Your guide to investing in the US and global stocks through the LRS route

Investing in US stocks allows Indian investors to own a slice of the world’s most influential companies, while global exchange-traded funds (ETFs) provide an avenue to diversify portfolios beyond domestic markets. While India’s mutual fund (MF) industry has hit the Reserve Bank of India’s $7 billion cap for overseas investments, platforms such as Vested Finance, INDmoney, and Appreciate offer an alternative route for Indian investors to access US markets through the Liberalized Remittance Scheme (LRS).

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How it works

Under the Liberalized Remittance Scheme, Indian residents are allowed to remit up to $250,000 annually. Platforms like Vested Finance, INDmoney, and Appreciate have leveraged this provision to simplify US stock and ETF investments.

The process begins with a Know Your Customer (KYC) verification, which is fully digital across all three platforms. “The KYC process on the INDmoney app is entirely digital and takes just a few minutes to complete,” says Ashish Kashyap, founder and CEO of INDmoney. “All you need is your PAN card and Aadhaar details.”

Appreciate offers a similar experience. “The KYC process on the Appreciate app can be completed in 5-6 minutes using just your PAN card and Aadhaar,” explains Shlok Srivastav, co-founder and COO of Appreciate. Vested Finance, likewise, provides a quick and hassle-free process, allowing users to complete their KYC in under five minutes.

Once the KYC process is completed, the next step is linking your bank account and setting up an LRS account. Platforms like INDmoney and Appreciate integrate these steps directly into their onboarding process, ensuring minimal friction.

On Appreciate, for example, users are required to open a zero-balance savings account with Yes Bank, which is then linked to the platform for investment purposes. “We are also in the process of integrating with more banks to provide our customers with additional options,” Srivastav adds.

Vested Finance allows users to transfer funds from any Indian bank, although it has partnerships with HDFC Bank, ICICI Bank, and Axis Bank that enable transfers within one business day. Transfers from other banks may take three to four business days.

For INDmoney, transfers can be made using HDFC Bank, Axis Bank, or Federal Bank. Users may also link any bank account for withdrawal purposes.

Once linked, the platform creates a US stock wallet for seamless transactions in US-listed securities. This wallet, managed by broker-dealer DriveWealth, ensures secure transactions. Fund transfers between your Indian bank account and the US wallet typically take 8-24 hours.

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“Once your LRS account is set up and funds are transferred, you can start investing in US equities,” explains Viram Shah, founder and CEO of Vested Finance. “The US wallet within the app is hosted with DriveWealth, a registered broker-dealer in the US, ensuring your investments are securely held in a US-regulated entity.”

Costs and charges

While setting up an account is free across platforms, transaction fees vary.

Currency conversion and brokerage fees differ from one platform to another. For INDmoney, banks charge an interchange rate ranging from 0.40% to 1.5%. Vested Finance and Appreciate typically apply a foreign exchange (FX) markup of 1-1.2%. 

Brokerage fees for INDmoney are 0.25% of the trade amount, while Appreciate charges ₹5 or 0.05%, whichever is higher. Both platforms do not impose withdrawal fees, making them cost-effective options. Vested Finance charges a brokerage fee of 0.25% of the trade amount, plus $5 per withdrawal.

US-registered brokers like Interactive Brokers, which has a presence in India, also offer similar services.

Investors should also consider the tax implications when investing in U.S. stocks. Dividends are subject to a 25% withholding tax in the US, but this can be claimed back or offset against Indian income tax liabilities.

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US withholding tax refers to the portion of income deducted at source before it reaches the recipient. For instance, a $100 dividend from a US company would incur a $25 withholding tax. As dividends are taxed at the Indian slab rate, including those from foreign stocks, this withholding tax can be offset against that liability. 

Capital gains taxes are applied in India, not the US. Long-term capital gains (LTCG) tax is levied at 12.5% if the stocks are held for over 24 months, while short-term capital gains (STCG) are taxed according to the investor’s income tax bracket.

Moreover, if annual remittances exceed ₹7 lakh, a 20% Tax Collected at Source (TCS) applies. This TCS can be claimed in the investor’s income tax return or adjusted against other tax liabilities. Additionally, the US imposes an estate duty on non-residents for balances exceeding $60,000. Indian investors are also required to report foreign assets and income in Schedule FA of their Income Tax Return. Non-compliance could result in penalties under the Black Money Act.

User trends

Indian investors are increasingly turning to U.S. stocks for diversification and growth. On Vested, trading volumes surged by 177% in 2024, driven by interest in tech giants like NVIDIA and Tesla, as well as niche markets such as crypto ETFs and leveraged ETFs. 

“Tech stocks continue to dominate, but there’s growing interest in alternative investments like crypto ETFs,” notes Shah.

Appreciate has experienced rapid growth since its launch last year, with the average ticket size growing sevenfold. Investors on the platform typically execute 4-5 trades per month, with average LRS order values ranging from ₹9,000 to ₹10,000.

Final thoughts

Platforms like Vested Finance, INDmoney, and Appreciate are transforming how Indian investors access US. markets. With streamlined KYC processes, integrated bank linking, and secure US wallets, these platforms make global investing more accessible and efficient. “We are actively working to ensure our customers can invest in the US markets with minimal costs and maximum convenience,” says Srivastav.

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For Indian investors seeking to diversify their portfolios and tap into the growth of global giants, the LRS route through these platforms provides a reliable and straightforward gateway to the US stock market.