Last Updated:
Accredited investor status in India allows wealthy individuals to invest in exclusive financial products.
Despite its perks, few use it due to a complex regulatory framework.
In today’s fast-moving financial world, new and special investment instruments have been emerging regularly. Amid a booming stock market and evolving financial services industry, the banks and non-banking financial companies are offering a wide range of products to meet the needs of customers across income groups.
The financial services industry offers an opportunity to invest across multiple asset classes like equities, bonds, government securities, FDs, mutual funds, real estate and gold, among others. However, for certain investment instruments and high-end financial products, only a limited investors qualify to put their money. This is where an accredited investor status helps.
It is a special category for people with higher income or wealth. It allows them to invest in advanced products with fewer rules and more freedom.
Let’s break down what it means and why it matters:
Who Can Be an Accredited Investor?
To become an accredited investor in India, you must meet one of these rules set by the Securities and Exchange Board of India (SEBI):
– Earn Rs 2 crore or more in a year.
– Or have a net worth of Rs 7.5 crore, with at least Rs 3.75 crore in financial assets.
– Or earn Rs 1 crore a year and have a net worth of Rs 5 crore, with Rs 2.5 crore in financial assets.
Why It Matters?
1. You Can Start Investing with Less Money
Usually, to invest in high-end services like Portfolio Management Services (PMS) or Alternative Investment Funds (AIFs), you need a lot of money—Rs 50 lakh or Rs 1 crore. But if you are an accredited investor, you can start with just Rs 10–25 lakh, depending on the product. This makes it easier to invest in different types of instruments while leveraging the liquidity.
2. You Get Access to Special Investment Options
Accredited investors can invest in products not available to regular investors—like venture capital, private equity, Special Situation Funds and even pre-IPO shares. Some of these are available with lower investment amounts, especially in GIFT City, which is India’s international financial hub.
3. More Control and Better Services
Accredited investors often get customised financial services. They may get flexible plans, lower or performance-based fees, and advice that regular investors may not receive. These investors can also be more involved in how their money is managed.
Why So Few People Use It
Even though there are benefits, very few Indians have taken this path. As per an Economic Times report, India has only around 650 accredited investors, compared to over 24 million in the US.
If you meet the criteria, becoming an accredited investor can open the door to better investment options with lower amounts, exclusive deals and more personalised services. It is a useful step for those looking to grow their money smartly.
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al…Read More
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al… Read More
view comments
- Location :
Delhi, India, India
- First Published:
