For me, I have good portion of my money invested in Indian IT stocks and from sometime I am feeling that I should shift IT portion of my portfolio to US stocks with only downside as I wont get margin or can do covered calls. My plan is to hold 10-15 years with regular SIPs.
Also, Those who do not directly invest in crypto, Have you thought about investing in crypto via stocks, ETFs?
Right now my portfolio is not that big, hence it does not make sense for me to buy US stocks directly as a considerable sum would be spent just on buying or selling stocks. Instead, I have opted to invest in Mutual Funds which also invest their money in foreign companies and securities. This way I get foreign stock exposure not limited to just the US and I am able to continue my SIP with discipline in those stocks. The headache is also less and managing such a portfolio also becomes quite easy.
Ill check out those brokers. In my very quick research I came across ‘vested’ and found it decent. (User interface).
2. If you dont mind sharing, What strategy do you follow. I know this cannot be a straight fwd answer but just want to know your thoughts.
Having an account with a US Broker is the best way to go. I personally do not trade in US Stocks regularly, just bought a few for the kicks, but I like tinkering with financial services and seeing what they are upto
Using vested since 6-7 months or so, would like to share my experience…
Account opening: process is quite simple. Download their app and submit details. Account will be ready in couple of days.
Customer support is okish but they have like 3 representatives and may take over 2 hours to reply mid chat.
Sometimes even longer.
Stay alert of good faith voilation(GFV). Basically means if you sell your holdings and buy new shares with that money then you have to wait till t+2 days before you sell the new shares. Three GFVs in a year will restrict you and then you can only perform trades with settled money.
Had very poor experience in this aspect. I have 1 GFV and Vested has now restricted my account and now i can only place orders after i receive money on t+2 day. Not solved as of yet.
Check prices on tradingview before placing any order as app lags and prices take time to update. Place limit orders only.
Fees: Transfer from any bank to vested in dollars will result in atleast 3-5% loss in conversion. Banks will charge gst on top.
Vested has a tie up with SBM bank to allow transfers at faster and better rates. This way it will be 1-2% in conversion. Transfers may take 1-2 days.
Withdrawal: Vested has a 11$ withdrawal fee. Apart from this you will again lose 2-5% in conversion depending on your bank.
Overall this means that a to-and-fro transfer of money will cost you almost 3-10% loss due to conversion rates. This means for breakeven you need atleast 10% gains.
Taxes: ITR filing will become a little more complex with foreign holdings.
If you send more than 7 lac INR abroad then you will have to pay TCS of 5% on the amount above 7 lac while sending. For example; sending 10 lac will have 15000 as tcs.(5% of 3 lacs)
All stocks may not be available on vested. They may also prevent trading like they did during gamestop saga.
For those trying to buy fractional shares; these can be bought only at market price and no limit orders are allowed
Okay, might be a noob follow-up question here, but:
Applications like Grow and IndMondey, claim to help us invest in US stocks directly without commission. (Of course, there are remittance charges for USD-INR).
But what is the catch? Why is not everyone talking about them?
Are they helping us buy stocks directly or are they investing in US ETF’s?
Also, how are they allowing us to buy fractional shares? @2percent_trader
Thank you for sharing your experience!
I knew something was cooking when every youtuber was talking about vested.
and 10% is too much!! I know there is some amount that you have to pay to transfer money but thought the amount is fixed w.r.t a bank (like 300-500rs)
And you are right, they don’t have all the stocks listed on the platform.
I don’t think that is possible, may be they don’t charge anything. But exchange costs and other commisions will be there.
It will probably NOT be 100% free.
on an average there is an overall mark-up of about 2-3% on forex conversion if you can figure out a good bank for transfer purposes. that’s just a few hours of googling for you.
you are also hedged against the INR with USD holdings but that depends on your time horizon of holding.
All entities who are not brokers themselves giving you access to the exchange are going to make money as an additional layer of intermediaries. So, read their terms carefully and figure out where you are paying them and if that is acceptable to you.
Thanks for this detailed response. Can you please guide any useful resources that discusses in depth on the various options available in India to invest in US Stocks - GIFT IFSC NSE Option, BSE India INX, Vested, Ind Money or Groww?
Primarily I am stuck on deciding between BSE India INX or Vested/Ind Money ? My main goal is to buy and hold US stocks/ETF for more than 10 years for diversification. I am concerned about safety of the securities with Vested or Ind Money in the long run. If these firm go bankrupt or if drive wealth goes bankrupt, what option would retail investors have? Is it safer if I go with BSE India NIX? With GIFT IFSC NSE Option, I feel the charges would end up high since there are a lot of layers and there also I don’t own shares of US Stocks so that makes me a bit uncomfortable. Can someone who has already been doing this for a substantial amount of time guide in this regard? Is interactive brokers safer than the rest?