How can a Small NRI investor invest his money ?

POSTED BY Pranshu ON January 20, 2014 8:33 pm COMMENTS (17)

Dear Manish,

Firstly, I would like to thanks you for monitoring a great web page like Jagoinvestor and sharing your precious knowledge for the benefit of million people.

I am an NRI working in UAE from last 8 year. my age is 33 and till now I did not save anything neither invested in any market in other term I have 0% future plan. After regular visiting to your web page Jago Investor, I got an idea to invest some money for my future. As in UAE I am not working with a high salary market but I have my plan to invest approximately  5000/rs. monthly or may  be slightly less than that.

I would like to request you kindly guide me with lay man language as I am not strong in financial/commerce language, how I can invest this money and what kind of requirement is needed to invest this money. Please note that I have 2 account with HDFC bank one is NRI and another is Saving account. Can I use this account and this bank for opening my demat account and invest above mention amount on a monthly basis for long term investment.

Once again, thank you very much for making people aware for their future and educating them to plan something. In my case, if I will be able to plan something, all credit will go to you only, as I had never think about this side. For me, what I was understanding to keep money in NRI account or saving account is the saving but you change my concept.

Best regards,

Pranshu

17 replies on this article “How can a Small NRI investor invest his money ?”

  1. ashalanshu says:

    Dear Pranshu, you are out of India and any emergency situation occurs with your family members in India say hospitalization, an accident, a sudden illness. How do you plan to tackle these things which require an immediate attention in terms of a monetary fund. Got it. So you need to plan your emergency fund first. How much is too much for you, only you can decide. It may be 50000 Rs. or 1L Rs. or 2L Rs. Accordingly, start saving for this goal in bank RD.

    Thanks

    Ashal

    1. Pranshu says:

      Dear Ashalanshu,

      Thank you very much. I am really happy to be in touch of Jagoinvestor.com and helpful people like you.
      Best regards
      Pranshu

  2. seenujgs says:

    Pranshu,

    Emergency corpus shall constitute parking your 3-4 months expense money in liquid form to meet unforeseen expenses. Although some people debate about number of months, its depend on individual and previous expenditure pattern.

    I usually keep 4 months expense parked in savings bank account and I comfortable with it. One can also park in short term liquid fund to earn higher interest compared to bank savings interest rate.

  3. ashalanshu says:

    Dear Pranshu, as you are NRI, in my personal opinion, first of all invest 5K Rs. mly in a RD linked with your NRE account. Being NRE, it ‘ll be tax free to you. First of all build an emergency corpus. How much emergency corpus you need, only you can decide. So chose your RD term as per your needs.

    Thanks

    Ashal

    1. Pranshu says:

      Dear Ashalanshu,

      Thank you very much for your reply. May I know what is emergency corpus? and how it can be built? what will be requirement for this and how much money I need to put for this.
      Sorry for lots of question! but I m very new in this market and trying to gain maximum knowledge before I start taking risk.
      Regards
      Pranshu

  4. Pranshu says:

    Dear Seenujgs,
    Thank you very much for your kind comments. I would like to know if I can invest my in mutual fund and can get immediately if I need it. also I have my NRI account in HDFC bank as well as my wife saving account in same bank. Which account i should use as i think for NRI there is some tax for investing in Indian market. Can I use same bank for mutual fund investment, “do I need to open any Demat account for mutual fund” which mutual fund is best to buy for small investor.
    Regards
    Pranshu

  5. seenujgs says:

    Pranshu,

    Most of NRI can save decent amount. How much you can save per month after all house hold expense ?
    Then you can go for fixed deposit in banks if you need money for a short term period (2-3 years). Remember that your each and every financial investments should have goals. These two go together always.
    Let me know what your thoughts are.

  6. arjunp3000 says:

    Hi Pranshu,

    Yes, the right way to go about investing is to first identify your goals and classify them into short term or long term goals.

    Then you can start investing a little bit every month towards your sisters education or your brothers wedding. An SIP in mutual funds is a great way to do that. Considering your age you can divide your total monthly investment by investing 40% in Equity Large Cap Funds, 40% in Balanced / Equity oriented Funds and the remaining 20% in Debt funds.

    This should give you enough exposure to maximize your gain while maintaining relatively medium risk.

    Investors such as yourself who reside outside India and who would like to invest in Indian markets would find http://www.fundsindia.com very useful for creating SIP investments.

    Hope this information was helpful

    Arjun
    Fundsindia.com

    1. Pranshu says:

      Dear Arjun,
      Thank you very much for your kind comments. I would like to know if I can invest my money in mutual fund and can get immediately if I need it. also I have my NRI account in HDFC bank as well as my wife saving account in same bank. Which account I should use as I think for NRI there is some tax for investing in Indian market. Can I use same bank for mutual fund investment, “do I need to open any Demat account for mutual fund” which mutual fund is best to buy for small investor.
      Regards
      Pranshu

      1. arjunp3000 says:

        Yes, you can invest in Mutual Funds and redeem your investment immediately. However, there are certain funds that require that you keep your money for three years. If you think you would require the money in the near future then you can avoid investing in those funds. You can speak to our financial advisors for free and get a portfolio recommended by them based on your needs.

        Placing an investment or a redemption can happen on the same day provided the order is made before 2:00PM. Otherwise your order will be executed on the next working day.

        There is no need to open a DEMAT account to invest in mutual funds. You can use your existing NRI Account with HDFC bank to invest in mutual funds.

        1. Pranshu says:

          Dear Arujun,

          I would like to invest for Mutual fund for Rs. 5000/- monthly basis. If I am using my NRI hdfc account for investment, is there any extra charges HDFC will take on each transaction or is there any taxes applicable for NRI account?
          One more question, as I mention above Rs. 5000 monthly and in some cases if I don’t invest few month, is there any problem in this case or I can invested when ever I have money.
          Regards
          Pranshu

          1. arjunp3000 says:

            SIPs with FundsIndia can be paused whenever you want to. You can also setup reminders where our customer support will call you and remind you when an SIP is due. There will be no problem if you miss an SIP.

            HDFC Bank will not charge you anything extra for transactions related to Mutual Funds.

            Reg,
            Arjun
            FundsIndia.com

          2. arjunp3000 says:

            Investments made from a NRI account will be subjected to TDS at the time of redemption.

            Reg,
            Arjun
            FundsIndia.com

  7. seenujgs says:

    Pranshu,

    Your salary is Rs 25000 per month and I assume you save Rs 15000 per month after all expense. Out of Rs 15,000 I suggest you to have 20 % exposure with equity and 40 % fixed income ( RD,FD), and 20% in real estate. 20% for retirement.

    Let me know what your thoughts are.

    1. Pranshu says:

      Dear Seenujgs,

      Thank you for your reply. However I do not have the monthly saving of Rs 15k and don’t think also to invest in Real state at the moment. I want to invest my money somewhere, where I can get good return as well as I can get my money immediately if I need for urgent work like my sister’s wedding or for my brother’s education.

  8. ashalanshu says:

    Dear Pranshu, what are the details of your family, income, no. of dependents in India? Any asset or investment?

    Thanks

    Ashal

    1. Pranshu says:

      Dear Ashal, As I mention above, till n0w I did not buy any land or any investment in India. I am married with one daughter & my wife is house wife. I don’t have a family income but I am earning a monthly salary of approximately Rs. 25000/-
      but I want to invest in mutual fund or long term share market. please assist me.
      best Regards
      Pranshu

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