One debit card feature you can't live without? 💳

I personally like the first point you made! Rewards should be maximised for the user for sure.
This was a light bulb moment for me as a user, of the # of rewards I’ve missed on because of this :frowning:

For point 2, there is an avctive thread here:

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unlimited lounge access+universal acceptance. I have cases previously when international investing platform reject my cards

Universal acceptance @ minimal fx markup

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Debit card with a “safe and secure” one click payments…

Hey Rohit,

Seems like you have some experience with international investing. Share your tips on this thread?

Hey Sneh,

Thanks for A2A. As you rightly mentioned I have some decent experience with international investing. I will divide my answer into 2 parts. Also, I would suggest Vested to invest in the US markets from India (you will understand why I am saying this by the end of the answer, do read it till the end) as they are around for more than a year now, while winvesta is relatively a new platform.

  1. What are the ways to invest in International markets
  2. What are the benefits of international investing

There are primarily 3 ways in which one can invest in US markets from India

a. Mutual Funds - There are AMCs that offer mutual funds which invest in the US markets. These mutual funds either directly invest in other mutual funds in the US markets (and hence are called feeder funds) or invest 35% of their portfolio in international markets.
These mutual funds are a convenient option because you can use your existing broker/MF platform
They are also a good option for looking to invest small amounts since there are no currency conversion fees involved

There are some downsides though:

  • High expense ratio - Essentially you are paying fee twice, both for the underlying fund and the India fund. The total expense ratio ends up being about 2%

  • Exit Load - Mostly these funds have exit load for 1 year where investors are charged up to 1% if they withdraw their funds within 1 year of investing

b. Index ETFs - These are ETFs that track underlying US indexes such as the Nasdaq 100 or the S&P 500. Again these are a convenient option to get started. Since they are not actively managed by a fund manager, they have a lower expense ratio compared to mutual funds

The downsides are:
Expense ratio - These ETFs are actually charging 10 - 20 times the fees of the exact same ETF in the US. For example the Vanguard S&P 500 ETF has an expense ratio of 0.04% whereas the Motilal Oswal S&P 500 ETF charges between 0.5% to 1% depending on whether you pick the direct or regular fund
Tracking error - These ETFs don’t invest the entire 100% AUM into the underlying securities and keep some portion in cash and cash equivalents in support sudden redemption’s. As cash earns risk free returns, higher the cash portion, lower the returns and higher the tracking error. Also tracking error is generated due to expense ratio charged by the fund and fx fluctuations.

c. Direct US investing- Direct US investing allows you to invest in stocks and ETFs via your own brokerage account.
This option requires more effort than the prior two options but it also gives you the flexibility to invest in the variety of stocks and ETFs available in the US markets. You will need to convert INR to USD to invest directly. There is a one-time cost associated with this process. This cost depends on the bank you use. Note that this is a one time cost versus expense ratios which are ongoing costs

  • Taxation - Direct US investing the LTCG threshold is 2 years whereas the other options have the LTCG threshold as 3 years post-investment. Hence, if your investment horizon is 2–3 years, it makes sense to go for direct US investing

  • $$ based expenses - If you have a $ based goal/expense like foreign education or vacation. it is prudent to start saving in $$ terms and build a $$ based corpus for it. Also, it is advisable to use a platform which facilitates withdrawal across international bank accounts as well.
    Below is a broader comparison of the different ways to invest in the US

In terms of RBI Regulations- Indian residents are authorized by the RBI to invest up to $250,000 every year towards foreign portfolio investments. This is captured under the RBI’s Liberalised Remittance Scheme (LRS). You can also check the RBI circular for detailed guidelines.

  1. What are the benefits of international investing
  • Superior returns compared to India

The US market consistently outperforms the Indian market over the last 10 years. During this time period, the DOW returned 196%, while the SENSEX returned 150%.

In addition to equity returns, the savvy investor should also think about the effect of currency fluctuations between INR and USD. In the past 10 years, the Rupee has depreciated 44% compared to the USD. This has a significant negative impact on the returns of Indian stocks widening the performance gap.

  • Exposure to other markets

Investing in the US can be an easy way to invest in other international markets. For example, you can easily invest in the Chinese economy by investing in the US market. The fast-growing Chinese economy - driven by a growing middle class and rapid technology adoption - has led to the creation of some of the world’s leading technology companies. However, instead of going public in China, more and more of these Chinese technology companies are choosing to list in the US.

For Indian investors, another benefit of investing through the US stock market is that the ecosystem is very well regulated, with strict controls on financial reporting, transparency, and standardized governance practices, making it easier for the investors to evaluate the different opportunities.

*** You can Invest in MNCs directly rather than the local Indian subsidiary**

Many investors living in India invest in international MNCs because they assume there is a higher level of governance, technological proficiency, and transparency in MNCs. However, investing in Indian subsidiaries is often a more expensive proposition. We studied 16 MNCs that are traded in reputable US exchanges and that have Indian subsidiaries that are also publicly traded in India.

On average, investors from India are paying ~3X higher multiples (P/E trailing twelve months) when investing in the Indian subsidiaries vs. investing directly in the parent company in the US. And despite paying significantly higher multiples, the average returns can be similar. The average 2019 returns of the US parent companies was ~14%, while the average returns of the Indian subsidiaries were ~17%.

How will I be taxed for these investments?

When you invest in the US stock market, there are two types of taxation events:

  1. Taxes on investment gains: You will be taxed in India for this gain. Taxes will not be withheld in the US. The amount of taxes you have to pay in India depends on how long you hold the investment. The threshold for long-term capital gain is 24 months, with the rate of 20% with indexation benefit. If you sell a stock in less than 24 months, capital gains are considered short-term and are taxed according to your income tax slab.
  2. Taxes on dividends: Unlike investment gains, dividends will be taxed in the US at a flat rate of 25%. Fortunately, the US and India have a Double Taxation Avoidance Agreement (DTAA), which allows taxpayers to offset income tax already paid in the US. The 25% tax you already paid in the US is made available as Foreign Tax Credit and can be used to offset your income tax payable in India.

How do I fund my account?
Since investments in US equities must be made in USD, you must wire (remit) USD to your brokerage in the US before you can start investing.

What are the brokerage charges?

Different entities charge different rates and have different structures. For example, brokers might charge a fixed fee per trade or charge a percentage of total trade or total assets. Since the investing process requires international transfers from Rupee to USD, in addition to any potential brokerage fees, there might be other fees that investors incur in order to invest in the US. These fees could be international wire fees or FX conversion fees that the investor’s bank charges, which may vary depending on the bank that the investor uses.

Hence, it’s prudent to choose a broker that charges zero commission or minimal commission. No subscription fees or whatsoever with unlimited trades. Vested I guess fulfills the criteria. Winvesta has some limitations with the number of trades one can undertake in a month under their free model. Also, they have a limited number of securities which they offer on their platform (they don’t have a website as of now, only android and iOS app).

Hope this helps:) Do DM me if you have any specific questions

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https://www.indusind.com/in/en/personal/cards/credit-card/duo-card.html

check this out. Looks ugly though, comes with 2 chips

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Thanks Rohit! this is pretty detailed. :money_mouth_face: I think if one is starting their journey towards investing in Foreign securities, ETFs are a good start and then ofcourse as you suggested direct equities seem more sensible. Does that summarise well?

Wow Rohit… that’s amazing explanation.

Can we buy fractional shares in these platforms?

There’s an app called INDmoney which also allows investing in US. Any thoughts on that if you have tried?

Although ETF is good way to start with. However, ETFs in general in India have liquidity issues.

Hence, I would suggest you start with index funds and then direct equities

Yeah have used INDmoney also. Both Vested and INDwealth have tied up with the same broker. Also, IND offers a bunch of other products also. So I dont know how much priority they would give to this feature in the future.

Hence, my personal bias is towards a platform servicing a niche product.

Also both platform supports fractional investing

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Without sharing of PIN, when card was used by Friends, Family…
Notification enabled payment on Banking app like as UPI for payments.
Blocking certain amount of money for the Single Transaction with in the timespan, no need of PIN.
Biometric authentication instead of the PIN.

Generation of OTP / TOTP with in the Mobile Banking application.
It will be helpful when, making payments on mobile (dual sim) Using mobile data on 1st sim and OTP received on 2nd sim. Latency Problem occurs while entering the OTP. It will become hard when the internet speed is low.

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Hi Harsha, welcome to the community!
We’ve been thinking about how to solve for 2FA in a better way, find that on our product roadmap below - suggested by @Raghu_Varma is one possible way.

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I use debit card for only following reasons -

  1. Taking out cash - did not do it after lockdown.
  2. Using its grid for netbanking transactions for transfering money to different bank accout,

I do not feel the need to use debit card where credit card and UPI are acceptable. And cc provides me free credit and rewards/cashback which is a missing piece in debit card.

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Debit card should come with both the features like debit and credit card as well when there are no funds in bank account.
Also, in debit card there should be barcode to receive money as well and it should be of metal and unique too.

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Mainly i use my debit cards for get the reward points and to meet the specific spending criteria by bank to get the extra benefits from the card.

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These are some things which would make Jupiter’s card awesome as well as these are features which most people prefer-
1)Direct cashback rewards preferably on most or every transaction
2) International usage
3)0% markup fee
4) card services like lock, unlock etc from app
5)A stylish card (Metal,wood,etc)
6)Great offers from merchants especially Amazon and Flipkart all round the year
7)NFC payment as that’s the future
8) Unlimited withdrawals from ATMs without charges
9)One card for everything (credit,debit,etc)
10) High security like the card comes in RFID wallet
11) Universal acceptance and complimentary lounge service everywhere/most places.

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Avoiding paper receipts when swiping physically. Both the merchant and the payer get a digital confirmation anyway.

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I want a debit cum credit card. So, I can use it as a debit card at ATMs and as a credit card online.

The card working when you want it to work.

When ever you open an account, each card has a transaction limit. When I bought my laptop, I realised that I can’t make single transactions more than 50k. After all the money is in my bank account and it is not a credit line.

Hence, taking money when you want, where you want, and how you want without the fear of it not working.

Now, RBI has said that international transactions should be blocked by default. A simpler solution for all of this helps

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