Can NRIs Invest in PPF, NPS, or SCSS
Many NRIs wonder if they can still invest in popular Indian retirement schemes like PPF (Public Provident Fund), NPS (National Pension System), or SCSS (Senior Citizen Savings Scheme) after moving abroad. These options are known for offering tax benefits and safe, long-term returns.
In this guide, we break down the current rules, real-life situations, and smart tips to help NRIs and HNIs make informed choices.
Can NRIs Invest in PPF?
Existing Accounts
If you opened a PPF account before becoming an NRI, you can continue contributing to it until the maturity period of 15 years. However, you cannot extend it for another 5 years once it matures.
Example: Priya moved to the UK in 2020 but had opened her PPF account in 2015 while working in India. She can continue depositing till 2030, but after that, no extension is allowed.
New Accounts
NRIs cannot open a new PPF account after becoming non-resident. If a new PPF account is mistakenly opened by an NRI, it will be closed upon detection and interest will be adjusted as per post office savings rates.
Tax Angle
PPF is still exempt-exempt-exempt (EEE)—contributions, interest, and maturity are tax-free in India. But check local tax rules, as some countries (like the US) may tax the interest.
Can NRIs Invest in NPS?
Eligibility
Yes, NRIs can open and invest in NPS Tier I and Tier II accounts. The only condition is that you must be an Indian citizen and comply with KYC norms.
You can open an NPS account online using your NRE or NRO bank account. PAN and Aadhaar are generally required.
Currency and Taxation
Contributions must be in Indian Rupees, not foreign currency. You can invest through your NRE/NRO account, and fund transfer happens in INR.
The maturity amount and pension received from NPS are taxable in India, based on prevailing rules at withdrawal. However, you can claim benefits under Double Taxation Avoidance Agreements (DTAA) depending on your country of residence.
Real-Life NRI Scenario
Rohit, based in Singapore, opened an NPS account before moving. He continues to invest ₹1.5 lakh yearly via his NRE account. He also claims deduction under Section 80CCD for his Indian income, helping him reduce his Indian tax liability.
Can NRIs Invest in SCSS?
Who Is Eligible
NRIs are not allowed to open new SCSS accounts. SCSS is strictly meant for resident senior citizens aged 60 and above.
However, if someone opened SCSS while being a resident and then becomes an NRI, the account will be closed and proceeds returned with applicable interest as per post office savings rules.
Alternative for NRIs
NRIs looking for senior income plans may consider:
- FCNR fixed deposits in foreign currency
- NRO fixed deposits (taxable in India)
- Debt mutual funds with low volatility
- Immediate annuities from insurance companies
These offer regular returns, but taxation and repatriation rules must be understood.
Comparison at a Glance
| Scheme | Can Existing NRI Continue? | Can New NRI Apply? | Tax Benefit |
|---|---|---|---|
| PPF | Yes (if opened before NRI status) | No | EEE in India |
| NPS | Yes | Yes | Deduction under Sec 80C and 80CCD |
| SCSS | No | No | NA for NRIs |
Key Tips for NRIs
- Always inform your bank or post office about your change in residency status
- Use NRO accounts for investing in Indian schemes
- Consult a cross-border tax expert before investing in any scheme
- Track maturity dates and withdrawal timelines to avoid penalties
- Check if your country taxes Indian earnings—especially for PPF or NPS interest
Final Thoughts
While NRIs cannot open new PPF or SCSS accounts, they can continue existing PPFs and fully participate in the NPS. NPS, in particular, offers a solid long-term retirement option with flexible contribution and pension planning.
Choosing the right instrument depends on your age, residency, goals, and tax situation. If you’re unsure about which scheme fits you best, consult a trusted NRI financial advisor to plan your wealth and retirement effectively.