Four Investments Options That NRIs Should Avoid

For NRIs, distance, complex regulations, and tax rules make many investment products risky and costly.

The article flags Unit Linked Insurance Plans (ULIPs), direct stock investment, equity futures & options (F&O), and unregulated investments such as agri‑tech schemes and NFTs.

ULIPs bundle insurance and investment, have a 5-year lock-in period, and multiple layers of charges that reduce returns and limit liquidity. The fund options for ULIPs are also relatively restricted, making it harder to build a fixed, well-diversified portfolio.

NRIs must consider a more straightforward insurance solution for protection cover, and for wealth creation, they can use market-linked investments, such as mutual funds, separately.

When it comes to direct equity investments, it involves extensive research, active monitoring, and dealing with high market volatility, which is way more challenging as an NRI, as you're dealing with time zone differences and limited ground access.

NRIs must comply with the RBI/FEMA limits, as well as SEBI norms; failing to do so can cause compliance breaches rather than simple investment losses.