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How to Invest in the US Stock Market From India?

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"How to Invest in the US Stock Market From India?"

Shefaali Bopana

Things you need to know before investing in US Stocks, simplified to a T

<p>If you’re among the 11 crore Indians investing in the Indian stock market, you’ve taken the first step towards long-term wealth creation. But like all good wealth management handbooks, diversification must be factored in.&nbsp;</p><p>For instance, investing in another market allows you to grow some of your wealth, even if one market isn’t doing particularly well temporarily.</p><p>With companies like Amazon, Apple, and Meta (Facebook), the US stock market presents a one-of-a-kind investment opportunity. This means the total pool of invested money in these stocks is trillions of dollars, making them relatively safer.</p><p>In this blog, we explore how one can invest in the US stock market from India and buy US Stocks from India.</p><p>&nbsp;</p><h1 class="sc-eCImPb eYhuMr" style="-webkit-text-stroke-width:0px;background-color:rgb(246, 246, 249);border-width:0px;box-sizing:border-box;color:rgb(50, 50, 77);font-family:-apple-system, &quot;system-ui&quot;, &quot;Segoe UI&quot;, Roboto, Oxygen, Ubuntu, Cantarell, &quot;Open Sans&quot;, &quot;Helvetica Neue&quot;, sans-serif;font-feature-settings:inherit;font-kerning:inherit;font-optical-sizing:inherit;font-size-adjust:inherit;font-size:2rem;font-stretch:inherit;font-style:normal;font-variant-alternates:inherit;font-variant-caps:normal;font-variant-east-asian:inherit;font-variant-emoji:inherit;font-variant-ligatures:normal;font-variant-numeric:inherit;font-variant-position:inherit;font-variation-settings:inherit;letter-spacing:normal;line-height:1.25;margin:0px;orphans:2;padding:0px;text-align:start;text-decoration-color:initial;text-decoration-style:initial;text-decoration-thickness:initial;text-indent:0px;text-transform:none;vertical-align:baseline;white-space:normal;widows:2;word-spacing:0px;"><strong>How to Invest in the US Stock Market From India?</strong></h1><h3>1. Via Direct Investments</h3><p>&nbsp;</p><h4>A. Overseas Trading Account with a Domestic Broker</h4><p>To start<a target="_blank" rel="noopener noreferrer" href="https://fi.money/us-stocks"> investing in the US stock market</a> from India, you can open an overseas trading account with a domestic brokerage firm that has tie-ups with US brokers.</p><p>In this method, your domestic broker will act as an intermediary, facilitating and executing your trades. However, depending on the broker, you might have to weather trade caps and restrictions on investment vehicles.</p><h4>B. Overseas Trading Account with an International Broker</h4><p>This route allows you to tap into the US stock market without intermediaries.</p><p>You can opt for foreign brokers like Ameritrade, Charles Schwab, and others with an Indian presence to start directly investing in the US stock market.</p><h4>C. NSE IFSC</h4><p>You can also trade US stocks through the NSE IFSC, a wholly-owned subsidiary of the National Stock Exchange (NSE). You will need a new demat account with an IFSCA-licensed broker to start investing in US stocks.</p><p>It’s important to know that investors can only invest in 25 US stock options, including Amazon, Apple, Microsoft, Walmart and others. However, the total number is set to go up to 50 in the near future.</p><h3>2. Via Indirect Investments</h3><p>&nbsp;</p><h4>A. Mutual Funds</h4><p>You can <a target="_blank" rel="noopener noreferrer" href="https://fi.money/guides/us-stocks/how-to-invest-in-us-stocks-via-mutual-funds">invest in US Stocks via Mutual Funds</a> . This lets you forego the costs of an overseas trading account. This investment route allows you to diversify your investment across various asset classes and industries.</p><p>However, currently, the MF route remains partially restricted. As per government directives, investment through this route is paused as international mutual fund investments have already met the 7 billion industry cap.</p><h4>B. ETFs</h4><p>There are two ways of <a target="_blank" rel="noopener noreferrer" href="https://fi.money/guides/investments/exchange-traded-funds-and-their-advantages-explained">investing through ETFs</a> or Exchange Traded Funds . The first entails purchasing US ETFs via a domestic or foreign broker. The second is the indirect route, where you can purchase Indian ETFs of US indices.</p><p>The lower expense ratio of ETFs makes them more favourable options than actively managed funds.</p><h3>3. Explore US Stocks from India on Fi Money</h3><p>Investing on the Fi app allows you to invest directly into US stocks from India. Fi Money partners with SEC-regulated American brokerage firms who buy and hold stocks on your behalf. Some advantages of investing in US stocks through Fi Money include:</p><ul role="list"><li>Real-time investing</li><li>Zero brokerage or commissions</li><li>Invest in fractional stocks with amounts as low as ₹100</li><li>Paperless account creation</li><li>Zero withdrawal charges</li></ul><p>If you’re an existing Fi user, you should be able to start investing right away. If not, <a target="_blank" rel="noopener noreferrer" href="https://fi.money/open-savings-account-online">opening an account through Fi</a> should take you all of 5 minutes, after which you should be ready to go!</p><blockquote><p>Read up about <a target="_blank" rel="noopener noreferrer" href="https://fi.money/guides/us-stocks/us-stock-market-timings-how-they-affect-india">US stock market timings</a> and how they affect India.</p></blockquote><h2>5 Reasons Why You Should Buy US Stocks From India</h2><p>Here are the top 5 reasons why you should buy US stocks from India:</p><h3>1. Portfolio Diversification</h3><p>Diversifying your portfolio helps weather market-linked fluctuations. By investing in US stocks from India, you broaden your investment exposure. This allows you to mitigate economic risks associated with the crests and troughs in the Indian market.</p><h3>2. Opportunity to Invest in Top Companies</h3><p>Investing in the US stock market from India gives you access to several blue-chip companies like Amazon, Apple, Tesla and others. The sheer size, trade volume and investment options in the US stock market present a unique investment opportunity.</p><h3>3. Tapping into Innovation</h3><p>As the nerve centre of innovation, the United States is home to thousands of promising enterprises. With segments like robotics, AI, ML and biomedicine flourishing, investing in US stocks helps you grow your wealth on the back of all the ground-breaking progress being made.&nbsp;</p><p>You can tap into this growth potential of budding innovative ventures and reap the benefits of an early bird entry.</p><h3>4. Potential Currency Gains</h3><p>Currency exchange rates add to the gains you derive from investing in the US stock market. The US dollar was at ₹63 in January 2018 and stood at ₹83 as of January 2023. That’s a 30% appreciation in 5 years. Investing in US stocks also lets you gain from the sheer value of dollar growth.</p><h3>5. Higher Returns with Less Volatility</h3><p>While all markets go through ups and downs, the Indian stock market has recorded bigger swings than the US. Besides the Russo-Ukrainian conflict of 2022, which shook most global markets, the relative stability and manageable cyclical changes in the US market make it a less volatile option for investors. This, coupled with the consistent appreciation of the Dollar, has ensured stable returns for investors.</p><h2>Things to Consider Before Buying US Stocks from India</h2><p>If you’re thinking about starting your investment journey in the US stock market from India, here’s a list of things you should keep in mind:</p><h3>Taxation</h3><p>Your profits from investments in the US stock market are covered under the DTAA or Double Tax Avoidance Agreement. As per the agreement, the same income cannot be taxed twice. Dividend income from <a target="_blank" rel="noopener noreferrer" href="https://fi.money/guides/us-stocks/tax-implications-of-investing-in-us-stocks">US stock investments is taxed</a> at 25% for Indians and can be claimed as a Foreign Tax Credit on domestic tax filings (due to DTAA).</p><p>While capital gains are immune from taxation in the US, in India, there’s a 20% <a target="_blank" rel="noopener noreferrer" href="https://fi.money/guides/personal-finance/what-is-long-term-capital-gains-tax">long-term capital gains tax</a> levied for holdings of two years or more. Capital gains for a short-term holding (less than two years) are added to your annual income and taxed as per your income slab.</p><h3>Investment Cap</h3><p>Investments in the US stock market are regulated as per the Liberalised Remittance Scheme or LRS. The LRS mandates a yearly investment cap of $250,000 per investor. Your investments have to remain within this stated investment cap.</p><h3>Ancillary Charges</h3><p>Apart from taxes levied on your returns, there are other charges you’ll have to shoulder when investing in US stocks from India. From brokerage fees, FX conversion charges and transaction fees to annual maintenance fees, there are quite a few overheads to consider.</p><p>Unless you’re investing in US stocks through <a target="_blank" rel="noopener noreferrer" href="https://fi.money/">Fi Money</a> , you need to pay no extra brokerage or commissions.</p><h3>Investment Goals</h3><p>Your investment strategy should be centred around your investment goals. In other words, your approach should ideally reflect your life goals - whether you wish to relocate, fund your child’s education or simply build a corpus for your retirement. Once you’ve figured out your investment goals, you can pick an investment avenue - direct or indirect- that best suits this purpose.</p><h2>Conclusion</h2><p>Like most things that have gone remote after the pandemic, you can invest in US stock from India online. It’s a lot like investing in Indian stocks except, you can also buy fractional shares. The top stocks in the US market have a market capitalisation that runs into trillions of dollars, making them substantially safer to invest in too! This lets you grow your wealth on the back of all the advancements in the global market.</p><h2>Explore US Stocks on Fi Money</h2><p>Fi Money helps you to invest in top US companies — at industry-best forex rates. So you can own shares in Apple, Tesla, Microsoft, and so on! With an intuitive user interface, Fi simplifies the world of US Stocks. Besides in-app explainers, novice investors can use Curated Collections (like All-Time Favourites) to make decisions. Seasoned investors can dive deeper, apply many filters (like Stock Price) &amp; pick from a wide range of international options. What's more, on Fi, you can buy US Stocks instantly with zero brokerage fees.</p><h2>Frequently Asked Questions</h2><h3>1. Can I invest in NASDAQ from India?</h3><p>Yes. You can invest in NASDAQ from India via direct or indirect investment routes. As per the direct routes, you can open an overseas trading account with a domestic or international brokerage firm. Alternatively, you can start investing via the indirect path through mutual funds and ETFs.</p><h3>2. Should I invest in US Stocks for the short term?</h3><p>As such, stocks are not favourable short-term investment vehicles. Stocks perform better in the long run, offering higher returns than most other investment tools. Thus, when it comes to US stocks, investing in them for the long run would be a better option.</p><h3>3. How can I invest in US stocks from India?</h3><p>There are plenty of ways. Apps like Fi Money are great places to begin. While they’re both fully digital, Fi Money allows you to invest at no additional cost, in real-time and even lets you start with amounts as low as ₹100.</p><h3>4. How many people invest in the stock market in India?</h3><p>It is estimated that only 3% of Indian households are actively investing in the stock market in India.</p><h3>5. Where to buy US shares online in India?</h3><p>Fi Money helps you to invest in top US companies — at industry-best forex rates.</p>

Invest in US Stocks from India: A Simple Guide | Fi Money

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