Guaranteed returns. Minimal risk. Tax benefits. Small investment requirements. What more could an investor ask for?
A host of small savings accounts, collectively known as “post office savings schemes”, offer these benefits. Some of them include the National Savings Certificate (NSC), Public Provident Fund (PPF), and Monthly Income Schemes (MIS). These post office monthly savings schemes are suitable investment vehicles for a large number of middle-class Indian investors who choose safety over monetary returns.
With a tenure of 15 years and the possibility of infinite extensions of 5 years at a time, these investments don’t promise high returns or flexibility of withdrawals. But they promise stability and peace of mind.
So, is this the perfect NRI investment opportunity in India? Unfortunately, no. As an NRI, you can’t invest in these schemes.
Why can’t NRIs invest in post office schemes?
The reasons are very explicit as to why you can’t invest here. One possible reason might be that the government of the country intends to keep these schemes as a sort of social security measure for resident Indians—and financially challenged resident Indians, at that. You don’t fit in this scheme of things, as of now.
Is there any channel open for NRIs?
Yes, there are options, although not direct. You can invest through your parents or other relatives/friends who are resident Indians. And you would have to invest in their names. But don’t forget that apart from PPF, all post office savings schemes come under the tax net.
Is the option a big draw?
You do have other investment options that promise tax-free income, like NRE fixed deposits. You also have alternative investment options like tax saving bonds, property, IPOs, mutual funds, etc., which promise good returns while not being too risky.
However, if you become an NRI after starting a post office savings investment scheme, you may continue it as long as you want. Your contributions will attract the same provisions as those of a resident Indian.
