r2i forum

Hello friends,

I have seen lot of interesting posts and great responses here that encouraged me to put up my query too. I have been in the US for last 2.5 years on H1b, with spouse and a 3 years baby, and planning to R2I in 3-5 years.

I too have a question for you all experienced people regarding depriciating dollar and appreciating IND Rs. I have around $70K savings, seeing dollar depriciating, thinking of transferring it to NRE account. Would you please share your experiences, how you all are managing this depriciation with your savings. I too have monthly saving around of $3500 to invest or transfer every month.

Can anyone confirm if I need to pay TDS on FDs in India in NRE accounts.

The options I have are as follows:

1. Convert USD to Euros (As suggested by some)
2. Transfer to my parents IND a/c for FDs
3. Transfer to my NRE/NRO a/c for FDs
4. Leave it in US iteself, hoping it will appreciate again in 1-2 years
5. Transfer to India and buy a property in there (U.P/Delhi)

I'll appreciate if you all can share your thoughts on this
and suggest some methods and how you are handling this!

Thank you.
TDesi

If you are sure to R2I in 3-5 years, its best to buy a house in Noida/Gurgaon close to where most of the companies are located. With HDFC and other banks cutting interest rates on home loans, there will soon be a surge in property values again. I think its the right time to invest in real estate in India now.

http://publication.samachar.com/pub_article.php?id=302810

TDesi,

Just curious. Does your spouse also work? I am wondering how you are able to save $3500 per month

r2i_soon,

I can see how it can be done whether if TDESI's spouse works or not. These are all assumptions of course...

With single income here is how I think it can be done...

$3500 savings/month = $42,000
$4000 Family Expenses/Month = $48,000
Taxes/Year = $25,000 (Approx)

Salary = $42000+$48000+$25000 = $115,000

So with single income, if you have a salary of 115,000 one can generate 3500 savings by controlling monthly expenses. In places like Bay Area/Seattle, that salary is common...

If he is dual income, you do the math. The taxes will go up a bit upto 40,000 assuming TDESI doesn't own a house or have any other deductions. The expenses will go up too because of the baby day care expenses.

anyway...it is not out of th eordinary to save that kind of money per month.

-Desibhai.

Truely_Desi;47192Hello friends,

I have seen lot of interesting posts and great responses here that encouraged me to put up my query too. I have been in the US for last 2.5 years on H1b, with spouse and a 3 years baby, and planning to R2I in 3-5 years.

I too have a question for you all experienced people regarding depriciating dollar and appreciating IND Rs. I have around $70K savings, seeing dollar depriciating, thinking of transferring it to NRE account. Would you please share your experiences, how you all are managing this depriciation with your savings. I too have monthly saving around of $3500 to invest or transfer every month.

Can anyone confirm if I need to pay TDS on FDs in India in NRE accounts.

The options I have are as follows:

1. Convert USD to Euros (As suggested by some)
2. Transfer to my parents IND a/c for FDs
3. Transfer to my NRE/NRO a/c for FDs
4. Leave it in US iteself, hoping it will appreciate again in 1-2 years
5. Transfer to India and buy a property in there (U.P/Delhi)

I'll appreciate if you all can share your thoughts on this
and suggest some methods and how you are handling this!

Thank you.
TDesi

I don't see any FD in a Rupee a/c being exempted from TDS. You don't have to pay, will be taken out automatically..:)

truely_desi,

Sorry...I didn't address your question with my previous post.

Whether to hedge or not depends largely on your assumptions in both short term and long term...

In my opinion, worrying too much about currency fluctuations and trying to hedge in the short term at an individual level is bit of over reaction. I can certainly understand if you are a high networth individual looking for sophisticated strategies, but in any timeframe trying to figure out the currency direction is more like betting on roulette wheel in vegas.

Even an investor like Warren Buffet bet against dollar much earlier than the dollar depreciation started and lost billions (not that it matters to him). And, think about this, no one even predicted the Rupee appreciation until after it has started and was well underway....

Also, from a contrarian stand point, when all you see in the Media is USD depreciation and it being at multidecade lows against other currencies, do you think this is the right time to bet against dollar?

Having said that, If you plan to invest in India for the long term and don't mind moving all your assets (money) out of the US then I'd say by all means do it now.

I tend think that with all the growth in India, Indian Real estate market in the long term is not a bad choice for invetsment.

Personally, I like to diversify my investments across india and the US for the long term, even if I move to India. (Currently, I dont have any plan btw). I have a 70% (US) / 30% (India) split right now for all my investments and that is my target allocation.

I dont worry about the fluctuations since I can't predict them and in the long term it will even itself out because of the cycles.

-Desibhai.

truely_desi,

To be very specific, if I were to be in your shoes and pick one of the 5 options you presented, I'll go with option 5, Move all the money now and Invest in Indian Real Estate now.

My recommendation is based on the following assumptions:

1. I'll not need to have any money in the US.
2. I'm moving to India permanently.
3. Indian RE will do better in the long run and outpace the currency fluctuations.
4. All RE investments are for long term (5-10 Years)

- Desibhai.

Thank you Desibhai for your responses.

I have been monitoring dollar value for last couple of months and seeing it depritiating everyday, I got concerned for losing money as I have a definite plan to R2I in around 3 years time.

I am also curious how other NRIs are handling this who have plans to R2I in future.

@Desibhai

I am new to Investment in stock/bonds. Can you suggest something where I can invest some money in US itself for 1-2 yrs, with little risk factor.

Thanks,

TDesi

Truely_Desi;47257@Desibhai

I am new to Investment in stock/bonds. Can you suggest something where I can invest some money in US itself for 1-2 yrs, with little risk factor.

Thanks,

TDesi

Best bet (in this case) would be to keep ur money in a highyield savings a/c such as fnbodirect.com or emigrant.