Indian stock market investors today are increasingly looking beyond the domestic markets for investment opportunities, in order to diversify their portfolios and participate in the growth of giants like Apple, Tesla, Nvidia, Microsoft, Alphabet and others. Investors now have multiple routes to get exposure to the US stocks and other global markets.
Broadly, the three popular options to invest in the US stock market are: opening an international account with a traditional broker, using a fintech platform that aggregates US investing, or buying Indian ETFs and mutual funds that track US indices. Here’s a comparison on which route is the most cost-effective for investors.
1. Direct brokers
The first way to invest in US stocks is by opening a global trading account with a domestic brokerage firm that has tie-ups with US brokerage firms, or by onboarding directly with an overseas broker. They allow you to pick individual stocks, US-listed ETFs, and even thematic baskets.
However, this route often involves account opening and maintenance charges in some cases, higher brokerage per trade compared to domestic equities, foreign exchange conversion costs and bank remittance fees every time you transfer money abroad under the Liberalised Remittance Scheme (LRS) and possible minimum balance or activity requirements.
For investors making small or infrequent transactions, these fixed and FX-related costs can make direct brokerage comparatively expensive on a per-transaction basis.
2. Fintech brokers
Fintech platforms that specialise in investing in US stock market through tie-ups with global brokers aim to simplify the process. They offer app-based onboarding with digital KYC, enable fractional investing, and can also provide packaged portfolios or themes for easy diversification.
According to Viram Shah, Founder & CEO, Vested Finance, direct brokers “offer full access but can be costly and a bit complex”, while “fintech platforms like Vested try to strike the middle ground by offering easy, low-cost access with the flexibility to build a diversified US portfolio, all while staying compliant.”
Fintech platforms may charge a platform or subscription fee, or a markup on FX, or embedded costs in premium features or advisory models.
3. Indian ETFs and Mutual Funds
Another route to trade in US stocks is the indirect exposure through Indian mutual funds or ETFs that invest in US markets or track global indices like the S&P 500 or NASDAQ 100. These can be bought in rupees through a regular demat or mutual fund platform, with no need to remit funds abroad.
Key costs here are Total Expense Ratio (TER) of the fund or ETF, brokerage on ETF trades (for exchange-traded units) and tracking error, which can affect how closely the fund follows the underlying index.
Purely on visible costs, low-cost index funds and ETFs can be competitive, especially for long-term, passive exposure. However, some international funds have relatively high TERs, and investors don’t get to pick individual stocks – only broad baskets.
So, which is the “cheapest”?
There is no one-size-fits-all winner, but broadly, for a frequent trader who wants full control, a well-chosen direct broker can be cost-efficient despite higher fixed costs. For retail investors starting small, who want diversification with lower friction, a fintech platform that offers low brokerage, fractional investing and transparent fees often becomes the most cost-effective balance of price and convenient option to trade in US stocks.
For investors who want simplicity in rupees, Indian ETFs or mutual funds offer ease and simplicity, even if ongoing costs can be slightly higher.
Regardless of the route, investors must factor in tax deducted at source (TCS) under LRS where applicable, capital gains tax, dividend tax, FX charges, and brokerage. The “cheapest” option in the long run depends not just on headline fees, but on your ticket size, frequency of trades, and whether you prefer passive index exposure or active stock picking.
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