India’s rapid economic growth positions it as a potential top-three global economy. It offers many investment opportunities for Indians in California. Over the past two decades, India’s real GDP growth rate has averaged 6%–7% annually. It has surpassed many developed and emerging markets in growth potential, attracting increased investments and fostering competitiveness on the global stage.

Liquid investment option in India allow individual investors to earn attractive returns within shorter tenures with their idle money. India’s most popular short investment options are invoice discounting, SIPs, and liquid FDs. Let’s discuss the various investment option in India and how individual investors residing outside the country can benefit from them. 

Investment Option in India

1. Invoice Bill Discounting

Despite being aware that building wealth is long-term, individual investors always seek instruments that offer risk-free, rewarding returns within shorter tenures. Invoice discounting is the answer for such investors seeking reliable returns in the short term.

Invoice discounting is a unique investment option in India that allows businesses to obtain funds against their invoices for the goods sold, thereby maintaining their working capital. altGraaf has created a platform that enables individual investors to earn through invoice financing via five distinct products.

Below is a brief overview of the products: 

1. altWings

altWings connects businesses seeking working capital with individual investors through the altGraaf platform. After rigorous due diligence, the platform lists companies for investors to finance invoices. These invoices offer a 90-day repayment tenure with 12-14% annual yields. Risk mitigants like post-dated cheques safeguard investor interests. altGraaf’s rigorous credit screening process ensures that only creditworthy companies are listed on the platform, offering investors transparency and confidence.

2. altBlu

altBlu offers two versions: one with trade credit insurance and escrow control and another with just escrow control. The first version provides 90% insurance coverage for the principal, mitigating default risk. Investors earn an 11-12% yield over a 90-day tenure. With rigorous due diligence, altGraaf ensures only creditworthy borrowers access the platform, offering investors a balanced blend of security and growth potential.

3. altArmour

altArmour facilitates individual investors to invest in invoice discounting with added security through trade credit insurance. This insurance covers 100% of the principal and interest, protecting investors from defaults. Funds and repayments are managed through an altGraaf-controlled escrow account, ensuring transparency and safety. Despite these risks, partnerships with reputable insurers and their risk mitigants offer a secure investment option in India with 11 -12 % yields over a 30-90-day tenure.

Like all investments, invoice discounting investments carry risks, and investors must review all investment opportunities carefully before investing. However, with these choices of Invoice Discounting products across the risk spectrum from very low to high risk, investors can select opportunities that align with their risk appetite and return expectations.

4. altSmart

altSmart allows individual investors a unique investment option in India where they can in invoices raised by companies that require working capital. Each invoice is backed by a bank guarantee with escrow control on repayments, ensuring returns even in the event of buyer default. With altSmart, investors diversify portfolios with stable returns and contribute to economic growth while enjoying a hassle-free investment experience.

Primary Benefits of Investing in Invoice Discounting

1. Short Tenure (30 days to 90 days)
2. Fixed Returns 
3. Not linked to market fluctuations
4. Competitive Yields

Primary Risks

1. Credit Risk (Ability of the borrower to repay)
2. Liquidity risk (Ability to liquidate before maturity)

2. NRE Savings Account

An NRE (Non-Residential External) is a good option for NRIs to park their foreign income (in any currency) and freely transfer it back (repatriate) to the country they reside in whenever needed. These accounts are tax-exempt in India, even for interest earned. The principal and the interest earned in an NRE account are fully repatriable. However, the interest earned is considerably lower than the returns on the invoice discounting products altGraaf provides. 

3. NPS

Indians aged 18 to 60 outside the country can invest in NPS after fulfilling the KYC norms. They can contribute to NPS using the contributions made from NRE/NRO accounts. NPS offers diversification across asset classes. Individuals can choose between Active Choice and Auto Choice fund management schemes but can invest only in the Tier-I option. The minimum account opening contribution is ₹500, and an annual minimum contribution of ₹6,000. NPS holdings are susceptible to market risks, particularly stock investments. Market volatility can influence investment returns, potentially affecting overall retirement savings. Additionally, since NPS is an investment option in India that is primarily meant to create retirement funds, they have an extended lock-in term, limiting liquidity and flexibility until retirement.

Why should one invest in India?

Conventional investment avenues in California, such as 401(k), IRA, college savings accounts, and NRE savings accounts, provide steady yields. However, an investment option in India could be a viable alternative if one is looking to maximize portfolio earnings. When one has fully invested in these traditional options and doesn’t want the savings to remain unutilised, altGraaf’s five novel invoice discounting products present a unique chance to enhance portfolio returns while managing risk.

Who can invest in altGraaf?

• All individuals residing in India
• Individuals residing outside India who have an NRO account

Conclusion

According to a survey, 75% of the Indians residing in the USA plan to return to India after retirement and spend their life in their home country. The ever-evolving economy with emerging start-ups and compounded growth is the best place to invest. With several investment avenues available, altGraaf is on a mission to democratize investment options in India for individual investors. Individuals outside India can now access innovative products for investment in the short term and earn high returns. Before making investment decisions, one should thoroughly review all product information and understand the risks.

Frequently Asked Questions

1. Why should I invest in invoice bill discounting offered by altGraaf?

Short-term investment avenues offer the advantage of liquidity, flexibility, high returns, and short tenure for blocking your capital. Therefore, you can earn exceptionally high returns by investing in short-term plans.

2. Is Invoice Bill Discounting similar to a loan?

Yes, invoice bill discounting is a business loan offered by financial institutions like banks and NBFCs based on bills or invoices provided to the lender. The value of these invoices determines the loan amount.

3. What is an NRE/NRO account, and who can open it?\

• NRE (Non-Resident External): This account lets you hold money earned outside India in either foreign currency  ( in this case, US dollars) or Indian rupees. You can freely transfer these funds back to your home country whenever needed.
• NRO (Non-Resident Ordinary): Once money is transferred to an NRO account, account holders cannot repatriate funds back to their residing country. NRO account is an Indian Rupee account, and all funds can only be in local Indian currency

In short, NRE accounts offer flexibility for holding and transferring funds, while NRO accounts manage money within India, including investment opportunities like altGraaf.