Investing in US stocks through Indian platforms offers diversification but may come with higher brokerage fees despite potential for returns.
The US stock market hosts some of the world’s leading companies, such as Facebook, Google, Apple, and General Motors. Investing in these stocks enables you to engage in their growth narrative and diversify beyond the Indian stock market. Various Indian platforms facilitate investing in US stocks from India since there are no US stock brokers available in the country.
Investing in foreign stocks has emerged as a growing trend among Indian investors, offering potential for high returns. However, it also entails certain drawbacks such as elevated brokerage fees. Despite the opportunity to invest significant sums in US equities.
How to Invest in US Stock Market from India?
If you’re asking whether it’s possible to invest in the US stock market the answer is yes, you easily can! There are two ways of investing in the US stock market from India:
1.Direct investment in stocks
2.Indirect investment in stocks via mutual funds or ETFs
Direct investment in stocks
When considering direct investment methods, there are two choices available.
Global trading account with domestic broker
Many domestic brokers function as intermediaries, partnering with US stockbrokers to facilitate your trades. You have the option to establish an international trading account through any of these brokers. It may require the submission of various documents to initiate the account opening process.
Depending on the brokerage firm, you may encounter limitations on the types of investments available to you or restrictions on the volume of trades permitted.
Oversea trading account with foreign broker
Another way to trade in international markets from India is by using an international broker that operates in india. Before you open an account with such a broker, make sure you understand all the costs and conditions involved. Research well to find the best broker for buying US stocks from India.
Remember, investing directly may be expensive because of brokerage fees and exchange rate charges. So, it’s important to know all the expenses upfront before you start.
Indirect investment in stocks via mutual funds or ETFs
Mutual Funds
International mutual fund programs offer opportunities for investing in overseas markets. These funds often track indices from various countries in regions like Asia or South America, with a significant focus on the US market.
Exchange-traded funds
Unlike mutual funds, Exchange-Traded Fund (ETF) units are actively traded on the stock market during trading hours. This means you can buy and sell ETF units on the exchanges just like you would with individual stocks.
To trade ETFs, you need to have a demat account with a brokerage firm. Many ETFs offer exposure to indices such as NASDAQ and other significant international indices.
You can use either a domestic or international broker and invest in an Indian ETF that tracks a global index to gain access to US ETFs.
Investment apps
Many startups have developed mobile applications aimed at helping Indian investors participate in the US stock markets. However, it’s important to note that regulatory limitations may restrict certain apps from facilitating intraday trading in the US market from outside India. Therefore, it’s advisable to research and identify some of the top apps for investing in US stocks from India, and then select the most suitable option to proceed with your investment.
What’s the Limit for Investing in US Stocks?
The Reserve Bank of India (RBI) made it possible for Indian residents to invest up to $250,000 (about 1.9 crore rupees) each year in the US market without needing special permissions.
Conclusion
By exploring the option to start trading US stocks from India and entering global markets, you can enhance the diversity of your investment portfolio. With abundant information available, researching and evaluating stocks has become easier.
However, it’s important to note that investing in international stocks has its pros and cons. Make sure to assess all aspects carefully and make investment choices that match your financial goals and tolerance for risk.
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