US Stock Exchanges, such as NASDAQ and New York Stock Exchange (NYSE), are home to some of the best-performing securities. These include Meta, Tesla, Apple, Amazon, Google, etc. Different Indian platforms allow you to invest in US stocks as there are no stockbrokers for US securities.
Here are some of the benefits of US stock trading:
Portfolio Diversification: By investing in US stocks, you not only get exposure to US companies but can also buy stocks of top companies from various countries
Opportunity to Invest in High-Potential Companies: US stocks allow you to invest in innovative companies across industries having a high potential for growth
Higher Returns: Historically, the US stock markets have experienced lesser volatility compared to Indian markets and have given much higher returns
Fractional investing enables you to invest in the priciest shares and Exchange-Traded Funds (ETFs) for as little as US$1. As their name suggests, you can invest in a portion of a whole share with fractional investing.
This allows new investors with smaller portfolios to diversify them and invest in companies that may be out of reach. You can buy fraction shares in the following ways:
A company boosts the share count of its shareholders by splitting its stock. For instance, in a 3:2 split, you can receive 22-and-a-half shares if you own 15 shares.
A DRIP allows you to invest the dividend from a stock to purchase new shares, resulting in you owning fractional shares.
In case of a merger or acquisition, companies use a ratio to exchange or combine stocks. You can end up with fractional shares in such cases.
Earlier, there were three ways to invest in foreign stocks. You could invest in US-based stocks through an international mutual fund, American Depository Receipts (ADRs) or a US stock trading platform.
From March 2022 onwards,
you can also invest in top US-based companies in the NSE IFSC (International Financial Service Centre) Exchange.
Located in Gujarat’s GIFT (Gujarat International Finance Tech) City, you can buy eight top stocks from the US markets. These include Microsoft, Amazon, Netflix, Meta, Walmart, Apple, Alphabet and Tesla. The number of stocks will rise to cover the top 50 companies based in the US markets.
However, you cannot invest in US stocks with your domestic demat account. Here are the steps you need to follow:
Step 1: Open a special demat account with GIFT City IFSC Exchange or a US-registered stock broker
Step 2: Transfer funds from your Indian bank account to the demat and trading account registered with the broker
Step 3: You can begin trading after the currency conversion and transfer to the demat account
Check the following table to learn about the trading time in the two primary stock market exchanges in the USA, NASDAQ and NYSE:
2:30 PM - 8:00 PM
2:30 PM - 8:00 PM
8:00 PM - 2:30 AM
8:00 PM - 1:30 AM
2:30 AM - 6:30 AM
2:30 AM - 6:30 AM
These hours witness the most active trading in the US markets. Stock prices keep updating during these hours based on the buying and selling activities.
These hours allow investors to trade before and after the regular trading hours, offering flexibility and enabling you to react to the real-time developments.
Investing in US stocks involves various charges, such as brokerage fees, Forex charges, and so on. It is crucial to know about these charges as they impact your overall earnings.
Exchange rate from USD to INR
Depends on your bank
Varies from 0 to $10, depending on trade transactions
Varies depending on the bank
Tax Collected at Source (TCS)
Up to 5% on all remittances above ₹7 Lakhs
Disclaimer: The charges can vary at the discretion of the brokerage firm and the bank.
There is no citizenship requirement for investment in US Stocks. Hence, Indian citizens can also invest in US stocks. However, non-US citizens need to fulfil certain additional requirements under the Patriot Act of 2001.
One crucial element that you cannot overlook when investing in US stocks is taxation. Indian investors are subject to both the US and Indian tax laws.
The US tax laws levy taxes on the dividend income earned by Indian investors. Additionally, the investment may also be subject to capital gains taxation in India. However, the Double Taxation Avoidance Agreement (DTAA) protects investors from double taxation as you can claim a Foreign Tax Credit in India.
Indian equities are also a great option to invest in, as many of them offer high returns while avoiding paying Forex charges. On Bajaj Markets, you can easily compare and invest in various equity-based mutual funds in India.
International investment is not supervised by any regulatory body in India. Thus, any claim or dispute relating to such investment or enforcement of any agreement/contract /claim will not be under laws and regulations of the recognised stock exchanges and investor protection under Indian Securities Law. The account opening process will be carried out on Vested platform and Bajaj Financial Securities Limited will not have any role in it.”
Bajaj Finserv Direct Limited is only acting as lead referral of Bajaj Financial Securities Limited for US investments. Bajaj Financial Securities Limited has tied up with Vested Inc for US investment.”
As per the RBI’s Liberalized Remittance Scheme (LRS), Indians can invest up to $250,000 in US stocks annually.
There are two ways of investing in the US stock market. You can opt for a direct investment route or invest via Exchange Traded Funds (ETFs). In both cases, you require a broker to help you purchase US stocks.
You can buy and sell as little as 0.0001 shares of any US stocks.
Yes, Indians can invest in US futures and options (F&O) from the NASDAQ Exchange.