A quick guide for NRIs wanting to invest in Mutual Fund

As a Non-Resident Indian or NRI, if you are looking for an investment option in India, investments in mutual funds can be a good option for you. It is one of the popular investment instruments, and investors prefer it to build wealth and diversify their portfolios.

Therefore, if you are wondering how can NRIs invest in mutual funds, read this blog, as it breaks down the entire process for mutual fund investments for NRIs in easy steps.

Quick Synopsis

• NRIs can invest in mutual funds in India through an NRE or an NRO account.
• As an NRI, you can invest either directly or via a POA.
• Your account must be KYC registered and validated with proper documentation.

How NRIs Can Invest in Mutual Funds?

Take a look at the following section, showcasing how can NRIs invest in Indian mutual funds:

Set up an Account

Set up a Non-resident External (NRE) account to invest your overseas earnings in a mutual fund. You can also opt for a Non-resident Ordinary (NRO) account with an Indian bank in your name and start investing in mutual funds. While both accounts allow mutual fund investments, an NRE account offers easier repatriation of your investment gains outside India compared to an NRO account.

Choose the Investment Method

Upon opening a bank account, you have two methods for investments. They include direct or self-investments or investments through a Power of Attorney (POA). Choose whether you want to invest by yourself or allow a trusted POA to invest on your behalf.

Complete the KYC Process

To obtain 'KYC Registered' status, a physical presence in India is required, as online verification is not available. From April 2025, you will also need to provide your Aadhaar Card as address proof to get 'KYC Validated' status.

Choose an Investment Platform

Once your KYC is registered and validated and you have a bank account, you can start investing through platforms offered by Asset Management Companies (AMCs) or registrar services like KFintech and myCAMS.

Redeem the Mutual Funds

If you want to redeem the earnings from the investments, your AMC or registrar will credit your overall gains from the investment to your registered NRE bank account. If you have opted for a non-repatriable investment, then the funds will be credited to your NRO account.

Eligibility Criteria for NRIs to Invest in Mutual Funds

After learning how can NRIs invest in mutual funds, take note of the following conditions for eligibility:

• As per the Foreign Exchange Management Act (FEMA), you are eligible to invest as an NRI if you are an Indian citizen living in a foreign nation.
• If you are an NRI with taxable earnings of more than ₹15 lakhs, you must stay in India for 120 days in a financial year.
• If you are an NRI who visits India and has taxable earnings in the country up to ₹15 lakhs, you must be physically present in India for 181 days in a financial year.  

Documents Required for NRIS to Invest in Mutual Funds

You will need the following documents handy to invest invest in Indian mutual funds as an NRI:

• Valid passport as proof of being an NRI.
• Residential proof in the foreign country as proof of address.
• Copy of your birth certificate as proof of age
• Aadhaar Card,  to get the ‘KYC validated’ status.

Tax Implications on Gains from NRI Mutual Funds

Your gains from NRI mutual funds are subjected to taxes, here is a quick guide to help you understand all about them.

Benefits NRIs Can Enjoy by Investing in Mutual Funds

NRIs enjoy a host of benefits by investing in mutual funds. Here are quick details on the same:

• As an NRI, you can follow a structured investment pattern by investing in mutual funds that allow you to capital gain with investment diversification.
• Other than the KYC process, you can manage your mutual fund investments and track their performance completely online.
• You can enjoy the benefits of rupee appreciation and earn more when the value of the Indian currency rises against foreign currencies.

Final Word

If you are wondering how can NRIs invest in mutual funds, the process begins with choosing between an NRE or NRO account, completing your KYC, and selecting a suitable investment platform, such as those offered by AMCs or registrars like KFintech and myCAMS.

While mutual funds offer long-term growth, they do carry market risks. For more stable and secure options, explore Fixed and Recurring Deposits on Stable Money, with interest rates of up to 9.10%.

Start your investment journey with confidence, download the Stable Money app now!