US Stock Market: Stocks marketing is one of the most predominant fields in India today as many people are actively enrolling in this market.
People already a part of this market keep diversifying their interest in various sectors, industries, and market capitalization. Moreover, as India is one of the best developing countries, people are getting more interested in investing globally.
If a person residing in India wants to purchase stocks from the US stock exchanges, can he do so? First, let’s see how it’s done. Then, in this piece of article, we’ll discuss how to invest in the US stock from India?
The US Stock Market
Let’s talk about the US stock market before investing in it.
The US stock market is considered one of the best stock markets, including popular and well-renowned stock exchanges like the NYSE, Nasdaq, Chicago Board Options Exchange (CBOE) etc.
The US stock market is home to many popular stocks like Tesla, Amazon, Apple, Google, etc. The best part is you can buy these stocks and be a part of the growth stories of various companies. Hence diversify beyond the Indian market. You can easily learn how to invest in the US stock market by joining a stock market course.
Why Invest in the US Stock Market?
There are many reasons why one should invest in the US stock market.
1. The US stock market is at the center of global creation, making it an indispensable territory to invest in the companies during the initial stages.
2. The US stock market has transcended the Indian stock market as the US stock indices are less volatile.
3. The US stock market houses many global companies and their stocks which provide the investors with a wide range of sectors and industries to invest their money.
These were some common reasons why people prefer to invest in the US stock from India. So now, let’s see how one can invest in the US stock market from India.
Investing in the US Stock Market
There are two ways to invest in the US stock market from India via direct or indirect methods.
1. Direct Investments
In this method of investment, the investor needs to create an overseas trading account from India with the assistance of domestic or foreign brokers.
- Domestic Broker
You can go with a domestic broker as they are readily available. These brokers have various tie-ups with stockbrokers in the US. They act as an intermediate to perform trades on your behalf.
However, this method might increase your expenses, including certain taxes on currency conversions and brokerage charges. So, calculate all your expenses well in advance to avoid unnecessary losses.
- Foreign broker
An overseas trading account can also be created directly by foreign brokers. So don’t just rush in. Instead, to create an account, study all the brokerage or brokerage firm’s necessary information and services.
2. Indirect Investment
You can be a part of the US stock and hold stocks indirectly. There are two options to invest in the US stock from India indirectly
Mutual funds do not even require creating an overseas trading account. There is a wide variation of mutual funds that directly invest money in the US stock.
You can also invest in mutual funds to save a lot of documentation procedures and excessive taxation on currency exchanges. Always check the expense ratio of that mutual fund scheme before investing in it.
● Investment Apps and ETFs
Modern-day investment apps are also a good source for inventing money directly in the US stock. Moreover, they provide different services to invest in various MNCs, reducing the hustle faced by Indian investors.
ETFs exchange-traded funds are also a good source for active investment in the US stock. The ETFs have both direct and indirect routes. Many Indian ETFs provide International indices.
Many stock market courses are there which can help you in learning the stock market and how you can invest in the US stock from Indian and earn a handsome amount of money. This will help you in the long run.
Points to Remember
These are some important things that one must know before investing in the US stock from India.
1. Liberalized Remittance Scheme (LRS)
The maximum remittance allowed to an individual annually is $ 250,000 US dollars. The RBI introduced this scheme to scale liberalization.
2. Brokerage Charges
Different commodities charge varied rates as they charge a fixed fee per trade or a percentage of total trades. In addition, the investing procedure will require the transfer of Indian currency to the US currency; Banks charge currency conversion fees.
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3. Funding your Brokerage Account
Now that you have created a brokerage account in the US, all the transactions are to be completed in US dollars. You have to remit some money in the brokerage account before you start investing in the US stock.
Investors investing in the US stock are taxed in India. The amount of tax depends on how long the investor holds the investments. When investors hold the investment for about 24 months or more is considered long-term, and the tax rate is up to 20%.
And if less than 24 months, the investment is considered short term and the investment is taxed according to the investor’s income tax slab.
These were some important points to remember before investing in the US stock.
In this article, I’ve mentioned the US Stock, why one should invest in the US Stock, how to invest in the US stock market from India, and points to remember before investing in the US stock.
I hope this article was informative enough to clear all your questions and queries on investment in the US stock market from India.
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