Would you buy an iPhone for Rs 1 lakh or invest in the stock of Apple? If you think the former is easily possible but the latter isn’t because you are in India, think again. You can now buy stocks like Facebook, Apple, Amazon, Netflix and Alphabet (FAANG) right here in India, that too using your mobile phone. There are a number of apps
like Cube Wealth and Vested, and global investing platforms like Stockal.
: Satyen Kothari, founder and CEO of Cube Wealth, says: “Investing in US markets
give your portfolio a geographical diversification. Another reason to invest is to protect your wealth from eroding against the rising value of the dollar. Each time the rupee falls against the dollar, your dollar-denominated assets gain. It also makes sense if you plan to live in the US or have children studying abroad.” The process: After creating an account, you can open a trading account with a brokerage house, as well as perform other regulatory formalities like filling the liberalised remittance scheme form. The minimum amount for investment
is $750 or around Rs 50,000 at current exchange rates. You can buy and sell stocks from the app itself. You get access to 3,400 securities listed on NASDAQ and the NYSE. Keep in mind, your investing (brokerage) account is opened with their partner platform Stockal, and in the US your account is held with clearing services for a firm called DriveWealth. It takes two-three weeks once you do get done with all formalities. To remit funds, it takes five-six days for funds to reach your bank account. Apart from being a transaction platform, it also provides investment
advice for US equities
and allows you to own fractional shares. This method of buying partial shares of stock is fractional share investing. This lets you buy stocks with a high single share price at a much lower entry point, making it an excellent option for new investors.
: Stockal is a global investment
platform, which enables investments
in a diverse set of global assets from a single account. Vinay Bharathwaj, founder and managing director, says: “We power wealth managers, financial advisors, Robo advisory, and large broking companies like HDFC securities to enable their customer to invest in US markets.
” The good part: There’s no minimum investment; fractional stock is available, too. As far as taxation
goes, there is no tax deductible at source in the US. However, you will have to pay short- or long-term capital gains tax, as applicable.
: Vested is a US Securities and Exchange Commission-registered investment adviser. You can invest in US stocks and exchange-traded funds (ETFs) via their app. Once you download the app and submit all the paperwork, you can set the account. There is no account-opening fee, besides unlimited zero-commission trades; it allows you to access over 120 stocks and ETFs.
There is no requirement for minimum balance. And you can buy fractional shares, too. However, you will have to pay $3 upfront and 0.0417 per cent monthly fee for the amount invested in the customised portfolio. For instance, a portfolio called digital cash curates a list of companies that provide products and services in the digital payment ecosystem. According to their website: The shares are held by a third-party custodian in the ‘street name’ of the broker rather than the underlying investor. However, if you want to confirm the share ownership for your Vested account, you can contact its broker partner.
While going through these routes and investing in the US, remember that there is a 25 per cent tax deductible at source applies just on your dividend earnings. However, since the US and India have a double taxation
avoidance agreement, so you pay tax only once.