NRIs can park their liquid money/fixed deposits in the Non Resident External or Non Resident Ordinary account. NRE accounts allow for repatribility while investments in the NRO accounts mean that the money cannot be taken out of the country.

NRIs can purchase shares and mutual funds under general exemption granted by the Reserve Bank of India. However, in the USA, the SEC prohibits anyone from investing in securities that have not been registered with it. Hence, many mutual funds (especially those with US origins/offices) do not allow investments from the USA NRE accounts. However, fund houses that do not have an office in the USA do allow investment in their mutual funds.

NRIs, if they have insurable interest, can purchase insurance from Indian insurance companies. Hence, they can buy health and/or life insurance on self as well as on relatives/dependants. With the innovation of ULIPs, they can also ride the equity or debt markets in India based on the insurance premium that they pay. Typically, for life insurance, if they are interested in taking term insurance, they should compare the rates across both the geographies and choose the one that is the cheapest.

Real estate is the preferred investment vehicle for many NRIs. It requires making the investment decision one time: you don’t need to keep revisiting the decision for the medium to long term. With the availability of leverage, it means that they can get handsome returns on their equity investment. However, there are many cases of slips between the cup and the lip in the case of investment in real estate projects, the least of them being liquidity, timely completion and right titles. With the advent of real estate mutual funds, it should provide an easier and safer access to this asset class.