Hello folks! Mani here. The guy who made ALL the wrong money moves when returning to India.
I returned in 2017 with my life savings. Made financial decisions by flipping a coin. The coin had better financial sense than me.
Let me save you from my expensive education.
The Big Money Question Every Returning NRI Faces 🤔
Should you move your dollars to India? Or keep them abroad? I struggled with this decision. Then made all decisions wrong anyway.
This question kept me awake for weeks. Finally solved my insomnia by making impulsive decisions. Created new financial problems instead.
Currency Risk: The Hidden Monster 👹
I converted all my dollars to rupees immediately. The rupee then dropped 15% against dollar over next two years. I basically took a voluntary 15% pay cut.
| Decision | 5-Year Result (2017-2022) | Risk Level | My Experience |
|---|---|---|---|
| All to Rupees | Lost 15-20% to depreciation | High | Converted everything immediately |
| Keep in Dollars | Gained 15-20% on currency | Medium | Discovered this option too late |
| Balanced Approach | Hedged currency risk | Low | What smart people did |
I watched the rupee fall month after month. Calculated my losses daily. Developed new stress twitch in left eye. Still have it sometimes.
Interest Rate Comparison: Numbers Don’t Lie 📊
Interest rates seemed higher in India. I was right. But I forgot about currency depreciation. Math was never my strong subject.
| Country | Interest Rate (2023) | After Tax Returns | After Currency Effects |
|---|---|---|---|
| India | 6-7% | 4-5% | Minus rupee depreciation |
| USA | 3-4% | 2-3% | Plus dollar appreciation |
| Singapore | 3-3.5% | 2.5-3% | Plus currency stability |
I celebrated getting 7% in Indian FDs vs 2% in US. Then watched currency drop eliminate all advantages. The universe enjoys humbling me regularly.
Tax Implications: The Double Whammy 🧾
Tax treatment differs depending on where you keep money. I discovered this after making irreversible decisions.
| Location | NRI Tax Status | RNOR Tax Status | Resident Tax Status |
|---|---|---|---|
| India NRE | Tax free interest | Tax free interest | Taxable interest |
| India NRO | 30% TDS | 10% TDS | 10% TDS |
| Abroad | No Indian tax | No Indian tax if not from Indian business | Fully taxable |
I kept foreign accounts without understanding FBAR and FATCA requirements. Created international tax confusion. Became case study in my CA’s office for “what not to do.”
Investment Options Comparison 📈
Investment options differ vastly. I discovered most after already committing my money elsewhere.
| Investment | India Returns (2018-2023) | US Returns (2018-2023) | My Poor Choices |
|---|---|---|---|
| Equity Markets | 12-15% (INR terms) | 13-15% (USD terms) | Sold US stocks right before massive rally |
| Real Estate | 3-6% (Tier 1 cities) | 4-8% (Major markets) | Bought property in India at peak |
| Debt/Bonds | 6-7% | 2-4% | Ignored currency risk |
I sold Tesla stock to buy India property in 2018. Tesla went up 1200%. My property went up 5%. This decision alone funded my therapist’s new car probably.
Practical Money Movement Strategies 🚚
Moving money has costs. I discovered them all through painful experience.
| Transfer Method | Cost | Speed | My Transfer Adventures |
|---|---|---|---|
| Bank Wire | 2-3% in fees and forex | 1-3 days | Paid maximum fees possible |
| Specialized Services | 0.5-1% | 1-5 days | Discovered these after moving most money |
| Cryptocurrency | Varies widely | Hours | Didn’t exist meaningfully when I returned |
I used bank wire for everything. Paid maximum fees. Later discovered remittance services with 70% lower fees. That knowledge came exactly one day after completing my last transfer.
The Emergency Fund Location Dilemma 🚨
Where should emergency fund live? I had mine in wrong place when emergency struck.
| Location | Pros | Cons | My Emergency Experience |
|---|---|---|---|
| India | Quick access | Currency depreciation | Had medical emergency. Money was abroad. |
| US/Abroad | Value preservation | Access delays | Had money in US when needed in India urgently |
| Split Approach | Best of both | Complexity | What I do now after learning hard way |
I needed emergency funds for unexpected surgery. My funds were sitting in US account. Unable to access quickly. Had to borrow money locally. Created new emergency while handling first emergency.
Future Expense Planning 🔮
Future expenses should guide your decisions. I ignored this completely. Planned nothing. Achieved financial chaos.
| Expense Type | Ideal Location | Reasoning | My Planning Fails |
|---|---|---|---|
| Indian Education | India | Rupee expenses | Had to transfer during rate drops |
| Foreign Education | Keep Abroad | Dollar expenses | Had no children but still relevant |
| Property in India | India | Large rupee outlay | Transferred at worst possible rates |
I needed money for house purchase in India. Had to transfer large sum during particularly bad exchange rate week. That timing error cost more than my first car.
Banking Options for Split Strategy 🏦
If keeping money both places, account structure matters. I created most complicated structure possible.
| Account Type | Purpose | Benefits | My Banking Mess |
|---|---|---|---|
| RFC Account in India | Keep foreign currency in India | Avoid immediate conversion | Discovered this existed one year too late |
| NRO Account | Indian income while abroad | Tax clarity | Mixed funds between accounts |
| Foreign Bank NRI Services | Cross border management | Specialized knowledge | Used regular bank with no NRI expertise |
I maintained seven different accounts across three countries at one point. Created personal banking puzzle that even bank managers couldn’t solve. Still finding accounts sometimes.
Final Thoughts From a Financial Mistake Expert 🧠
The perfect strategy combines both approaches. Keep some abroad. Bring some to India. I did neither. Then both. Then switched multiple times.
I went from financial confusion to financial stability. Eventually. After creating enough problems to fill money mistake encyclopedia.
Be strategic. Plan for currency risk. Consider future expenses.
And remember: The decision isn’t all-or-nothing. Unlike me who treats all financial decisions like cliff jumping without parachute.
Got questions about where to keep your money? Drop them in comments. My expensive mistakes are your free education.
Sources and Helpful Links:
- Reserve Bank of India – Foreign Exchange Management: https://www.rbi.org.in/Scripts/BS_FemaNotifications.aspx
- Historical Exchange Rate Data (USD-INR): https://www.xe.com/currencycharts/?from=USD&to=INR
- Income Tax Department – Foreign Asset Declaration: https://www.incometaxindia.gov.in/Pages/international-taxation/foreign-assets.aspx
- SBI RFC Account Services: https://sbi.co.in/web/nri/accounts/resident-foreign-currency-account
- Back to India Movement Financial Guide: https://backtoindia.com/financial-guide
- S&P 500 vs Sensex Returns (2018-2023): https://www.morningstar.com/markets/global-market-performance