How Vested works: opening an account, buying US stocks, and managing tax as an Indian resident

Why Vested is where most Indian investors start

Vested launched in 2019, at a time when buying a share of Apple or Amazon from India meant navigating arcane LRS paperwork, wire transfer fees, and a foreign brokerage interface designed for US retail investors. Vested's bet was that Indian investors deserved something purpose-built: a platform that handled the remittance flow, explained LRS in plain language, showed P&L in both USD and INR, and was built around the India-US investing compliance reality.

That bet paid off. Vested has become the default starting point for Indian residents who want US equity exposure. This article is not a marketing piece — it is a factual walkthrough of how the product actually works, where the fees land, and what the tax picture looks like for a typical investor.

What Vested is — the entity structure

Vested Finance operates as a US-registered entity — specifically, VF Securities, Inc., a FINRA-member broker-dealer and SEC-registered investment adviser. It is not SEBI-registered. Your US securities are held at DriveWealth LLC — a US broker-dealer registered with FINRA and covered by SIPC (Securities Investor Protection Corporation).

This two-layer structure is standard for Indian-facing US investing platforms. Vested handles your KYC, onboarding, order routing, and India-side compliance. DriveWealth is the custodian — the entity that legally holds your Apple, Amazon, or Nvidia shares.

DriveWealth and SIPC protection: SIPC covers up to $500,000 per account (including up to $250,000 in cash) if a member broker-dealer fails. This protects you against broker failure, not against market losses. Your Vested account benefits from this coverage because DriveWealth is the custodian.

Opening an account

Account opening is fully digital and typically completes in 24–48 hours.

Documents you will need:

• PAN card
• Aadhaar-linked mobile number (for OTP verification)
• Bank statement (last 3–6 months) or cancelled cheque
• A selfie or short video for identity verification (required by SEBI guidelines)

The process: download the Vested app or visit the website, enter your PAN, complete Aadhaar-linked OTP verification, upload your bank proof, do the video/photo KYC, and submit. Vested's team reviews the application. Most accounts are approved within 24 hours; complex cases (foreign nationals resident in India, NRIs, HUF structures) may take longer.

Once approved, you will receive confirmation with your DriveWealth account details.

Funding your account — the LRS remittance flow

This is the step that confuses most first-time investors, so it is worth explaining carefully.

When you add money to your Vested account, you are making a foreign remittance under the Liberalised Remittance Scheme (LRS) — a Reserve Bank of India framework that allows Indian residents to remit up to $250,000 per financial year for permitted capital account and current account transactions, including overseas investment.

How the transfer works:

1. In the Vested app, initiate a "Add Funds" request. You will receive Vested's remittance bank account details and a unique reference number.
2. Log in to your bank's net banking or app, navigate to the foreign remittance / LRS section, and initiate a SWIFT transfer to those details.
3. Your bank processes the LRS declaration. You (or your RM) may need to sign Form A2.
4. The transfer arrives in 2–5 business days.
5. Vested credits your USD wallet.

TCS — the amount your bank withholds:

As of FY 2025-26, TCS (Tax Collected at Source) applies to LRS remittances for overseas investment at the following rates:

• 0% on the first ₹7 lakh invested per financial year (across all LRS purposes combined)
• 20% on the amount above ₹7 lakh

So if you remit ₹15L, your bank collects 20% TCS on ₹8L (₹15L minus ₹7L threshold) = ₹1.6L.

Is TCS lost? No. TCS is credited against your total income tax liability when you file your ITR. If your tax liability exceeds ₹1.6L, it reduces what you owe. If not, you get a refund. But the money is locked until your ITR is processed — typically several months. This is a real cost of capital that investors at the ₹15–25L/year level should account for.

The FX rate — what Vested charges on conversion

Your Indian rupees are converted to US dollars before reaching your DriveWealth account. Vested applies a ~75–100 paise markup above the interbank exchange rate.

To put that in concrete terms: on ₹10 lakh, you lose roughly ₹7,500–10,000 to the FX spread. On ₹50 lakh, ₹37,500–50,000.

Is this competitive? It sits in the middle of the market. IBKR charges roughly 0.002% (a fraction of this) for investors who wire USD directly and convert within their platform. Tickertape charges 0.15% brokerage. For most investors sending ₹5–20L per year, Vested's FX markup is acceptable — not the cheapest available, but not egregious. For larger amounts, the FX cost starts to matter and comparing Vested vs IBKR becomes worthwhile.

Buying your first US stock

Once your USD wallet is funded, buying a stock is straightforward.

The flow:

1. Search for a stock by name or ticker (e.g., "Apple" or "AAPL")
2. Open the stock detail page — price history, fundamentals, news
3. Tap "Buy" to open the order panel
4. Choose whole shares or fractional shares
5. Enter the amount (in USD or INR) or the number of shares
6. Select market order or limit order
7. Review and confirm

Fractional shares: Vested supports fractional investing with a $1 minimum. At an exchange rate of ₹85/$, you can invest as little as ₹85 in a single stock — even if that stock costs $500 per full share. This makes diversification accessible for investors with smaller starting amounts.

Market vs limit orders: Market orders execute at the current market price during US market hours (9:30 AM–4:00 PM ET, roughly 7:00 PM–1:30 AM IST). Limit orders let you specify a maximum price; they execute only if the stock reaches that level. Vested supports both.

The $1 minimum in practice: You can buy ₹85 of Amazon, ₹85 of MSFT, and ₹85 of Nvidia — a portfolio of fractional US stocks at ₹255 total. This is genuinely useful for beginners who want to explore US stocks without committing large capital.

The LRS calculator

One of Vested's most practical features is the built-in LRS calculator. It shows:

• How much of your $250,000 annual LRS limit you have used across your Vested investments
• A projection of TCS liability based on your planned investment amount
• Guidance on whether you need to pace your remittances across financial years

This is useful for investors who also use LRS for other purposes — education fees, travel, other overseas investments. Your $250k limit is shared across all LRS uses; the calculator helps you plan.

Viewing your portfolio — USD vs INR P&L

Vested shows your portfolio in both USD and INR. This distinction matters more than most investors initially realise.

Example: You buy $1,000 worth of SPY when USD/INR = 83. Your cost basis in INR is ₹83,000. SPY rises 10% to $1,100. But INR has strengthened to 80. Your USD gain is $100 (10%), but your INR gain is ₹(1,100 × 80) – ₹83,000 = ₹88,000 – ₹83,000 = ₹5,000 (~6%). The currency move eroded some of your stock return.

The reverse also happens — INR depreciation can amplify your USD returns when measured in INR. Understanding this split is important for accurate assessment of your investment performance.

Selling and repatriation

Selling: Place a sell order in the app (market or limit). Proceeds appear in your USD wallet once settled (T+1 for US equities).

Repatriation to India: Initiate a withdrawal in the Vested app. Vested converts your USD to INR at the prevailing rate (with the same ~75–100 paise FX markup applied on the outbound conversion) and sends the INR to your Indian bank account via a domestic transfer. This typically takes 3–5 business days.

You cannot keep the money in your USD wallet indefinitely without repatriating — Vested requires periodic repatriation in line with FEMA guidelines for overseas investment.

US dividend tax — what happens at source

If you hold US stocks that pay dividends, 25% is withheld at source by the US IRS under the India-US Double Taxation Avoidance Agreement (DTAA). The standard US withholding rate for non-residents is 30%, but the India-US DTAA sets the portfolio investor dividend rate at 25% (not lower, unlike some other countries' treaties).

This 25% withholding appears on your account statement and your Form 1042-S from DriveWealth. In India, you declare the dividend as income from foreign sources, but you can claim a credit for the US tax withheld under DTAA Article 25 (foreign tax credit). In practice, for most Indian investors in the 30% tax bracket, the credit offsets much of the Indian tax liability on dividend income.

Schedule FA — foreign asset disclosure in your ITR

Schedule FA is Part FA of the ITR-2 or ITR-3 form, where Indian residents disclose foreign financial assets. Because your Vested account's securities sit at DriveWealth (a US broker-dealer), they constitute a foreign financial account that must be disclosed.

What you disclose:

• Account number (your DriveWealth account number)
• Broker name and address (DriveWealth LLC)
• Opening balance on 1 April (start of Indian financial year)
• Closing balance on 31 March
• Peak balance during the year
• Income earned (dividends, capital gains)

Vested's Schedule FA helper: Vested provides a built-in tool that pulls this data from your account and pre-fills the Schedule FA fields. This is a genuine differentiator — most platforms dump a raw account statement and leave you to translate it. Vested's helper reduces the friction considerably. You still need a CA to review and file, but the raw data extraction is done for you.

The LRS, TCS, and Schedule FA compliance trifecta article covers the full compliance picture in depth.

Capital gains tax — the INR cost basis rule

When you sell US stocks, your capital gains are calculated in INR, not USD. This is a critical and often misunderstood rule.

Holding period:

• Short-term capital gain (STCG): held ≤24 months → taxed at your income slab rate
• Long-term capital gain (LTCG): held >24 months → taxed at 12.5% (no indexation benefit)

The INR cost basis rule: Your purchase price in INR is fixed at the exchange rate on the date you bought. Your sale price in INR is fixed at the exchange rate on the date you sold. If the stock went up 15% in USD but INR depreciated 5% during that period, your INR gain is approximately 20% (you need more rupees to buy the same USD). Conversely, if INR appreciated, your INR gain is smaller than your USD gain.

This means even a US stock that is flat in dollar terms can generate a taxable INR capital gain simply due to currency moves — something Indian investors need to track carefully.

What Vested does not do

Vested is a clean, focused product. That focus means some things are deliberately out of scope:

• ACATS inbound transfers: You cannot move existing US stock holdings from another US broker into Vested. If you have RSUs in an E*Trade or Schwab account, they stay there. Rovia handles RSU consolidation.
• Options and futures: No derivatives trading on Vested.
• OTC stocks: Vested covers NYSE and NASDAQ listed stocks and ETFs. No pink-sheet or OTC markets.
• Lot-level ITR format: If you need transaction-level capital gains data in ITR-ready format with lot-by-lot FIFO breakdown, INDmoney's tax reporting is more granular.
• Loss harvesting reports: Vested does not generate a tax-loss harvesting schedule. Rovia offers this.

Who Vested is for

Vested is the right starting point for:

• First-time US stock investors who want a product built for Indian residents with India-hours support
• Investors who do not have RSU complexity (no need to consolidate from multiple accounts)
• Anyone who wants Schedule FA help as part of the product rather than as an afterthought
• Investors in the ₹2L–₹20L/year range where the FX markup is an acceptable cost of convenience

Who should look elsewhere

• RSU holders who need to consolidate and manage US equity grants → Rovia
• Large lump-sum investors (₹25L+/year) who want best-in-class FX → IBKR via Paasa
• Research-first investors who want screeners integrated with execution → Tickertape
• GIFT City / no-TCS route → Dhan
• Indian + US portfolio in one app → INDmoney

The verdict

Vested earns its position as the starting point for most Indian investors: the onboarding is smooth, the Schedule FA tooling is genuinely helpful, the fractional share minimum makes US investing accessible, and the product has a seven-year track record. The FX markup and brokerage are mid-market, not the cheapest available. For most investors below ₹20L/year in US stocks, the convenience justifies the cost. For larger portfolios, the fee comparison across platforms becomes an annual exercise worth doing.

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Vested.blog is the editorial publication of Rovia.