INDmoney seems convenient for small amounts of US investing, while many people recommend Interactive Brokers. Is IBKR only worth it for large transfers? How do the two compare on costs, available funds and tax issues?
1 Answers
Why I did not select INDMoney:
- Only US-listed stocks/ETFs are available, which may create issues in tax deduction on dividends and Estate tax in future. No Irish domiciled ETFs (UCITS) present.
- The forex conversion rate was high. There is no way where I can directly wire transfer to a US brokerage account to save on transfer costs.
- IBKR is fine even for a smaller amount if wire transfer costs are low. If there are no processing fees, it does not matter whether you send small or large, the percentage loss (markup and GST) would be the same. One difference can be in the minimum brokerage, which is 1.70 USD per order; so for a smaller order percentage wise it will be more, compared to a bigger order.
Estate Tax details: if the total US stock value crosses USD 60K, your nominees could get hit with up to 40% US estate tax, even if you and your nominees are non-residents.
Dividend tax details: Tax would be deducted on dividend payout, and you have to show them in your Indian income tax return to get a refund/adjustment under DTAA.
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