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The below content is purely for informational purposes and is not intended to constitute advisory of any kind. Please note, these are in-depth articles which are best viewed on large screen devices like laptops, desktops and tablets. The position reflected in this article has been updated as of May 31, 2024.

Retirement planning for Non-Resident Indians (NRIs) has an added layer of complexity. Standard factors like age, income, and lifestyle remain important, but their chosen retirement location (India or abroad) significantly affects their financial needs. This article explores suitable investment options within India for NRIs to accumulate their desired retirement corpus. 


Planning your retirement as an NRI 

As NRIs, deciding on your retirement location (India or overseas) is the first step in your retirement planning as it would help you ascertain your cost of living. You should consider the current living expenses, prevalent inflation rate and the life expectancy in the country you decide to settle in. Your retirement corpus should cover your desired standard of living, the financial needs of your dependents, medical, healthcare and emergency funds. 

You can use ICICI Bank's retirement calculator to know how much you should invest now to build your desired retirement corpus.

Retirement planning calculator

Retirement planning involves two key phases: the contribution phase, where you actively save and invest, and the distribution phase, where you tap into those savings to fund your retirement lifestyle. Let’s look at these in more detail.


Contribution phase

The foundation of a secure retirement is built during the contribution phase. For building your retirement corpus, you should consider a diversified investment portfolio which is strategically allocated across relevant asset classes and aligns with your risk tolerance and financial goals. While you can invest overseas, there are several investment options in India available for NRIs such as: 

  1. Equity-based investments: Based on your risk appetite and investment horizon, you can choose to invest in stocks/shares and mutual funds. For investing in equity instruments, you will need a Portfolio Investment NRI Scheme (PINS) based Non-Resident External (NRE) account or Non-Resident Ordinary (NRO) account linked to your NRI demat account. Please note that according to the recent Reserve Bank of India (RBI) guidelines, NRO (PINS) accounts are redesignated as regular NRO bank accounts. As an NRI, you are not permitted to conduct intraday trading* on equity shares. You can invest and trade in the Futures and Options (F&O) segment but not in currency derivatives and commodities etc. To know more, click here.
    *FAQ 25, National Stock Exchange (NSE)
  2. Fixed income and debt-based investments: If you are looking for stable returns, you can explore investing in term deposits such as NRE/NRO/Foreign-Currency Non-Resident Bank (B) (FCNR (B)) Fixed Deposits (FDs), Government Securities (G-secs), corporate bonds/debentures, and debt-oriented mutual funds
  3. Gold: You can invest in gold assets such as physical gold, gold Exchange-Traded Funds (ETFs), gold mutual funds and digital gold. Please note, NRIs are not permitted to invest in Sovereign Gold Bonds (SGBs). To know more on gold investments, click here
  4. National Pension System (NPS): The National Pension System, popularly known as the National Pension Scheme, is open for investment only for Resident Indians (RIs) and NRIs. Persons of Indian Origin (PIOs) and Overseas Citizens of India (OCIs) are not eligible to invest in NPS.
    NRIs can only invest in NPS Tier-I accounts and are not permitted to invest in NPS Tier-II accounts, which are reserved exclusively for resident Indians holding active Tier-I accounts. NRIs aged between 18 to 60 years can participate in NPS, provided they comply with Know Your Customer (KYC) norms*. You would also need to have a valid Indian passport, Aadhaar or a Permanent Account Number (PAN) card. Further, you should link your mobile number to your Aadhaar/PAN card
    *Ministry of External Affairs
  5. Alternative Investment Funds (AIF): AIFs are investment funds that allow investors to invest in hedge funds, private equity, venture capital, and other categories. You can invest in category I, category II and category III of AIFs. To know more, click here
  6. Real estate: As an NRI, you can invest in all residential and commercial properties except agricultural land, plantation property and farmhouses in India. To know more about the types of real estate you can invest in and the rules and regulations surrounding real estate investments, click here

You can also consider investing in Real Estate Investment Trusts (REITs). They offer a convenient way for NRIs to invest in the real estate market without directly owning property. By investing in REITs, NRIs can gain exposure to a diversified portfolio of income-generating real estate assets, including commercial properties like office buildings, malls, and residential complexes. REITs typically distribute a significant portion of their income as dividends, providing investors with a steady stream of passive income. Additionally, REIT investments offer liquidity and transparency, making them an attractive option for NRIs looking to diversify their investment portfolio and capitalise on the potential growth of the real estate sector.


Distribution phase

The distribution phase is all about accessing your retirement savings. Here, the focus shifts to prioritising safety, liquidity, and returns ('SLR') of your existing corpus. NRIs should minimise risk exposure and ensure easy access to funds to cover ongoing expenses. However, you will still need to invest your retirement corpus to beat inflation and generate a steady stream of income to cover your post-retirement expenses. For the distribution phase, you can consider investing in the below listed products:

  1. Annuity Plans: These are specialised retirement products from insurance provider that start providing you with regular income right away (immediate annuity) or at a chosen later date (deferred annuity).
  2. Pension Plans: These are annuity plans providing you with regular income along with an additional benefit of life cover to your family in case of an unfortunate event.

In addition to the above, you can also consider investing in fixed income and debt-based instruments (NRE/NRO/FCNR(B) FDs, G-secs, corporate bonds, and debt mutual funds).


Investment must-knows for NRIs retiring in India

If you decide to relocate to India for your retirement, your residential status will change to a Resident but Not-Ordinarily Resident (RNOR). Gradually, over a period of two to three financial years, you will be regarded as a Resident but Ordinarily Resident (ROR). To understand the difference between an RNOR and ROR, click here.

As an ROR, you are eligible to invest in additional instruments which were not available to you as NRI. These include:

  • Fresh contributions to a PPF account
  • Tier II NPS investments
  • Investments in SGBs
  • Agricultural land/Plantation property/Farmhouse
  • Intraday trading in stocks/shares
  • Trading in currency derivatives and commodities etc.

Upon your relocation to India, there are certain banking must-dos you should keep in mind to remain compliant with the rules and regulations. To know about what happens to your existing bank accounts and investments when you return to India, click here.


Retirement planning is integral to secure your future financial needs. To build a desired retirement corpus, you should estimate your cost of living based on your place of retirement, your life expectancy in the country you decide to settle in, financial needs of your family and provision for medical and other emergencies. Whether you settle overseas or return to India for retirement, you have several investment options in India including equity, fixed income, debt-based instruments and real estate investments. For your post-retirement needs, you should shift your focus to prioritise ‘safety, liquidity and returns’ of your investments. You should consult a wealth manager to invest carefully according to your risk appetite and retirement goals.

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