SIP for NRI

Table of Content

1. What is SIP for NRI?

2. What is a SIP with Life Insurance Cover?

3. Why NRIs Are Choosing SIP Investments

4. Benefits of SIP Explained

5. How Does SIP in a ULIP Plan Work?

6. Benefits of SIP Explained

7. How Does SIP in a ULIP Plan Work?

8. Can NRIs Invest in SIPs with Life Cover in India?

9. What are SIPs for NRIs in ULIP?

10. How Can NRIs Invest in SIPs with Life Cover?

11. In-Person Verification Steps

12. Key Considerations for NRI Investors

13. How Are NRIs Taxed on ULIP Investments?

14. Physical SIPs vs. Digital SIPs for NRIs

15. Top Tips for NRIs Starting SIPs in 2025

16. Summary

17. FAQs on SIP for NRI

What is SIP for NRI?

SIP for NRI on HDFC Life refers to systematic investments in ULIP plans where NRIs invest fixed amounts at regular intervals, combining life insurance protection with market-linked returns with life insurance protection. Unlike traditional SIPs in mutual funds that focus solely on investment growth, ULIP SIPs provide dual benefits. 

It is a disciplined best SIP plan for NRIs in India and comprehensive financial security for their families in India. Furthermore, these SIP plans for NRIs enable them to participate systematically in the Indian market, while ensuring life cover for their dependents, offering peace of mind and long-term financial planning support. 

With flexibility to choose premium amounts, investment funds, and policy terms, along with complete digital accessibility through NRE/NRO accounts, these plans make it easier for NRIs abroad to invest and manage their policies online. Therefore, for those seeking the best SIP plan for NRI in India, ULIP SIPs combine convenience, transparency, and protection in one integrated investment plan.

What is a SIP with Life Insurance Cover?

Systematic Investment Plan with Life Insurance Cover on HDFC Life refers to a ULIP-based investment where NRIs contribute fixed amounts at regular intervals, combining market-linked returns with life insurance protection. 

Unlike mutual fund SIPs, these SIP plans for NRIs offer dual benefits: systematic wealth creation and financial security for dependents. Moreover, they enable NRIs to invest consistently in Indian markets while planning for long-term goals such as retirement, child education, or wealth transfer. 

With automated contributions from NRE/NRO accounts, the SIP investment process for NRIs is fully digital, providing convenience and discipline. By integrating investment growth with life cover, these plans deliver both financial protection and structured savings. Hence, it makes them the best SIP plan for NRIs in India for those seeking growth and security simultaneously.

Why NRIs Are Choosing SIP Investments

SIP for NRIs in ULIPs is appealing as it combines disciplined systematic investing with life insurance cover. Small, regular contributions allow long-term wealth creation, while providing financial protection for dependents. Additionally, the dual benefit, compounding potential, and digital accessibility make it a practical investment choice for NRIs seeking growth and security.

1. Consistent Wealth Creation with ULIP SIPs

ULIP SIPs enable NRIs to build a substantial corpus through small, regular contributions gradually. Premiums are automatically allocated between life cover and selected fund options, ensuring disciplined investing. This structured approach reduces financial stress, encourages long-term commitment, and supports consistent wealth accumulation over time.

2. Dual Benefits: Investment + Life Cover

ULIP SIPs offer both ULIP SIPs offer both life insurance protection and investment growth , unlike an ordinary SIP for NRIs. The life cover safeguards dependents in the event of unforeseen circumstances, providing NRIs with peace of mind. Therefore, this dual benefit is especially valuable for NRIs managing financial responsibilities from abroad while staying invested in India.

3. Compounding Advantage in ULIP SIPs

Returns generated within ULIP funds are reinvested, creating compounding benefits over time. Even modest monthly SIP contributions can grow into significant wealth when invested consistently. This compounding effect supports long-term goals such as retirement planning, child education, and wealth transfer, making disciplined SIP investing highly effective.

4. Convenience and Digital Accessibility

NRIs can initiate and manage ULIP SIPs entirely online, including auto-debit from NRE/NRO accounts. Digital tools allow fund tracking, switching between ULIP options, and easy premium management. Furthermore, compliance with regulations under the Foreign Exchange Management Act, 1999 (FEMA) and those issued by SEBI ensure a hassle-free process with minimal paperwork, making investments seamless even from abroad.

Benefits of SIP for NRI

SIP for NRI in ULIPs offers disciplined, systematic investing combined with life insurance protection. NRIs benefit from structured wealth creation, long-term financial planning, dual investment and security, digital accessibility, and compounding advantages, making these plans an effective tool for securing family and financial goals while investing in Indian markets.

• Flexible Investment Options

NRIs can choose ULIP funds aligned with their risk profile and financial goals, adjusting SIP amounts, pausing, or stopping contributions as needed. Fund switching within the ULIP allows alignment with market conditions. Additionally, multiple fund options in a single plan help balance risk, optimise returns, and maintain control over both investment growth and insurance coverage.

• Better Returns

ULIP SIPs offer higher growth potential than traditional savings avenues through market-linked fund performance. Consistent, long-term contributions enable NRIs to build substantial wealth while also benefiting from life insurance coverage. Moreover, selecting different fund styles, equity, balanced, or debt, aligns returns with risk appetite, maximising the corpus in line with financial goals over time.

• Power of Compounding

Reinvested returns in ULIP funds generate additional wealth over time. Even modest monthly SIPs can grow significantly when invested consistently. Early initiation and disciplined investing amplify the compounding benefits, making ULIP SIPs an ideal choice for achieving retirement goals, funding child education, or wealth transfer, with long-term horizons enhancing overall wealth accumulation.

• Simplified Management

SIP for NRIs enable them to invest systematically without managing large lump sums. Online features enable automated contributions, seamless fund switching, and portfolio adjustments tailored to market conditions or financial goals. NRIs can monitor both investment and insurance cover simultaneously, reducing stress and providing convenient, streamlined management of their financial planning from abroad.

• Benefits of Rupee Appreciation

Currency movements can enhance ULIP SIP returns for NRIs investing from abroad. If the Indian rupee appreciates against its home currency, the effective corpus value increases, complementing the growth of market-linked funds. Strategically timing contributions to leverage favourable exchange rates further boosts wealth, providing an additional advantage unique to NRIs investing in India through ULIP SIPs.

How Does SIP in a ULIP Plan Work?

A SIP for NRIs in a ULIP plan allows NRIs to invest small, fixed amounts systematically while enjoying life insurance cover. Contributions are set at the outset and automatically debited from NRE, NRO, or FCNR accounts on a monthly or quarterly basis. 

Each instalment is split between the life cover and the chosen ULIP funds, with units purchased at the prevailing NAV. This rupee-cost averaging mechanism buys more units when the NAV is low and fewer when the NAV is high, mitigating market volatility. 

Over time, consistent SIP investments for NRIs build a substantial corpus while maintaining financial protection for dependents. NRIs can switch between ULIP funds, make top-ups, and track performance digitally, ensuring flexibility and control. These SIP plans for NRI provide a disciplined, long-term investment approach, making them an ideal option for those seeking the best SIP plan for NRI in India.

Benefits of SIP Explained

The benefits of SIP for NRI abound. They are:

• Flexible Investment Options

The SIP investment for NRIs allows them to choose the funds in ULIP plans to align with their risk tolerance and financial goals. With the choice of fixed amounts and the facility to pause or stop contributions, they can adjust according to changing market trends and personal circumstances.

• Better Returns

SIP for NRI is a risky investment for NRIs compared to a conservative savings plan like fixed deposits. However, it is a preferred investment alternative as it provides higher returns if the NRIs stick to the plan for longer periods.

• Power of Compounding

In SIP plans for NRI, returns are reinvested to generate further returns. This is the power of compounding that multiplies returns over time and enables small investments to generate significant corpus over time.

• Simplified Management

A diversified portfolio in ULIP funds is important when you invest huge amounts. The systematic investment of small amounts makes SIP for NRI manageable. It is much easier to readjust SIP according to changed market conditions and financial goals.

• Benefits of Rupee Appreciation

SIP for NRI also provides a currency conversion advantage. If the conversion value increases, there is scope for higher returns.

How Does SIP in a ULIP Plan Work?

A SIP for NRIs in a ULIP plan allows NRIs to invest small, fixed amounts systematically while enjoying life insurance cover. Contributions are set at the outset and automatically debited from NRE, NRO, or FCNR accounts on a monthly or quarterly basis. 

Each instalment is split between the life cover and the chosen ULIP funds, with units purchased at the prevailing NAV. This rupee-cost averaging mechanism buys more units when the NAV is low and fewer when the NAV is high, mitigating market volatility. 

Over time, consistent SIP investments for NRIs build a substantial corpus while maintaining financial protection for dependents. NRIs can switch between ULIP funds, make top-ups, and track performance digitally, ensuring flexibility and control. These SIP plans for NRI provide a disciplined, long-term investment approach, making them an ideal option for those seeking the best SIP plan for NRI in India.

Can NRIs Invest in SIPs with Life Cover in India?

The eligible candidates for SIP with life cover are NRIs, Overseas Citizens in India (OCI), and Persons of Indian Origin (PIOs). NRI SIP investments do not require any special regulatory permissions, including RBI.

What are SIPs for NRIs in ULIP?

SIPs for NRIs in ULIP refer to systematic investments where NRIs contribute fixed amounts at regular intervals into a ULIP, combining life insurance protection with market-linked wealth creation.

These investments are governed by the provisions of the Income Tax Act, 1961 for the NRI taxation in India, with treatment varying based on policy terms, premium limits, and exemptions. Death benefits under the ULIP generally remain completely tax-free as per Section 10(10D) of the Income Tax Act, 1961. Also, the deduction towards this for eligible contributions under Section 80C upto ₹1.5 lakh can be claimed. These SIP plans for NRI offer two options: 

• Repatriable (funds can be transferred abroad via NRE/FCNR accounts)

• Non-repatriable (funds remain in India via NRE/NRO accounts)

They cater to liquidity and regulatory preferences. With digital onboarding and automated contributions, SIP investments for NRIs are convenient and require minimal expertise. This structure enables NRIs to plan disciplined investments while securing life insurance coverage, laying the foundation for understanding ULIP SIP mechanics, benefits, and the overall investment plan for NRIs.

How Can NRIs Invest in SIPs with Life Cover?

Non-resident Indians can invest in SIP plans for NRI only after opening an NRE or NRO account, depending on whether they choose the repatriable or non-repatriable plan. Thereafter, they have to submit soft copies of the required documents for online KYC registration.

Online KYC

KYC or Know Your Customer registration is the first step to start investing in NRI SIP investments. The NRIs have to upload their official photo identification and address proofs, which will be verified through IPV, i.e., In-Person Verification.

Documents Required

The documents required for KYC registration are:

• Filled and signed the KYC form
• Self-attested PAN and Passport for ID verification
• Inland and overseas address proof for NRI verification

In-Person Verification Steps

For the in-person verification of the documents submitted electronically for SIP investment for NRI, the NRIs have to submit the original documents to the fund house. The KYC is deemed completed only after the in-person verification. There are two ways to do in-person verification.

• Offline Method

The NRI can visit the fund house personally, or fund house personnel can visit the NRI’s workplace or residence to verify the original documents.

• Online Method

Online KYC for NRI investors involves live authentication through video conference at a suitable time. An internet connection is a prerequisite for verification through this method. The personnel may ask a few questions regarding the information in the KYC form. If there is a mismatch in the details, they may reject the application.

Key Considerations for NRI Investors

Before investing in an NRI ULIP plan, NRIs should evaluate key factors that affect returns, compliance, and ease of management. Understanding eligibility, payment options, documentation, taxes, fund choices, maturity benefits, and repatriation ensures informed and effective investment decisions while maintaining regulatory compliance.

• Eligibility

NRIs, PIOs, and OCIs can invest in ULIP SIPs, subject to residency status under Indian regulations. Proper identification is essential for KYC verification. Age and health criteria may influence eligibility, and adherence to legal and regulatory norms is mandatory, ensuring secure and compliant investments that support long-term wealth creation and preservation.

• Available Currency Choices

NRIs can pay premiums in Indian Rupees or approved foreign currencies. Currency selection affects repatriation, fund processing, and returns due to exchange rate fluctuations. Some insurers allow multiple currency accounts for flexibility, but paying in Indian Rupees simplifies compliance. NRIs should select a currency that aligns with their long-term investment and repatriation plans.

• Required Documents

Mandatory documents include valid identification proof, proof of address, proof of income, and verification of NRI status. Submission ensures KYC compliance and verification. Incorrect or incomplete documents may cause a delay in the activation process. Self-attested, recent documents are required, and keeping both original and digital copies facilitates smooth SIP registration in ULIP plans.

• Available Payment Options

NRIs can pay via NRE/NRO accounts, wire transfers, foreign inward remittances, or international credit cards. Proper routing ensures compliance with rules and regulations prescribed by RBI under the Foreign Exchange Management Act, 1999 (FEMA). Digital payments simplify tracking, while auto-debit options automate SIP contributions. Therefore, flexibility in payment frequency helps manage financial planning efficiently, minimising transaction charges.

• Tax Benefits

ULIP SIPs with life cover for NRIs may qualify for Section 80C deductions upto the ceiling limit of ₹1.5 lakh per financial year and Section 10(10D) exemptions if premium limits are met as per the Income Tax Act, 1961. Exceeding thresholds can trigger taxable returns. Hence, maintaining accurate records helps claim deductions and optimise after-tax returns, making awareness of tax benefits essential for effective financial planning.

• Benefits at Maturity

Maturity proceeds are tax-free if annual premiums do not exceed ₹2.5 lakh; however, taxes in the home country may still apply. Long-term ULIP SIPs accumulate a substantial corpus, with disciplined contributions enhancing growth. Additionally, planning withdrawals strategically ensures liquidity or reinvestment, combining investment growth with life cover for improved financial security.

• Available Fund Choices

NRIs can select from various ULIP fund options, including equity, debt, and balanced funds. Fund selection should align with an individual's risk tolerance and financial goals. Disciplined SIPs for NRIs build long-term wealth, and periodic review or rebalancing helps optimise outcomes. Aligning fund choice with investment horizon and risk appetite is key to maximising returns.

• Transferring Funds Back to Your Home Country

Maturity proceeds can be repatriated in accordance with guidelines issued by RBI under FEMA, provided proper documentation is submitted. Exchange rate fluctuations may impact returns, and tax implications in the home country should be considered. Partial repatriation may also be allowed. Compliance ensures smooth transfers, avoids penalties, and prevents transaction delays for NRIs.

How Are NRIs Taxed on ULIP Investments?

ULIP SIP investments for NRIs are subject to the provisions of the Income Tax Act, 1961, with treatment depending on policy issuance date, premium limits, and exemption conditions. While premiums and capital gains may be subject to taxation in some instances, death benefits under ULIP plans are generally tax-free. Therefore, understanding these rules helps NRIs plan investments efficiently.

1. ULIPs with Tax Benefits

ULIP policies issued on or after 01-02-2021 may qualify for tax exemption under Section 10(10D) of the Income Tax Act, 1961, if specific conditions are met. These include the following:

• Premiums not exceeding 10% of the sum assured in any year

• Annual premiums ≤ ₹2.5 lakh per policy

• Aggregate annual premiums across all policies owned by the policyholder issued after 01-02-2021 ≤ ₹2.5 lakh 

Exemptions apply only if all conditions are satisfied, otherwise ULIPs are taxed under the head “Income from Capital Gain” at the rate of 12.5% without indexation with exemption upto ₹1.25 lakh in the financial year. Death benefits remain entirely tax-free regardless of premiums. In addition, ULIPs also offer tax deductions on premiums paid under Section 80C of the Income Tax Act, 1961 up to 1.5 lakh annually. For NRIs, this enhances the appeal of SIP for NRI ULIP investments by providing both wealth creation and life cover benefits without immediate tax liability. Therefore, exceeding these limits may trigger taxable returns, making careful planning essential to maximise tax efficiency while investing systematically.

2. Short-term Capital Gains

STCG does not apply to ULIPs because units cannot be redeemed or partially withdrawn before the five-year mark. This five-year lock-in ensures systematic corpus growth, distinguishing ULIPs from other investment products, such as mutual funds. Furthermore, for NRIs investing in SIP plans, it reinforces disciplined, long-term investing while preserving tax advantages.

3. Long-term Capital gains (LTCG)

After the Union Budget 2025, that brought the clarification, LTCG is levied at 12.5% tax rate without indexation if gains exceed ₹1.25 lakh in a financial year under Section 112A of the Income Tax Act, 1961. This applies when ULIP SIP for NRI tax exemption conditions are not fully met as per Section 10(10D) of the Income Tax Act, 1961. LTCG is calculated on the difference between the maturity value and total premiums paid. Hence, careful planning of contributions and strategic fund selection within ULIPs can help NRIs optimise returns while managing tax liability efficiently.

Physical SIPs vs. Digital SIPs for NRIs

When considering a SIP for NRI, understanding the differences between physical and digital modes of investment is essential for convenience, compliance, and efficient portfolio management, which is illustrated in the following table: 

Top Tips for NRIs Starting SIPs in 2025

Starting a SIP for NRI in 2025 requires strategic planning to maximise returns, manage risk, and achieve long-term financial goals. Here are key tips for NRIs:

1. Diversify Across ULIP Funds

Invest across equity, debt, and balanced ULIP funds to manage risk while targeting steady wealth creation. Diversification helps balance market fluctuations and enhances the long-term growth of the corpus.

2. Monitor Portfolio Regularly

Review fund performance, charges, and portfolio allocation regularly to ensure optimal investment decisions are made. Adjust investments based on market trends, economic indicators, and personal financial goals to stay on track.

3. Align with Risk Tolerance and Horizon

Select fund allocations matching your risk appetite and investment horizon. Reassess periodically as financial goals evolve to ensure disciplined and effective investing.

4. Stay Informed About Market Trends

Monitor the Indian market's movements, interest rates, and regulatory changes. Awareness enables informed decisions and helps NRIs optimise ULIP SIP growth.

5. Optimise Currency and Contribution Methods

Use NRE/NRO accounts strategically, choose the right currency, and plan repatriation considering exchange rate fluctuations. This minimises potential losses and ensures smooth fund transfers.

6. Leverage Digital Tools

Automate SIP contributions, track fund performance online, and utilise digital platforms to adjust allocations, switch funds, or make top-ups for convenient and hassle-free management.

Summary

A SIP for NRI is a ULIP-based systematic investment plan that combines market-linked wealth creation with life insurance protection. Digitisation makes it easy for NRIs to purchase policies online, automate premium payments, manage portfolios, and redeem funds conveniently.

To optimise outcomes, NRIs should diversify their investments across ULIP funds, review their portfolios periodically, and align their investments with their risk tolerance and financial goals. The plan offers flexibility with adjustable contributions, fund switching, and multiple investment tenures.

Long-term disciplined investing benefits from compounding and tax advantages under Sections 80C and 10(10D) of the Income Tax Act, 1961. In addition, the DTAA benefits can be claimed under Section 90& 91 of the Income Tax Act, 1961, subject to fulfilment of the prescribed conditions and submission of relevant documentation such as the Tax Residency Certificate (TRC) and Form 10F. With India’s growing economy and market opportunities, ULIP SIPs provide NRIs an effective way to build substantial wealth while ensuring financial security for their dependents.

FAQs on SIP for NRI

Q. Can NRI invest in SIPs?

Yes. NRIs, Persons of Indian Origin (PIOs) and Overseas Citizens in India (OCIs) can invest in SIPs as long they have an NRE or NRO account in an Indian Bank.

Q. Can I continue SIP after becoming NRI?

You can continue the SIP you have started as a resident Indian when you become NRI. You will have to open an NRO account and provide the details of the account to your Asset Management Company. The maturity proceeds of the SIP will be credited to your NRO account after deducting TDS.

Q. Which SIP is best for 5 years?

The best SIP for 5 years depends on your financial goals, risk tolerance, and expected returns. You can seek professional guidance. A customised plan to align with your risk appetite and objectives will be provided.

Q. Are there any tax implications for NRIs on SIP returns?

Short-term capital gains are applicable if you redeem the SIP within 12 months. The profit will be taxed at 20%. Long-term capital gains are applicable for gains above Rs. 1.25 lakhs if the SIP is redeemed after 12 months. 12.5% tax is applied on the gains.

Q. What's the minimum amount for SIP investment for NRIs?

The minimum amount for SIP investment for NRIs is Rs. 1000/-. However, some mutual funds may stipulate higher investments.

Q. What are NRI investment options in India other than Mutual Funds?

NRIs can explore various investment avenues in India, including fixed deposits in NRE/NRO accounts, direct equity through Portfolio Investment Scheme (PIS), government bonds, National Pension System (NPS), real estate, and life insurance products. Each option has specific RBI guidelines, risk-return profiles, and taxation norms, allowing NRIs to diversify their investment portfolio effectively and strategically.

Q. How can an NRI start SIP in India?

An NRI can start a SIP by opening an NRE/NRO account, completing KYC with PAN, passport, and overseas address proof, and complying with FATCA. After selecting suitable mutual fund schemes, they can register for SIPs online or through fund houses, linking bank accounts for automatic debit of monthly SIP instalments, ensuring a seamless investment process.

Related Articles:

• NRI Life Insurance Policies in India | Secure Your Family’s Future
• NRI Retirement Plans in India - Secure Your Future with HDFC Life
• ULIP Plans for NRI in India 2025
• Term Insurance for NRI in India 2025
• Best Pension Plans for NRIs in India
• NPS for NRI: Benefits, Eligibility and How to Invest?