You are NRI have plans to Retire In India!!!
You have plans to return back to India someday and dream of living a comfortable retired life.
You are not the only one who feels!!!
· You are earning well but not sure how to channelize your earnings for the right investments.
· You have built wealth but not confident whether it will last your retired life or help enjoy the same lifestyle.
· You are doing investment hearsay on your friends and family advise.
· You are not sure your banker is providing the right advise or making you invest in what is good for the bank.
· You are confused with the taxation laws, inflation, kids education, pension plans, retirement savings because rules keep on changing
· You feel you are running in circles to know your financial readiness.
Connect with us, we have answers to your queries, we walk with you and help you achieve financial freedom.
A checklist for Investing in Mutual Funds as an NRI
A to do list on how to manage your Mutual Fund investments when your residential status changes from Resident to Non-Resident or if you are already an NRI.
1. Bank Account
- Convert your existing Resident Savings Accounts to NRO (Non-Resident Ordinary A/C). This type of bank account allows for receiving funds in both Indian and Foreign Currency. This is where you can maintain and manage your income earned in India such as rent, dividends, pension etc.
- Set-up an NRE Account and use that to invest funds generated from your Overseas income: This type of bank account allows for receiving funds only in Foreign Currency. Except for Indian Currency received from specified sources such as proceeds from Mutual Fund redemptions.
2. KYC: Update your KYC status from Resident individual to Non Resident (NRI)
- You can get this done by asking your previous intermediary to update your KYC status in the centralized KYC database, OR
- Visit the nearest CAMs/Karvy office when you are in India. Submit the documentation in person.
- KYC Update Documentation is simple and usually includes a Proof of Overseas Address and a copy of your Passport
3. Update your Non-Resident(NRI) status in all your existing Mutual Fund folio(s)
- All your existing investments should be tagged to your NRO account and your residential status should be updated in all your Mutual Fund Folio(s),
- AMC(s) do not accept this update request electronically. The fastest option: visit the nearest CAMs/Karvy office when you are in India and submit the documentation in person. An account statement(NRO) copy and a refresh of your KYC information is adequate and within a few days.
4. Further investments as an NRI
- Use the NRO account and your updated Folio(s) mapped to your NRO account for:
- Managing your existing investments
- Further Mutual Fund purchases made using funds generated from any continuing income in India.
- Use the NRE account and create new Folio(s) for Mutual Fund purchases made using funds generated from any continuing income in India.
- DO NOT: Invest in an Folio linked to your NRE account using your NRO account and vice versa as this inconsistency may lead to order rejection(s) by AMCs, redemption issues and even laborious/delayed refund(s) in case of an order rejection.
The above is only an indicative outline of managing your investments for when you become a Non-Resident. Please do not treat this as legal and tax advice. Do consider consulting A Tax expert to get expert advice most suited to your specific circumstances. Further, some of the content in this note links to external websites.
You are NRI have plans to Retire In India!!!
You have plans to return back to India someday and dream of living a comfortable retired life.
You are not the only one who feels!!!
· You are earning well but not sure how to channelize your earnings for the right investments.
· You are doing investment hearsay on your friends and family advise.
· You have built wealth but not confident whether it will last your retired life or help enjoy the same lifestyle.
· You are not sure your banker is providing the right advise or making you invest in what is good for the bank.
· You are confused with the taxation laws, inflation, kids education, pension plans, retirement savings because rules keep on changing
· You feel you are running in circles to know your financial readiness.
After having a professional career of 20+ years in some of the Leading Financial Services organization, we know how to answer your queries, make you comfortable and help you achieve financial freedom.
If you are KYC compliant and have an active Non-Resident Bank account, you can get started today on V3investments.in or call us on 9082010287
Here are a few steps which ideally must be adhered to as a part of the Seven Golden Rules:
1. Never Invest in a NFO (New Fund Offer): This is first rule and it means that you must never invest in a new MF which is being offered to you for ₹10.This is because at this stage the AMC has not purchased any companies and has no assets and not even sure the fund will be able to mobilise enough money from investor.
2. Invest in a Good Tract Record Fund: The fund that you invest must ideally be at least 5 years old. Even if the fund has not been a top performer, if it has managed to be in the Top Quartile (Top 25% of the funds), it is sufficient.
3. Invest in a diversified Equity Fund and not Sector Funds : This means that the fund that you invest in must have a selection of companies that cover the entire economy. Do not try to invest in Funds dedicated to Banking, Petro, Finance alone. The reason being that if at a particular time due to some Geo Political reason a particular industry suffers (like shipping and oil at this time), you may suffer long term losses. A well-diversified fund will have a selection from all sectors of the economy which will try to balance each other during any adverse economic situation, giving you a median return.
4. Apply as Expatriate or NRI : This part is specially applicable to the seafarers because by this mode you will be able to take your money out of the country in case you wish to pursue your higher education outside the country, take your competency exams in UK, Singapore etc. or even at a later stage wish to take up a Shore Job in some country. In some countries you are allowed to invest in MFs in USD itself. However it is not possible in Sri Lanka, Philippines and India where you have to invest in the local currency. This is the best feature of MFs. In India this will be possible only if you invest it out of your NRE account.
5. Share all the details in the Application form correctly : Many Investors are afraid of sharing complete information while filling application forms as they do not want any unwanted issues. Sharing complete information looks simple but many people rely on MF advisors to fill in details. Ensure your email address and mobile no is recorded correctly as it helps to receive all form of communication from the AMCs in whichever part of the world you are in.
6. Opt for Direct Credit to Bank (ECS) Mode : This means that when you sell or REDEEM your Mutual Funds or part of it, the proceeds will be credited directly to your Bank Account, this will not only ensure faster receipt of your money even if you are away. Do not opt for Cheque payment as it will be delivered to your home address and will expire if not banked within 3 months of issue. In today’s times and especially for NRIs this is a very safe mode since you can do the selling while on board.
7. Opt for Second Applicant / Nomination : This is true for most of the Financial Products and Bank Accounts. When you add a nominee it will only be helpful that our immediate kin whom we NOMINATE gets the funds after our death. Adding A SECOND APPLICANT will ensure that any paper work if required can be done while you are away. Apply on Either OR Survivor basis.
As you must have familiarized by now, that MFs provide you with a well-intentioned, risk diversified and simple method of investment. It is in our interest to understand and find the information available about investing in MFs. You can always consult a Mutual Fund Distributor to invest your hard earned money in the right Mutual Fund Scheme