Fixed Deposits Versus Debt Funds for NRIs

Fixed Deposits Versus Debt Funds for NRIs

Are you a Non-Resident Indian (NRI) and want to invest in Indian fixed income instruments?

Well, than there are two basic fixed income products for NRIs in India.

01) Bank Fixed Deposits

02) Debt Mutual Funds

I will personally advise NRIs to go for debt funds rather than Bank FDs. This is because there are several advantages of debt funds over bank FDs.

One commonest advantage of debt funds is that, they don’t have any lock-in period. You can anytime enter or exit from the debt funds. While on the other hand, the bank FDs have a lock-in period so you can not exit from Bank FDs without penalties.

Another advantage of investing in debt funds is that, debt funds can invest in both the private and public debt securities while as a retail investor you can only invest in the bank debt paper.

The commercial debt paper is out of rich of the routine average investors. But a debt mutual fund can invest in corporate debt papers.

Thus, overall, a debt mutual fund can give you much more returns than the simple bank fixed deposits.

The risk that is associated with the debt funds is also very less as your money is diversified among various government and private sector debt papers but when you invest in Bank FD, you have invested your money in that single bank.

Thus, Debt funds are superior than the bank Fixed deposits for NRIs. There are literally hundreds of debt funds available with different fund houses in India.

Simply visit Valueresearchonline.com and choose a 4/5 star rated debt mutual fund and invest in debt funds rather than fixed deposits.