Discover the top 9 Powerful Reasons Zerodha Invest in US Stocks is Smart move for Indian investors. Learn how to diversify, grow wealth, and hedge currency risks with ease.
1. Global Diversification – Risk Mitigation
Portfolio diversification has now become necessary for Indian investors. When you invest only in India, all your money is dependent on a single economy. If the Indian market falls, your investments also fall.
With Zerodha’s US stock investment feature, you can invest in global companies. The US market works on a different regulatory framework, consumer behavior, and economic cycle, which balances your portfolio.
Example: When Indian markets crashed during COVID, US tech stocks rallied. Global diversification is beneficial in such scenarios.
2. Access to Tech Giants and Innovation Leaders
Imagine you can become a shareholder of Apple, Google, Amazon, or Tesla!
These companies have no listed counterparts in India. US stocks give you direct access to global innovation leaders like Nvidia, Meta, and Microsoft. These companies are leading in AI, cloud computing, EVs, and fintech.
Zerodha’s fractional investing feature gives you the opportunity to invest in them with just ₹5000. Earlier, it was impossible to enter a $3000 share, now it has become very easy.
3. Currency Advantage and Long-Term Growth
The exchange rate between USD and INR increases every year. If you invest in US stocks, you are indirectly investing in USD assets.
For example:
10 years ago 1 USD = ₹60
Today 1 USD = ₹83+
This means if your US investment grows 10% in USD, and USD-INR is also strong, then your return is even higher in INR terms.
This currency hedge protects your wealth from inflation and boosts returns.
4. Strong Regulatory Framework and Stability
The US Securities and Exchange Commission (SEC) is a globally respected regulator. Its laws are focused on investor protection and corporate transparency.
Zerodha has partnered with Interactive Brokers—a world-class brokerage firm. Your money is kept in segregated client accounts, and SIPC insurance is also provided up to $500,000.
This stability and compliance provides a secure environment for Indian investors.
5. Ease of Access and Cost-Efficiency
Zerodha has made access to US stocks seamless through the Kite app. You can easily:
- Open an account
- Transfer funds from INR (via LRS)
- Buy/sell US stocks in a few clicks
- Trading costs are also affordable:
- No commission on many trades
- Flat $4 per trade model
- W‑8BEN form auto-fill
- Minimal annual charges
All these small costs translate into huge savings in the long term!
6. Long-Term Wealth Creation Opportunities
The US stock market has historically given double-digit annual returns. The 10-year CAGR of the S&P 500 is ~11%.
Compare with:
- S&P 500 (2013–2023): +240%
- NIFTY 50 (2013–2023): +165%
This compounded difference can have a major impact in long-term wealth creation. Stocks like Apple or Amazon have given 800%+ returns in 10 years.
Zerodha’s US access unlocks wealth-building opportunities.
7. Passive Income through Dividends
US blue-chip companies like Coca-Cola, Johnson & Johnson, Procter & Gamble pay regular dividends. This creates income monthly or quarterly, especially for retirees or conservative investors.
Important thing:
- 25% tax is deducted on US dividends
- But you can get tax credit for it in India via DTAA (Double Taxation Avoidance Agreement)
- Zerodha statements and reports make this process smooth.
8. Strategic Sectoral Exposure
Some sectors are under-represented in India, such as:
- Biotech
- Defense
- Green Energy
- Space Tech
In the US market, you get the opportunity to invest in all of these, whether it is direct stocks or Sector ETFs (e.g., ARK Innovation ETF, iShares Clean Energy ETF).
On the Zerodha app, you can explore sector-wise ETFs for thematic investing.
9. Improved Risk-Adjusted Returns
According to Modern Portfolio Theory, if you mix low-correlation assets, the Sharpe Ratio of the portfolio improves.
Aka: better returns come with lower risk.
The returns of US and Indian equities are usually uncorrelated. So combining the two makes sense.
Zerodha’s US investing feature gives you the option to easily follow this balanced, risk-adjusted strategy.
How to Start Investing via Zerodha – Quick Steps
- Login to Kite: Visit kite.zerodha.com or use the app.
- Enable US Stocks: Click on ‘Enable US Stocks’ in the account section.
- Complete KYC: Upload PAN, passport, and address proof.
- Submit W-8BEN Form: Auto-filled tax form for US compliance.
- Fund Your Account: Use net banking or platforms like Wise to transfer USD via RBI’s LRS.
- Buy US Stocks: Search stock/ETF, choose amount or fraction, place the order.
- Track & Report: Monitor portfolio on Kite and download tax-ready reports.
Quick Tips to Maximize ROI via Zerodha US Stocks
- ✅ Do Monthly SIP – Invest fixed USD every month to average out cost.
- ✅ Choose ETFs – Sector ETFs (VOO, QQQ) are safer for beginners.
- ✅ Reinvest Dividends – Let the extra income grow, do not withdraw.
- ✅ Monitor FX rates – Transfer funds when USD is weak.
- ✅ Follow Tax rules – Declare foreign assets in ITR, reports are available from Zerodha.
Frequently Asked Questions (FAQs)
a. Minimum investment required?
Zerodha allows fractional share purchases; you can start as low as ₹5,000 (~$60), depending on exchange FX.
b. How to withdraw funds back to INR?
You sell US equities, transfer USD to your NRE/FCNR account, convert to INR via RBI‑regulated channels, and repatriate with proper paperwork.
c. What about dividends and withholding tax?
US dividends have 25% tax deducted at source (per India‑US tax treaty). You can claim credit when filing ITR in India.
d. Is it suitable for risk‑averse investors?
Yes, if you prefer stable large‑cap ETFs and SIP investment over time.
e. How to manage exchange fluctuations?
Spread investments monthly and use average FX rate over time to reduce timing risk.
f. What support does Zerodha provide?
Zerodha Wiki, blog posts, video tutorials, and customer support guides walk you through account setup, investments, and tax reporting.
Conclusion : Zerodha Invest in US Stocks
Dear friends, 9 Powerful Reasons Zerodha Invest in US Stocks is Smart in 2025 is a smart, forward-thinking decision:
- Diversification
- Access to innovators
- usd currency advantage
- Regulated market exposure
- Easy, low-cost access
- Long-term wealth compounding
- passive dividend income
- Strategic sector exposure
- Better risk-adjusted returns
With Zerodha US Stock investing feature, global investing is no longer just a game for HNIs. You can also start easily with ₹5000 and a few clicks.