How can a NRI create his Contingency fund ? Where to invest ?

POSTED BY Shaahul Hameed ON December 30, 2013 12:53 pm COMMENTS (6)

I am a NRI and creating a corpus for Contingency Fund around 7 Lacs. I am planning to invest this amount 50:50 in Sweep FD and Liquid/Debt Fund. I have picked the following Liquid/Debt Funds and planning to invest in one of them. Can anyone point which will be the right pick?

  • SBI Premier Liquid Fund – Regular Plan
  • HDFC Cash Management
  • Quantum Liquid Fund.

2) Which option should I choose(Dividend/Growth) for better taxation purposes.

Can members please advise on this

6 replies on this article “How can a NRI create his Contingency fund ? Where to invest ?”

  1. Shaahul Hameed says:

    Dear Ashal, Thanks for your valuable advise and detailed explanation.
    I will transfer and create a corpus in AUD for fast access of money.

  2. ashalanshu says:

    Dear Shaahul, emergency fund is meant for emergency and that should be your prime importance. Do not try to play with fire for your own good. Trying to earn a few buck extra is everybody’s wish but there should be a limit between what should be and what should not be wished for. Also taxation issue for your MFs (liquid ones) ‘ll create another headache for you as you w’d pay 30% TDS and then you w’d have to file ITR to claim this amount (if STCG happens).



  3. Shaahul Hameed says:

    Thanks for replying Ashal. I will think about it for sure.

    I can transfer it now and keep it my Australian bank account but it won’t be earning much here since the interest rates are low(around 2.5% to 4% PA)

    I understand the sole purpose of emergency fund is liquidity and non negative returns but I am eager to know if there is a way of investing in India which could achieve liquidity and decent returns.

    Sorry for dragging this along.


  4. ashalanshu says:

    Dear Shaahul, why are you so sure that when the emergency ‘ll knock on your door, you ‘ll be in the position to transfer the funds from India within few minute. It ‘ll be hassle free, free of cost, no transaction delay…………………

    Please think over it. Also there ‘ll be taxation issue for liquid fund in India.



  5. Shaahul Hameed says:

    Dear Ashal,

    I am planning to invest these funds though my NRE (FD and Demat) account and transfer it back when needed.

    I am also planning to create a emergency fund at a later point of time in AUD for 2 or 3 months.

    I am having a home loan and planning to close it before i create a AUD emergency fund. till then i can treat the 7 lacs as contingency fund.

    Please advise whether it is the right approach.


  6. ashalanshu says:

    Dear Shaahul, being NRI, how w’d you use these funds for yourself out of India?



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