As a Non-Resident Indian (NRI), planning for retirement can be challenging due to varying tax laws, currency risks, and global investment restrictions. However, with the right strategies and well-chosen retirement funds, NRIs can build a secure financial future. In this guide, we’ll explore the best retirement funds for NRIs, the key factors to consider, and how to invest from abroad.
✅ Why Retirement Planning is Crucial for NRIs
Many NRIs live abroad for decades, but most eventually return to India. Even those who don’t plan to return often maintain strong ties to the country. This makes retirement planning in Indian assets a preferred choice. Here’s why it’s essential:
| Reason | Explanation |
|---|---|
| Currency Diversification | Investing in INR protects against currency depreciation of foreign earnings. |
| Inflation Hedge | India’s cost of living is rising – planning early ensures a stable income later. |
| Tax Efficiency | Indian retirement funds may offer better post-tax returns than some foreign options. |
| Family Security | Building a retirement corpus helps support dependents back home. |
🧾 Types of Retirement Investment Options for NRIs
Before diving into specific funds, let’s understand the major retirement investment routes available for NRIs:
1. Mutual Funds (Retirement-Oriented)
NRIs can invest in retirement-focused mutual funds regulated by SEBI. These funds offer long-term growth, are tax efficient, and ideal for SIP-based investing.
2. National Pension System (NPS)
NRIs can open an NPS account and contribute until the age of 60. The NPS offers a combination of equity and debt, with tax benefits under Section 80C.
3. ULIPs (Unit-Linked Insurance Plans)
Though expensive, ULIPs offer both insurance and investment. NRIs looking for a bundled approach may consider these.
4. Fixed Deposits (FCNR/NRE/NRO)
Low-risk option. Best for conservative investors nearing retirement. However, the returns may not beat inflation in the long run.
5. Global Retirement Plans
For NRIs settled in countries like the US, UK, or UAE, investing in global pension schemes can also be an option – but that’s beyond the scope of this India-focused guide.
📊 Top 7 Retirement Funds for NRIs in 2025
1. HDFC Retirement Savings Fund – Equity Plan
- Type: Open-ended retirement fund
- Minimum Investment: ₹500 (SIP allowed)
- Returns (5 years): ~15.2% CAGR
- Why Choose It: Aggressive equity exposure suitable for younger NRIs
- Lock-in: 5 years or till age 60
Pros:
- Long-term compounding
- Professional fund management
Cons:
- High volatility in short term
2. ICICI Prudential Retirement Fund – Pure Equity Plan
- Type: Equity-oriented retirement plan
- Returns (3 years): ~14.8% CAGR
- Lock-in: 5 years or till 60
- Best For: Risk-tolerant NRIs aiming for capital appreciation
Unique Features:
- Sector-diversified portfolio
- SIP + SWP option post retirement
3. UTI Retirement Benefit Pension Fund
- Type: Hybrid – equity + debt mix
- Returns (5 years): ~9.7% CAGR
- Best For: Moderate risk investors
- Lock-in: 3 years
Why It’s Good for NRIs:
- Stable returns
- Lower volatility than pure equity
4. NPS (National Pension System)
- Type: Government-backed pension scheme
- Eligibility: NRIs aged 18–60
- Returns (Long-term): ~9–11% CAGR (varies by fund choice)
- Tax Benefit: ₹1.5 lakh under 80C + ₹50,000 under 80CCD(1B)
NPS Tiers:
| Tier | Withdrawal | Tax Benefits |
|---|---|---|
| Tier 1 | Restricted till 60 | Yes |
| Tier 2 | Flexible withdrawal | No |
Advantages for NRIs:
- Regulated by PFRDA
- Transparent charges
- Multiple asset options (equity, government bonds, corporate debt)
5. Mirae Asset Retirement Fund – Equity Plan
- Returns (Since Inception): ~16% CAGR
- Investment Style: Growth-oriented
- Fund Rating: 4-star (Value Research)
- Best For: Long-term NRI investors looking for high returns
6. Axis Retirement Savings Fund – Dynamic Plan
- Type: Dynamic equity-debt mix
- Returns: ~11–13% CAGR
- Lock-in: Till 60 years
- Best Use: Wealth accumulation + post-retirement income
7. SBI Retirement Benefit Fund – Aggressive Hybrid Plan
- Type: Aggressive hybrid fund
- Returns: ~10% CAGR over 5 years
- Risk: Moderate
- Lock-in: 5 years or age 60
🌍 How Can NRIs Invest in These Retirement Funds?
Here’s a simplified process:
| Step | Action |
|---|---|
| 1. | Open an NRE/NRO account (mandatory for Indian investments) |
| 2. | Complete KYC using passport, visa, overseas address proof |
| 3. | Choose a mutual fund platform (Groww, Zerodha, Kuvera, etc.) or invest directly with AMCs |
| 4. | Submit FATCA declaration |
| 5. | Start SIPs or lump sum investment |
Note: NRIs from the US/Canada may face restrictions due to FATCA regulations. Not all AMCs accept investments from these countries.
🧮 Tax Implications for NRIs on Retirement Funds
| Income Type | Tax Treatment for NRIs |
|---|---|
| Mutual Fund Gains | Taxed as per holding period (LTCG/STCG) |
| NPS Annuity | Taxable at withdrawal |
| NRE FD Interest | Tax-free in India |
| ULIP Maturity | Tax-free if conditions met |
Tip: Consider investing via NRE account for full repatriability and lower tax burden.
💡 Key Tips to Choose the Right Retirement Fund as an NRI
- ✅ Choose funds with consistent 5–10 year returns
- ✅ Prefer funds with low expense ratios
- ✅ Go for lock-in funds only if you won’t need early liquidity
- ✅ Use SIPs for rupee cost averaging
- ✅ Diversify between equity and debt for risk management
- ✅ Use SWP (Systematic Withdrawal Plan) post-retirement for income
🔍 Comparison Table of Top NRI Retirement Funds
| Fund Name | Type | 5-Year CAGR | Lock-in Period | Risk Level |
|---|---|---|---|---|
| HDFC Retirement Savings – Equity | Equity | 15.2% | 5 years/age 60 | High |
| ICICI Pru Retirement – Equity | Equity | 14.8% | 5 years/age 60 | High |
| UTI Retirement Pension Fund | Hybrid | 9.7% | 3 years | Moderate |
| Mirae Asset Retirement Fund | Equity | 16% | Till 60 | High |
| NPS (Tier 1) | Hybrid (Custom) | 9–11% | Till age 60 | Moderate |
| Axis Retirement – Dynamic Plan | Dynamic Hybrid | 11–13% | Till 60 | Moderate |
| SBI Retirement – Aggressive Hybrid | Aggressive Hybrid | ~10% | 5 years/age 60 | Moderate |
🧭 Final Thoughts: Which Retirement Fund is Best for You?
The “best” retirement fund depends on your age, risk profile, time horizon, and country of residence. Here’s a simple suggestion:
- Age 25–35: HDFC/ICICI/Mirae equity retirement funds (for growth)
- Age 35–45: Axis/SBI hybrid plans (for balanced returns)
- Age 45+: UTI Retirement Fund or NPS (for stability)
If you’re unsure, speak to a SEBI-registered financial advisor who understands cross-border regulations and NRI taxation.
📌 Frequently Asked Questions (FAQs)
❓ Can NRIs invest in mutual funds in India?
Yes, NRIs can invest in most Indian mutual funds, except a few that restrict investments from the US and Canada.
❓ Is NPS a good option for NRI retirement planning?
Yes, especially for long-term savers looking for low-cost and tax-efficient retirement accumulation.
❓ Are the returns repatriable?
Returns on investments through NRE accounts are fully repatriable. NRO accounts may involve TDS and repatriation limits.