Frequently Asked Questions about US Investing and Vested
If you’re interested in reading more about how to invest in US stocks, read more here!
Vested uses 256-bit encryption and Secure Sockets Layer (SSL) to ensure the security of our platform and protect your information. We also employ state-of-the-art login methods, automatic logouts, and ID verification to help prevent unauthorized access.
Vested Finance Inc. is an investment adviser in California registered with the Securities and Exchange Commission (SEC). Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. Furthermore, securities are offered through VF Securities, Inc. (Member FINRA/SIPC).
Your assets are held at a 3rd party custodian, and we do not ever touch or hold your money. 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. In the highly unlikely event that both Vested and DriveWealth shut down, your SIPC insurance kicks in. Each brokerage account opened with Vested is insured by SIPC (Securities Investor Protection Corporation) up to $500,000. This includes $250,000 in cash. For more details, please read here.
Share ownership verification works slightly differently in India than in the US. Shares are held by a third-party custodian in the ‘street name‘ of the broker rather than the underlying investor. This is why you do not receive direct emails from the custodian regarding your holdings. Account Statements and Trade Confirmations available within the Vested application are legally binding documents proving ownership of shares.
If you are a US resident, capital gains are taxed depending on the holding period. If the holding period is less than a year, then gains are taxed as ordinary income. If the holding period is over a year, gains are taxed at lower capital gain rates. Please consult your tax advisor for more detail.
If you are not a US resident, upon account opening, we fill out a W8-BEN form, which specifies to the IRS that you are not a US resident and, therefore, no tax withholding in the US is applicable.
That said, generally, for our international users, there are two types of taxation events:
(1) Taxes on investment gains: You will be taxed in your country of residence in accordance with local taxation rules for this gain. You will not be taxed in the US. The taxes you must pay in your country of residence depending on how long you hold the investment.
(2) Taxes on dividends: Unlike investment gains, dividends will be taxed in the US at a flat rate. The rate varies depending on your country of residence. For example, if you live in India, the dividend withholding rate in the US is 25%. Fortunately, the US and your country of residence oftentimes have tax treaties. This means that the withheld dividend tax can be taken as a credit to reduce your tax obligation in your country of residence. In our example, the US and India have a Double Taxation Avoidance Agreement (DTAA), which allows taxpayers residing in India to offset income tax already paid in the US. The 25% tax Indian residence already paid in the US is made available as Foreign Tax Credit and can be used to offset your income tax payable in India. Read more about how taxes will work here!
On the Vested platform you can invest in either full or fractional shares. When your investment is in full shares, our broker partner (DriveWealth) will route the orders to market centers on an Agency basis. When the investment is fractional shares, our broker partner will satisfy the order from its own account, on a Principal basis, at the National Best Bid or Offer (NBBO). NBBO means that DriveWealth cannot add a margin to the price. So, if the market price of 1 share of Amazon is $1,000, and you purchase 0.1 share of Amazon, you will pay $100 for the 0.1 share. Any orders for both full or fractional shares will be executed via both methods, part as Agent and part as Principal.
YES! Generally, Vested supports US investing in countries where US investing is permissible
The LRS is only applicable for residents of India and not applicable for investors living outside India.
Instituted by the RBI, the LRS is a set of policies that governs the maximum amount and purposes of remittance. Under the 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 invest in other countries. For more information, you can read more here.
For the most up-to-date regulations regarding the LRS please visit here. Please see Article 6(iii) for specific LRS regulations regarding investments in equity.
You will need proof of ID. The process is quick and easy to do via our application. Most accounts are approved in minutes.
Investments in US equities must be made in USD. If you live in the US, you can easily initiate a wire or ACH to fund your Vested Invest account.
If you are a resident of another country, you must wire USD to Vested’s partner bank in the US to fund your account. The details of beneficiaries can be found in the application after you complete your KYC. They are unique to you. As such, please do not share them with others
Please note that funds must originate from accounts bearing the same name as the investment account.
You can withdraw cash from your account at any time. You must initiate the withdrawal process from the ‘Withdrawal’ tab on the platform.
If the destination bank is outside the US, we will initiate a SWIFT wire directly to your bank account that you have specified. The wire may take 3 to 5 business days to come through.
Please note that the remitting bank will charge a fee for the transfer. Currently, international wire fee is approximately USD $5. Thus, you must have a minimum of this amount to withdraw.
If your current US investing platform uses Drivewealth, you can move your account very easily! You just need to fill up this one-page form and share it with us. If you have any questions, please drop us an email at firstname.lastname@example.org and we will be happy to help.
While we do not offer mutual funds, we do offer ETFs on our platform. ETFs are similar to mutual funds and provide diversification advantages by spreading investing across multiple stocks or asset classes. ETFs are highly liquid and offer transparent pricing as they are traded on exchanges like a stock. On Vested’s platform, we have curated a list of ETFs so that you can gain exposure to exciting themes such as the China growth story, global stock exposure and the rise of the internet. To read more about ETFs, click here.
Unfortunately, we do not currently support margins or derivative products.
Yes. In order to onboard you, we will require your PAN card (or passport), address proof (bank statement), and tax ID from the country in which you are currently a tax resident.
Currently there are two ways in which you can add funds:
- Transfer from your bank account in India
- Wire transfer funds from your non-Indian bank account
The beneficiary details are available under the Fund Transfer section on the platform.
You will be taxed as per the laws in the country in which you are a tax resident. For example, if you are a tax resident of the UAE, you will pay taxes as per UAE tax laws.
Our terms of service can be found here.