Can OCI invest in Indian Mutual Funds?

Last Updated: 17-Oct-2022

Short Answer

Yes, Overseas Citizens of India (OCI) can invest in Indian mutual funds. Checkout ways how an OCI can start investing in the Indian mutual fund industry.

Detailed Answer

Who is an OCI?

An OCI is an Overseas Citizen of India. He/she must have been an Indian citizen on or after 26th January 1950 or if his or her grandparents were Indian citizens on or after 26tth January 1950. They must abide by the Government of India Act 1935.

What is a mutual fund?

Mutual funds are generally managed by professional fund managers. It has a portfolio within itself. It may consist of shares, bonds, fixed interest, or any financial instrument based on its objective.

An investor who does not have much time to analyse, invest and re-balance their portfolios, can buy one mutual fund of their choice, instead of constructing their own portfolio. For this service, they need to pay a percentage of the investment balance of management fees.

Can OCI invest in Indian Mutual Funds?

Overseas citizens of India are allowed to invest in mutual funds. In addition to mutual funds, they can also invest in start-ups, the National Pension Scheme, government securities, equity and fixed deposits. Investment can be made via a non-resident external or non-resident ordinary account via repatriation or a non-repatriation basis based on your choice. For repatriation you need a NRE or a FCNR bank account.

Benefits of investing in Mutual funds

  • It is a liquid investment option, unlike a term deposit.
  • Offers diversification within one fund
  • Professionally managed
  • Low cost
  • You need not spend time analyzing the markets. Suitable even for a novice in the investment markets.
  • Automatic re-balance

OCI Investing in Mutual Funds

India is one of the fast-growing economies and the government is making Indian markets conducive for investors to make it a perfect investment destination. The Non-residents of India, People of Indian origin and overseas citizens of India have always opted for Indian markets.

Of the available investment options, mutual funds are one of the best options as they are managed by professionals, offer the prospect of earning better returns and are cheap.

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Categories: Mutual Funds
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