How To Invest In US Stock Market From India: Complete Guide

Investing in the US stock market provides a great opportunity for investors looking to diversify their portfolios. However, the process can seem daunting, especially for first-time investors. In this article, we explore a step-by-step guide on how to invest in the US stock market.

Invest In US: Step By Step Guide

There are two ways to invest in the US, first is direct investment in stocks, and second is indirectly via mutual funds or ETFs

1. Foreign Account With Domestic Broker.

Opening a trading account with a broker is the easiest and most direct way of trading in foreign markets. These brokers act as intermediaries to execute your trade, via an overseas trading account. However, many of these brokerage firms have limitations and the cost of investing can be high. Some popular brokers in India include ICICI, HDFC, and Kotak. You need to open a three-in-one account that links your demat, savings, and trading accounts. You can buy fractional shares if you want to invest in expensive stocks.

2. Overseas Account with Foreign Broker

These domestic brokerage firms include Charles Schwab, Ameritrade, Interactive Brokers, etc. Please do the research for fees and other charges. After picking your brokerage platform, you will have to provide identification documents like a passport, PAN, proof of address, etc. The fund can be transferred from your Indian bank account to a US brokerage account using the Liberalized Remittance Scheme (LRS). Indians can remit up to $250,000 per year abroad for investments.

3. Mutual Funds

For this, you have to open an overseas trading account or you have to maintain a minimum amount which can be the case with some stockbrokers who invest internationally.

4. Exchange Traded Funds (ETF)

You can purchase ETF directly via a domestic broker or indirectly via an international broker or purchase Indian ETFs of international indices.

Invest In US: Limits

The Reserve Bank of India ( RBI ) permits $2,50,000 in investment (Rs 1.9 crore) per year without any special permissions.

Why Invest In The US

• Investing in the US helps reduce risk by providing investment opportunities abroad. This is particularly true for the US because its is home to some of the leading companies in the world.
• Investing in US stocks means your money will appreciate in Dollars, as against the Rupee .
• The US stock market has historically been more stable than the Indian stock market.

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