All of us at some point definitely have thought of investing in Tesla, Amazon, Google, Apple and many more of US tech giants, only to find out that the process was tedious with lots of rules and form fillings where most of the process happened offline. But no more! A startup Stockal, which is registered in New York, developed a platform that has simplified the process of overseas investment for all kinds of Indian investors, to a great extent.
How does Stockal do it?
Earlier the process was quite cumbersome where the Investor had to use the Liberalized Remittance Scheme (LRS) which allowed a transfer of funds from India up to $250000 a year. Mostly this amount would be used for travel and college fees. Although this could be used for investment purposes, very few did so. This is because the process required a form and declaration letter which most banks did not have it online. Stockal, with help from banks is taking this process online. Currently, it uses a courier to collect documents from a prospective investor, submit the forms at the required branch, and enable the remittance to the US brokerage account. After the deposit, the money can then be used to trade in US stocks.
How much you can invest?
As per Liberalised Remittance Scheme (LRS) of Reserve Bank of India, the current limit for investment outside India by Indian citizen in a year is capped at $250000.
What are the available subscription plans?
There are three subscription plans for investors.
The basic plan offers $2.99 per trade when the quantity of shares is below 299. Beyond 299 shares then $0.01 per share would be added to $2.99.
The silver plan costs ₹ 3999 per year. It offers $0.99 charge per trade up to 99 shares. Beyond 99 shares this plan also adds $0.01 per share to the base charger per trade, for every share. Investors choosing this plan have 24×7 support along with email support.
The Gold plan is the flagship plan for the investors. It costs ₹ 13999 per year. It offers flat 1 cent per share cost to the investors. Along with all the perks of the silver plan, investors also get a dedicated relationship manager from Stockal.
Why should you invest in US market?
Let’s look at the major advantages of investing in the US markets:
- Trade in US Dollar: History has shown us that the rupee is sliding against the US dollar. This impacts imports and exports if the country, which in turn impact Indian businesses. By investing in the country with the currency the world trades in, you are cutting the rupee depreciation risk.
- Access to global top stocks: You would have access to stocks of the future like Tesla, Amazon, Google, etc.
- Investment diversification: By investing in US markets, you can minimizing the India specific risk and can capitalize on US specific growth opportunities.
- Medical needs: Medical care abroad is expensive. Even on your vacation abroad, there could be a certain need for medical care. Having some out-of-pocket money at hand could come in handy during these times.
What would happen to your holdings if Stockal goes down?
Your global investing accounts are held by brokerage and clearing services providers. The custody of your account is managed by some of the largest banks and clearing firms in the world. If Stockal goes down, your account will still be safe and secure with them and you will be able to access it and/or move it to another brokerage firm as you please.
Additionally, you also have automatic insurance on your US investing account. The cover of insurance is $500,000, which includes a $250,000 limit for cash.
Along with US markets, Stockal also provides options for other markets as well. It also partnered with HDFC Securities one of the largest brokerage firms in of India.
To get started with abroad investing, you can create an account either with Stockal or HDFC Securities.