NRIs have several mutual fund options in India. The best choice depends on your country of residence, risk tolerance, and investment horizon.
Fund selection is secondary to category selection. The category determines risk, returns, and tax treatment. The specific fund within a category matters less .
Two significant developments affect NRI investments in 2026. GIFT City mutual funds offer dollar-based exposure with tax advantages. Several asset management companies still restrict investments from US and Canada-based NRIs due to FATCA compliance .
Key Considerations Before Selecting a Fund.
Country of residence. US and Canada-based NRIs face restrictions. Only specific AMCs accept investments from these countries. Most other countries have simplified procedures .
Tax treatment. TDS applies on mutual fund redemptions for NRIs. The rate depends on fund type and redemption date. Equity fund LTCG TDS is 12.5% (above ₹1.25 lakh). STCG TDS is 20%. Debt fund TDS is 30% .
Repatriation. Investments through NRE accounts are fully repatriable. NRO accounts have an annual repatriation limit of USD 1 million .
Recommended Fund Categories.
|
Category |
Best For | Typical Returns |
Risk Level |
| Flexi Cap Funds | Core long-term holding | 17-22% (5-year CAGR) | Moderate |
| Large Cap Funds | First-time NRI investors | 12-15% (5-year CAGR) | Moderate |
| Index Funds | Passive, low-cost exposure | Matches index returns | Moderate |
| GIFT City Funds | Dollar-based investing | Varies by strategy | Low-Moderate |
| Multi-Asset Funds | Built-in diversification | 14-18% (5-year CAGR) | Moderate |
Flexi Cap Funds. All-Weather Pick.
Flexi cap funds have no market cap allocation restrictions. Fund managers can shift between large, mid, and small caps based on market conditions .
Why it works. One well-chosen flexi cap fund can serve as a core portfolio holding. Several flexi cap funds have delivered 17-22% CAGR over 5-year periods .
Example. Parag Parikh Flexi Cap Fund also invests in global stocks, offering diversification beyond India.
GIFT City Mutual Funds. New Option for NRIs.
GIFT City funds are based out of India’s first International Financial Services Centre in Gandhinagar. They are regulated by the IFSCA .
Key advantages. You invest in US dollars. Returns stay in dollars. No rupee conversion risk. No TDS on many income types. Capital gains relief on several fund categories. No GST on management fees .
Who it suits. NRIs who want to avoid rupee volatility. Those seeking lighter India tax-filing obligations .
Limitation. Not all fund types are available. Mostly Alternative Investment Funds and feeder funds.
Platforms for NRI Investing.
|
Platform |
NRI Support | US/Canada | Cost |
Best For |
| Kuvera by CRED | Yes | No | Free | Goal-based planning, tax tools |
| ICICI Direct | Strong | Yes | Varies | Full-service, 3-in-1 account |
| FundsIndia | Yes | Yes | Varies | Wide product range, advisory |
| SBI MF | Yes | Check with AMC | Varies | Trusted AMC, large AUM |
Kuvera by CRED is a SEBI-registered investment adviser. It offers goal-based planning, tax harvesting, and family accounts at zero cost . Direct plans only. The platform provides Surplus, which moves idle cash to liquid funds for higher returns.
NRI KYC on Kuvera can take 7-10 days. The platform does not accept US or Canada-based NRIs . Investments in mutual funds via Kuvera are held directly with AMCs in the investor’s name .
Tax Summary for NRIs.
| Fund Type | Holding Period | Tax Rate |
TDS Rate |
| Equity Fund | Less than 12 months | 20.00% | 20% |
| Equity Fund | 12+ months | 12.5% (above ₹1.25 lakh) | 12.50% |
| Debt Fund | Any period | Slab rate | 30% |
| International Funds | LTCG | 12.5% (above ₹1.25 lakh) | 12.50% |
FAQs
1. Which mutual funds are best for US/Canada based NRIs?
Limited options. Sundaram Mutual Fund, UTI Mutual Fund, and BNP Paribas accept investments from these countries. Check each AMC’s policy before investing .
2. What is the minimum investment for NRIs?
₹500 for most mutual funds. Some funds accept ₹1,000 or ₹5,000 as minimum .
3. What is the difference between NRE and NRO investments?
NRE account investments are fully repatriable. NRO investments have an annual repatriation limit of USD 1 million .
4. Are GIFT City mutual funds better than regular funds?
For NRIs seeking dollar-based exposure and tax advantages, yes. For those with India-based goals and rupee expenses, regular funds may be simpler .
5. Does Kuvera accept NRI investments ?
Yes. But not from US or Canada-based NRIs. NRI KYC takes 7-10 days .
