will be very less if the maturity of the policy is very far from now.

What is “surrender policy” option?

Under this option, you close the policy completely and take back your money. The money you get will be some percentage of your premiums paid minus the first year premium. And this percentage increases depending on how many years the policy premium has been paid.

A policy generally acquires any surrender value only after 3 yrs of premium payment, which means that if you choose to surrender your insurance policy before 3 yrs, you lose all your money and don’t get back anything.

Note that the surrender value starts with 30% and goes up depending on the number of years you have paid the premium.

Following is an indicative table which shows the surrender value as a percentage of premiums paid

[su_table responsive=”yes” alternate=”no”]

Time of Surrender % of premium paid – first year premium
After 3 years 30% of premium paid
After 5 years up to 8 years 50% of premium paid
After 8 years 65% of premium paid
Last 2 years to policy maturity 90% of premium paid


This percentage can change from company to company and depends on factors such as the type of policy. Every policy brochure mentions details about surrender value but, it is not compulsory that all the companies mention this percentage which is also called the surrender value factor in their brochures.

Example of surrender policy

Mr Pratik has bought a traditional insurance plan of 20 years with a sum assured of 6 Lakhs premium amount is Rs. 20,000 per year. After paying the premium of 6 years, he wants to surrender the policy.

Surrender Value = 50% of (premium paid – first year premium)

= 50% of (120000 – 20000)

= 50% of 1,00,000

= Rs. 50,000

You can see that he will just get Rs 40,000 from surrendering the policy even if he paid Rs 1,20,000

flow chart for surrender vs paid up insurance policy


When to choose “Surrender” and “Paid up” option?

Surrendering a policy is suggested when

  • You are not able to pay the premiums
  • You need money for some reason
  • When remaining number of years in policy is more than 8-10 yrs

This option is suggested because you still have many years left and you can pay the same premium amount in a better product which will do wealth creation for you.

Making a policy paid up is suggested when

  • You don’t need money but don’t want to pay further premiums
  • When you don’t want to pay premiums, but still want the policy to run
  • When your policy maturity is very near (2-4 yrs)

Making a policy paid up is generally not suggested, but a lot of times, investors are not able to take the pain of getting the reduced amount from their policy and feel like “they will get something in future”, however considering “time value of money“, it’s not a great option.

How to deal with the emotional part “I am facing so much loss”?

In both the options, there will be a loss for sure. Money back insurance plans are designed to give low yields and penalize you if you quit in between.

I think dealing with closure of insurance policies is more of a psychological battle You know you have got a wrong product and its bad for your future, but people can’t deal with the fact that they are facing so much of loss – “I paid 8 lacs, and I will get back only 4 lacs, I will lose 4 lacs”

Note that if you consider TIME VALUE, things will be easier to decide.

If your friend borrows Rs 100 from you and returns you Rs 110 after 10 yrs, you are not in profit, you are actually in LOSS. Because you could have created Rs 250 with an alternate investment and now you just have Rs 110, that’s Rs 140 loss.

Just looking at it from absolute numbers point does not make sense.

For example, imagine a sum assured of Rs 10 lacs with a yearly premium of approx. Rs 53000 per year. Now if a person has already paid 5 premiums and wants to surrender the policy, they will just get back around Rs 85000 (assuming 40% of 4 premiums, as one premium is deducted). The immediate loss of mind is for Rs 1.8 lacs (paid 2.65 lacs and getting back 85,000)

This is a tough situation for the mind and very tough to handle. A person feels why to take a loss when one is not recovering the amount paid also and just continues the policy till the end. The person will get back anything between 15-18 lacs, depending on the bonus amount declared.

This translates to only 5.69% and this the best case (it will get better if you die early after taking the policy, but I am sure you would not like it)

Now if the same person reinvests the same 85,000 along with Rs 53,000 premiums yearly into some equity-based products like equity mutual funds or index funds, even if assume a modest 12% returns which have happened in past, the wealth one will have will be 24.5 lacs and the IRR will be approx. 7.4% of the whole scenario. This second option also gives you better liquidity and exit option whenever you wish to get money.

How to add your new born baby to your health insurance policy?

Newborn baby comes with a bundle of joys. However, after his/her, your life changes a lot like adjusting your schedules, balancing your work life and most importantly managing your finances. One important thing which parents forget after the newborn arrives is to add him/her in the health insurance policy.

In this article, we are going to share what is the process of adding your newborn baby to your existing health insurance policy. Note that it does not matter if the child is biological or adopted, the process is exactly the same for all.

As medical emergencies are uncertain and unforeseen expenses may affect your finances badly. And also, getting health insurance for a newborn or a child below 5 years may not be possible, all health insurance policies have a certain entry age limit.

How to add a newborn baby in your health insurance?

There are two ways of adding a newborn to health insurance. First at the time of renewal and other is, adding during the year.

1. At the time of Renewal

There are two modes of doing it at the time of renewal, online and offline.

  • Offline mode – In offline mode, you need to inform your agent or insurance company, fill a prescribed form and attach a birth certificate of newborn baby, discharge card and other required documents along with cheque/DD of the increased premium amount.
  • Online mode – In online mode, you just need to visit the website of the insurer and go to the renewal page and you will see an option to add a newborn somewhere on the page. On selecting add newborn, the premium for your health insurance policy will be increased and you need to pay the revised quote. However, some companies may ask to attach a soft copy of the birth certificate of a newborn baby.

2. Before Renewal Date

Adding a child during the year can be done only through offline mode. You need to inform your agent or insurance company, fill a prescribed form and attach the birth certificate of newborn baby, along with NEFT/cheque/DD of the increased premium amount.

Important points

  • Waiting Period – Newborn baby is not covered until 90 days, due to the high amount of risk involved in medical emergencies.
  • Revised Premium – When you add a new member to your policy, the insurance company will recalculate the premium amount. So, you need to pay an increased premium amount.
  • Cashless card – You need to submit a photo of new born at the time of adding, to avail cashless card facility.

In the case of a newborn health insurance cover, it is very important to know, what is covered, what all are exclusions and whether vaccination is covered or not. So, Make sure you read your policy document.

CRED App Review – Earn rewards on paying credit card bill

Today I want to do the review of the CRED app. I have been using it for the last 12 months already.

CRED is an app, which gives you rewards on timely payments of your credit card payment. If you are not using this app, you may be making credit card payments anyways by other online methods. All you have to do is to make payments using the CRED app, that’s all.

It’s that simple to use!

There are various brand offers and coupons from categories like dining out, food delivery apps, flight tickets, and even shopping? Here is one instance.

We get different kinds of rewards for using or raising the credit card bill amount. Like, in my case, I have a PVR credit card of Kotak bank,  for every Rs. 15,000 credit card bill, I get points to redeem against 2 PVR tickets (max. Rs. 400 for 1 ticket). Because of this, I get influenced to pay my bills mostly by credit card to reach Rs.15,000 of a bill every month.

Here is how an offer looks like

Cred app offers explaination

This is how banks influence us to use a credit cards. But, when we pay bills of credit cards we never get any discount or reward on that amount?

However, now it is possible with the help of the CRED app. This app gives you rewards for paying your credit card dues via this app.

What is CRED App?

CRED is an app on which you add your multiple credit cards and make payments by the app itself, which gets credited to your bank in few hours. The app is exclusively for those people who have a good credit score (checked automatically from Experian or CRIF) and have some history of credit card payment. This is checked when you register for the app for the first time.

It is also equipped with the cred to protect feature which is an AI (Artificial Intelligence) backed system, that keeps track of every single nuance of a credit card payment journey – right from due date reminders, spending patterns and other card usage statistics.

There are two things you can earn on CRED App

Coins – You will earn coins equivalent to your credit card bill amount every time you pay the credit card bill. So if you pay the credit card bill of Rs 40,000, you will get 40,000 coins. The coins will keep accumulating month after month. So you can keep collecting coins and later redeem it in any manner. There are some offers and benefits which requires a very large amount of coins, so it’s beneficial to collect lots of coins. I currently have around 3,50,000+ coins in my own account.

Gems – You can also earn “gems” in the CRED app. These are different kinds of currency that are required by some offers. Right now one earns 10 gems on each referral. So if your referral signs up on the CRED app, then you will earn 10 gems. If you like Jagoinvestor, please help us earn some coins by registering on the CRED app using this link.

What are coins and gems in cred app

Here is a sample of some of the offers on the CRED app

  • iXigo flight bookings – Rs. 1000 off on using 5,000 coins
  • Flo Mattress – Rs. 5,000 off on using 20,000 coins
  • Swiggy – Free delivery for 3 months on using 5000 coins
  • UrbanClap – Flat 50% off on man grooming using 25000 coins
  • Flea Bazaar cafe – Flat 20% off on total bill using 5000 coins
  • Cashback – Get Rs 1,000 cashback for 30 gems
  • Flipkart – Rs 500 gift card for 20 gems

There are various kinds of coupons and offers available under the CRED app under different categories. Depending on what offer you want, you can go into that category and explore the offers available in your city.

Various kind of coupons and offers available on cred app

3 steps to register for CRED App

You can avail of the benefits of this app only if you meet the eligibility criteria defined by the app. Which is – to have a good credit score. Following is the step-by-step process for this –

Step 1 – Download the Cred App from here

Step 2 – Register to cred using your phone number

  • Login to cred using your name and phone number registered with a credit card.
  • The app will prompt you to grant permission for phone access to verify the number and SMS (which is needed to send a reminder on your due credit card bills), just grant the permissions.
  • Cred will process this data and check your eligibility, on the basis of your credit history. Cred has a tie-up with credit bureaus like Experian and CRIF.
  • If your credit score meets the standards of cred then you will receive an OTP to proceed further

register on cred app and get your credit score

If your membership is rejected, improve your credit score and apply after a few months again. It may also happen that you are using multiple mobile numbers for banking, so try again using another number. So, if you have just got your credit card some weeks back, please wait for a couple of months before you apply.

Step 3 – Add your credit cards 

Once registration is successful on the CRED app home page all your Credit Cards would be displayed. You just need to verify these cards by entering the last 4 digits of the card. To ensure the active status of these cards, cred will instantly deposit Rs. 1 to each of the cards.

You will not be asked to enter an expiry date or CVV of your cards which ensures the safety of this app.

Once successfully getting your card verified, you can exclusively earn rewards and scratch cards on every bill payment. Master card, American Express, Diners Club, and VISA cards are presently being handled by the CRED app.

5 benefits you get in the CRED app

Coming to the main point of getting rewards and benefits from the CRED app, below are the following things

  • Cashbacks on paying bills
  • Discounts
  • Free gifts and offers
  • Spending Analysis
  • Credit Score tracking

Let’s look at each of them

Benefit #1 – Cashback on paying bills

You may earn cash back (all called #killthebill) on every transaction. At the time of payment of more than Rs. 1000, you may be notified that you have won a scratch card and you might earn some amount which will be credited back to your credit card.

rewards earned on cred

Benefit #2 – Discount Offers

Now, this is the major part of the benefits. CRED app has associated with various brands and it offers you some discount (cash discount or percentage discount) when spending a particular amount.

For example one of the offers is a “20% discount on the next 20 orders from BOX8”, so you can see that you will get 20% on the Box8 for a long time, but you still have to pay the rest amount. So even if you are getting a discount, you need to SPEND on it. So these discount offers are truly good only when you are anyways going to spend money on these brands.

Example of a discount offer on a CRED reward

Sometimes, it may happen that these offers also give you a chance to experience things which you might not have done without a discount, so technically it’s beneficial in that manner, but still, spending has to be done.

Benefit #3 –  Free Gifts and benefits

There are some rewards that are truly free for you by burning some coins or gems. You don’t have to pay anything to get the benefits. These I personally think are the real benefits in a way, because you are not spending anything out of pocket, but just availing an offer.

Below you can see an example, where you can burn 2,00,000 coins and get a pass for 2 people Bacardi NH7 weekender event and even lounge access. Apart from that, I have shown 3 more offers for complimentary benefits without paying any extra from your own pocket.

Free benefits from cred app

So you can keep collecting the coins and wait for the right offer or reward to arrive which is useful for you.

Benefit #4 – Spending Analysis

One small benefit of the CRED app is that you get some insights into your spending pattern and the history of your credit card payments in one single place. This is good for those who have multiple credit cards and want some visibility on how their spending is happening.

Spending Analysis on CRED

Benefit #5 –  Credit Score Tracking

CRED app will keep showing your credit score from time to time, so this will help you to stay motivated to make timely credit card payments and you can also keep a track of how your credit score is moving over time. Right now CRED has done a tie-up with Experian and CRIF and pulls your credit score from both places.

Credit Score from Cred app

How to make payment in the Cred app?

Paying credit card bills via the CRED app is very easy, just click on pay now, enter the amount and click proceed. Nowadays the bill amount along with the minimum due amount automatically gets pre-populated. You can make payment via debit card/net banking (NEFT/IMPS) or UPI. It may take some time to reflect on the money credited to your credit card account.

On Completion of Bill Payment of your Credit Card, you will be rewarded with CRED Coins and Kill Bill Scratch Card which you will have to redeem.

Credit card bill payment on CRED app

Is the CRED app safe?

I am sure that you must be having this question about the safety of this app because you are putting your credit card details and authorizing the app with all details.

First, this is this app is founded by Kunal Shah, the person who started Freecharge and the startup is heavily funded. The past record of the founder is intact so you can trust the company.

Next point is that the CRED app never asks you to provide the date of expiry or CVV on your credit cards, hence you are not giving any critical information to this app.

Then, you should know that when you install any other app, those apps also get various permissions like reading your SMS, making calls on your behalf, tracking your activity etc, and this app is nothing different from others.

If you want, you can deny access to emails and messages then you won’t be able to receive a notification on due dates and also you won’t get any expense analysis.

Nothing is FREE in this world

While it feels great to get great offers and benefits and freebies, remember that nothing is FREE in this world. Behind everything which looks amazing, there is a business model and the reason why you get those free rewards and offers.

You should be aware that CRED or any other coupon company does various tie-ups and associations with brands and companies and acts as a lead generation company. You are nothing but a lead to some other company and CRED is helping in growing sales for the other party.

They will mostly get something back in return and that’s the business model. Nothing wrong with it, but you as an investor should be aware of what you are getting into.

The discounts and awesome benefits you get from CRED or any other similar app are basically tempting you to spend on the pretext of a “great deal”. If you spend on something which you originally did not intend to buy then it’s an extra expense for you at the end of the day. The coupons are pure rewards only when you were anyways going to spend on something and if you get an additional discount on the deal.

So, we need to be conscious while spending and getting discounts by using CRED coins, it should not happen that you are spending on some unwanted stuff to just redeem Cred coins.

Let’s take my example, I attended two live concerts in Pune, VIP pass of Rs. 5,000 each. No doubt I just paid Rs. 4,000 (Rs. 2,000 each) instead of paying Rs. 10,000. But, if this reward would not be in the pictures so, I would have never gone to that concert and saved Rs. 4,000.

Download the Cred App from here

Who should use this app?

The app is more suitable for the below-given categories of credit card users –

  1. High credit card bill payers
  2. People living in metro cities/tier 1 or 2 cities (most of the rewards are dining out or live concerts)
  3. People who pay credit card bills before the due date (no reward on late payments)

Do let us know if you have any comments or questions regarding the app?

How NRI’s should plan their investments in India?

Are you one of the NRI’s who wants to know if you should invest your money in India and how to do it? Then this article is a good place to start with.

There are close to 3 crores NRI’s and PIO from India in different parts of the world, however, this post is mainly for those NRI investors who go out of India for 2-10 yrs and will mostly return back after few years of work.

Generally, there is a perception that NRI’s make a lot of money outside India as they are paid in Dollars and Dirhams! While this is true in general, one can’t deny that their expenses are also high and their life out of India is challenging as it’s a different city, culture, and environment overall.

NRI’s earn well, spend well and in most cases also “save” a decent amount of money every month. Even if one some is saving $2,000 in USA it’s close to 1.5 lacs a month after all. So the first challenge is to “save” money while you are NRI and the second one is to invest it properly and manage it well, especially if you are have limited time in your hands as an NRI.

What a person can save in India in 5 yrs, many NRIs can do that in just 1 yr – which means that if an NRI plans well – he/she can do financially very well in 8-10 yrs and come back to India semi-retired or fully retired.

In this article, we are just going to do some conversation regarding the various options available to NRI’s for investments and why they should choose India for their investment purpose. I will not cover too many technical rules or aspects related to investments in this article and will keep it quite too the point.

Which bank account to use – NRE or NRO?

A lot of NRI’s keep using their saving bank account for many years, without realizing that it’s illegal. The moment you become an NRI, one needs to convert their savings bank account to NRE or an NRO account. Or one can open a new NRE/NRO account if needed.

NRE account is a bank account where the money is full repatriable – which means that you will be able to take out all the money back from the NRE account and use it in a country where you are residing. It’s an account where you can deposit both your foreign and Indian income.

On the other hand, the NRO bank account is only partially repatriable and you can only deposit your Indian income in this account.

So depending on your situation and income type, you need to open these accounts. One can have any number of NRE/NRO accounts if required. There are too many aspects you need to consider between NRE / NRO account, which is explained in the table below

[su_table responsive=”yes”]

Comparison NRE Account NRO Account
Income can be Deposited Foreign earnings and Indian Earnings Only Indian Earnings
Meaning Tax-Free Taxable
Repatriability Fully Repatriable Partial (interest fully and principle within set limits)
Joint Account Can be opened by 2 NRI’s Can be opened by an NRI along with another resident or NRI’s
Deposits and Withdrawals Can deposit in foreign currency, and withdraw in Indian currency Can deposit in foreign as well as Indian currency, and withdraw in Indian currency


Click here to learn more about NRI investment services by Jagoinvestor

4 reasons why NRI’s should invest in India?

Should you be investing your money in the country where you are residing or in India? Does it make sense to earn and stay in the US or the Middle East, but invest all that money in India? Many NRIs are confused about this, so I will just give you 4 small points which you should be aware about.

Reason #1 – India is one the fastest growing and a stable Economy

Note that India is one of the fastest major economy and quite a stable country compared to many others where NRI’s live. It’s important to make sure that your money is invested in the country which is stable enough. On top of that, you also help in growing the foreign exchange of your country.

Reason #2 – High-Interest Rates

Compared to many developed economies, the interest rates or “returns” you can get in India is quite good. Japan has negative interest rates and the US has not more than 2-3%. Many NRI investors make the mistake of keeping too much money in the bank accounts outside India and earn very little interest rates.

Reason #3 – Because you understand the investments in India

There is a high probability that you already understand various Indian investments options and financial products. Also, you will never fear what happens to your money because there is a sense of familiarity with India’s markets and financial ecosystem.

Reason #4 – Mostly you will be back to India

A vast majority of NRIs return back to India after working for a few years outside and finally use all their investments back in India. That’s one strong reason why you should invest a major part of your money in India itself.

I don’t mean to say that no investment products outside India are better than Indian financial products. There will surely be options which can be looked at, please do that in case you feel you want to.

What options do NRI have for investments in India

Quickly, let’s see what various options are where NRI’s can put their money for short – long term. This is not a guide which will give you very detailed information, but a quick commentary of what the option is all about.

#1 – Bank NRE Deposits

Bank NRE deposits are one of the wonderful choices an NRI can make. The interest you earn on NRE deposits is tax-free and it’s a simple product that gives you decent risk-free returns. You can choose the NRE deposits for some part of your investments if you don’t want to complicate things and are investing for less than 5 yrs.

Many NRIs take a loan from the local banks at low-interest rates and invest in NRE deposits and earn the margin. See if this is a profitable thing to do in your case of not.

#2 – Real Estate

One the hot favorite for NRIs is real estate in India. Real estate investments require big-ticket investments and many NRI’s have that. Even if you are buying a flat or land on installments, it works well for NRI’s are they have a big disposable income per month. One of my close friends also invested in the Hiranandani project in Bangalore by making a down payment because they knew that the installments to be paid will be easy on the pocket with NRI income.

The only negative side is that many NRIs choose real estate just based on the limited information sitting outside India or in a hurried manner. So make sure you take your time in researching the property and take decisions slowly. As it’s a high ticket transaction, its highly recommended to hire a real estate lawyer, pay them fees and get all the work done like title search, property inquiry. If needed go with a real estate broker who can manage everything for you!.

One more thing NRI should know is that they are allowed to only buy residential or commercial real estate, but not agricultural properties.

#3 – Insurance Policies

There are many Insurance policies (which are actually investment polices) that are marketed well for NRIs. These, in my opinion, are to be carefully chosen as many traditional products can turn out to be dud investments and a very bad choice of long term investments. Some ULIP’s in the market have got reintroduced with lower charges and much better structure – so please choose them after a lot of studies and only for the long term.

I would strictly advise against traditional investment option which does not have exposure to equity in them because they are not better than normal NRE deposits.

NRI’s can and should buy the pure insurance policy (term insurance) if they require it.

#4 – Direct Equity

Direct equity is a good choice for NRI investors, provided they know the equity game and are able to pick the right stocks with proper research (either on their own or on someone’s advice). Make sure you do not over diversify your stock portfolio, because with too much money you may go on a shopping spree, which will make your portfolio very complex and with bad stocks.

If you want to do equity and want to take high risk, you can also look at PMS. If you want help in PMS, our team can help you out with that. Note that in order to invest in equity, an NRI needs a PIS permission (portfolio investment scheme). These are generally done by your broker or trading account provider and you don’t have to worry about it.

#5 – Mutual Funds

Mutual funds are quite hot these days among NRI’s and it surely is one of the best choices for investments, provided you have proper guidance about it.

In Mutual funds, you have two choices – Equity mutual funds and Debt Mutual funds.

Equity mutual funds are long term financial products that can deliver extremely good returns if managed well. Those who are ok with volatility in their portfolio and want very tax optimized inflation-beating returns for their long term goals, for those NRI’s mutual funds are a very good choice.

Even Debt mutual funds are a very good choice for those NRI’s who do not want to get into equity risk and want alternatives to bank deposits and bonds. Debt mutual funds are quite a good option even taxation wise if you are ready to invest for more than 3 yrs.

[su_table responsive=”yes” alternate=”no”]

Taxation Equity Mutual funds Debt Mutual funds
Short Term Capital Gain (STCG) (Before 1 yr) Taxable @ 15% Taxable as per Income tax slab rate
Long Term Capital Gain (LTCG) (After 1 yr) Taxable @ 10% where LTCG>1 lakh (No indexation benefit) Taxable @ 10% without indexation or 20% with indexation


NRI’s from USA and Canada can also invest in mutual funds, but only with some limited mutual fund houses due to FATCA compliance. Here is a detailed guide on NRI’s investments in mutual funds

We at Jagoinvestor manage more than 140 NRI families’ investments in mutual funds. If you want to explore what we have to offer, please do let us know by clicking here and schedule a phone call with us.

#6 – Bonds and NCD

NRI’s can also invest in various bonds and NCD’s which are issued from time to time. These instruments have fixed interest which you can get every year credited in a bank account and you get your principle on maturity. The liquidity has to be compromised in these instruments as getting out of these before maturity becomes very tough even if these are tradable in the secondary market.

#7 – PPF

PPF is a choice for those NRI investors who already had it opened while they were in India because an NRI can’t open a fresh PPF account. Also, PPF is going to be a limited time product as one can’t be extended beyond 15 yrs.

#8 – NPS

NPS is another choice for your long term investments if one wants equity exposure in their portfolio, and pension benefits embedded into the product itself. Only NRI’s who are Indian citizens can invest in NPS. PIO and OCI are not eligible for opening the NPS account. In NPS, you get choices between equity investments, govt securities, and other fixed-income instruments.

Note that in NPS your savings get locked in till your retirement and only after that you get a part in a lump sum and rest is used for a pension. So choose NPS if you are very clear that your retirement is going to be in India.

KYC compliance and taxation For NRI’s

Note that once you become an NRI, there are lots of compliance which has to be followed by you. There are limits on where you can invest and where you can’t? Even the taxation for NRI’s is different and rules regarding TDS are different. We are not going into detail in this article regarding this as its out of scope.

How to avoid double taxation for NRI investments?

A lot of countries have DTAA agreements (double taxation avoidance agreement with India. In the case of NRIs – one can avoid paying double taxes in country of residence and India due to these agreements. You can get an equivalent deduction if DTAA exists between both countries.

Let me give you an example – In USA, a person has to pay the income tax on global income, so if an NRI has Rs 1 crore of FD in India they will pay the tax in India as well as in USA, but because of DTAA they will be avoiding it. There is paper work involved here, but you can surely save the double taxes.

When should an NRI invest outside India?

While India is a great place to invest for NRI’s overall, there may be certain life situations and some cases where investing in the country where you are working may be a good idea. There may be certain countries that might also be offering similar or better interest rates and returns compared to India. However, makes sure you consider the safety and return of your capital while you are investing along with tax to be paid.

Do let us know if you have any more questions related to NRI’s investments in India? Share your questions in the comments section.