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Would you like to buy stocks of Apple, Microsoft, Amazon, Google, Netflix or US ETFs? Vested make investing in US stocks such as Apple, Google, Amazon, Berkshire Hathaway, or ETF such as Vanguard’s S&P500 or PowerShares Nasdaq ETF easily from India, and also in fractional parts.  It requires no minimum deposit, charges zero commission, and has a simplified remittance process (INR to USD) via top Indian banks.  This article is about Vested platform to invest in US stock markets. Is investing through Vested safe? How is Vested platform safe to invest? Taxes on investing in the US stock market?

Buy US Stocks from India using Vested

Buy US Stocks from India using Vested

Vested and investing in the US stock market

Vested through its web and app-based platform enables investors from India to invest in US stocks and ETFs easily.  They solve two pain points of investors wanting to invest in US market: foreign investing was too expensive, and the process was very cumbersome.

Vested website is vested.co.in

How can Indians Invest in US Stock Market: International Mutual Funds covers What are the Risks in Investment in the US Stock Market? How to invest? Stocks or International Mutual Funds? and gives ways to invest in the international stock market.

Under the Liberalised Remittance Scheme (LRS) an individual can annually send up to USD $250,000 abroad without seeking approval from the RBI. The LRS has made it easier for Indian residents to study abroad, travel, and make investments in other countries

  • Fractional share investing: popularized by US stock-trading apps like Robinhood and SoFi, allows investors to buy partial shares. Clients can own part of Apple’s stock, instead of needing the full amount to own an entire share. 
  • No minimum balance
  • Have one-time joining fees (Rs 399) but they credit the first $5 as soon as you open an account. 
  • Investments in US equities must be made in USD. You have to wire (remit) USD to Vested’s partner bank in the US to fund your account. The costs involved in Fund transfer varies between INR 500 – 1500 per fund transfer, according to the bank you use. 
    • For this fill out an LRS form (the A2 form) and submit it to your bank. 
    • Currency conversion will also be charged
  • Withdraw anytime: From withdrawal tab in the app or site. The money will be wired directly to your bank account in India. It may take 3 – 5 business days for the wire to come through. Remitting bank will charge a fee for the transfer. Currently, this fee is approximately USD $11. Thus, you must have a minimum of this amount to make a withdrawal.
  • You can create an account in minutes in a paperless way. You need scanned copy of your PAN card and proof of address (You can use Aadhar card, your utility bill, mobile phone bill, bank, or credit card statement. Note: All bills and statements must be within the last 3 months and must have your name on it).

Vested has partnered with broker DriveWealth. DriveWealth is not among the top brokers in the US like Fidelity or Charles Schwab, or popular ones like Robinhood. You can check about it here

Cofounders are Viram Shah from India, Darwin Arifin from Indonesia, Eric Huynh from Hong Kong, and Yinghan Lin from Singapore

Is Investing through Vested Safe?

Vested has partnered with broker DriveWealth. DriveWealth is not among the top brokers in the US like Fidelity or Charles Schwab, or popular ones like Robinhood. You can check about it here

Is DriveWealth a reliable broker?

DriveWealth is not among the top brokers in the US or popular ones like Robinhood. You can check about it here

As per Investopedia, Biggest stock broker firms of US are

  • Fidelity Investments has $8.3 trillion in total customer assets, 30.6 million active brokerage accounts, and is a good choice for customers who want to invest in Fidelity ETFs and mutual funds.
  • Charles Schwab is a leading U.S. stock brokerage firm with $4.04 trillion in client assets and 12.3 million active brokerage accounts.
  • E*TRADE is an online brokerage pioneer, well-known for its full-featured mobile apps, top-notch options trading tools, and customizable user experience.
  • TD Ameritrade Because of its extensive research and investor education tools aimed at all levels of investing expertise,  is a top choice for active and new investors alike.

What will happen if Vested shuts down?

Your assets are held at a 3rd party custodian, and Vested does not ever touch or hold your money.

When you invest through Vested, you can see your holdings in their app/website.  But you do not receive direct emails from the custodian regarding your holdings.

Shares are held by a third-party custodian in the ‘street name’ of the broker rather than the underlying investor. This is why as per SEC guidelines(the equivalent of SEBI), if you want to confirm the share ownership for your Vested account, you can contact DriveWealth, their broker partner, directly at support@drivewealth.com.

If Vested shuts down, you would still have access to all your cash and securities, as we will ensure that direct DriveWealth access is established for you to continue to buy or sell securities.

Each brokerage account opened with Vested is insured by SIPC (Securities Investor Protection Corporation) up to $500,000 including $250,000 in cash. In the highly unlikely event that both Vested and DriveWealth shut down, SIPC insurance kicks in. For more details, please read here

How easy it is to use Vested?

Vested offers a simple dashboard to buy, sell shares, track portfolio value, total investment amount, cash amount, analysis of daily returns, total returns for each stock or ETF invested in, stock performance charts, investment data, share information, and more. 

The app also shows a sector-wise breakdown of US stock performance and brings the latest finance news and insights from The Financial Times, Bloomberg and other sources.

Investors can even generate tax documents on the app to produce in front of tax authorities at the end of every financial year.

Invested in Vests

Vests are curated baskets of stocks and ETFs that represent different types of portfolio strategy. With Vests, investors from India can easily invest in different portfolios across multiple asset classes and strategies.

Video on how to buy stocks and Vests

Taxes on Investing in US

There are two types of taxes when you invest in shares and ETF in the US. One is Tax when you sell the shares and others if you get the dividend.

Taxes on Buying the Shares in US Market

There is no tax on buying the shares in the US market. But you need to show it in your income tax returns and you cannot use ITR1 if you hold foreign shares. The image below from our article Declare ESPP,ESOP,RSU of MNC in ITR as Foreign Assets shows it.

How to show RSU, ESPP in Foreign Assets

How to show RSU, ESPP in Foreign Assets

Taxes on investment gains

This happens When you sell the shares.

One will be taxed in India for this gain. You will not be taxed in the US.

The amount of taxes you have to pay in India depends on how long you hold the investment.

  • If you hold for less than 24 months, it comes under short-term capital gain and is taxed according to your income tax slab
  • If you hold for more than 24 months is comes under the long-term capital gain threshold and the tax rate is 20% with indexation benefit.

Taxes on dividends from US Stocks

Unlike investment gains, dividends will be taxed in the US at a flat rate of 25%.

But the US and India have a Double Taxation Avoidance Agreement (DTAA), which allows taxpayers to offset income tax already paid in the US. The 25% tax you already paid in the US is made available as Foreign Tax Credit and can be used to offset your income tax payable in India.

If any tax is deducted in US then US IRS department will send Form similar to Form 16 to your address.

If any tax is deducted, you can claim it in your ITR as shown below from our article Dividend and Tax: DDT, Dividend from Stocks, Mutual Funds

ITR DTAA tax

ITR DTAA tax

For details visit Vested website is vested.co.in

Disclaimer:  This article is for informational purpose. Please consult your financial advisor before investing.

Related Articles:

Do you invest in US stock markets? Do you want to use platforms like Vested to buy US stock market.

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