Opening up 'Direct funding to US stocks account'

Great news! Direct remittance from your native savings account to your US stocks wallet is now activated.

Post RBI asking SBM Bank to stop outward remittance (on Jan 23), we started building and testing new flows. During our testing, we found that adding funds directly from your native account to your US Stocks wallet is faster and more reliable with DriveWealth versus Alpaca. Therefore, we have now enabled you to activate your Free DriveWealth a/c so that you can deposit additional money directly from your native savings account. You will be able to manage both your Alpaca as well as DriveWealth a/c in a single switch view.

On Alpaca view, you can continue to trade, buy, sell, receive dividends or withdraw to your Indian savings account.

On the DriveWealth switch view, you can add money directly from your native savings a/c, trade, buy, sell, receive dividends or withdraw to your Indian savings account.

Within the next 7 days, you will be able to add additional funds to the Alpaca US wallet too via the direct route once we are 100% sure about the speed of remittance. In the meantime please go ahead and use the power of easily managing both your wallets and accounts in a single app. You are in full control of these wallets. You will appreciate that given the change in the rule of outward remittance which is beyond our control, we wanted to test everything before making it live for our customers.

How does it work?
When you click on Add money on the INDmoney app US stocks section, choose your linked bank account. After that, you get instructions for using your own bank a/c app to transfer this money to your US stocks a/c. Your money would be remitted to your US stocks wallet within the stipulated timeline mentioned by your bank.

What are the charges?
INDmoney does not charge you anything. Your bank will show you the relevant charges and costs for remittances.

Why has INDmoney introduced this?
Previously you would send foreign remittances under LRS (liberalized remittance scheme) via SBM Bank. However, RBI has asked SBM Bank to stop new LRS remittances for now.  Hence the introduction of the “Direct route”. The advantage of this is that you no more need to open a fresh savings account. The disadvantage is that you need to hop to your bank’s app from the INDmoney app to do the remittance.

Why is remitting money to a US stocks wallet, not the same as transferring to your Indian stock Broking account?
Remitting money and converting it to USD (or any other currency) is a highly regulated process that comes under RBI rules and FEMA which has stringent compliances. You can remit a maximum of USD250,000 overseas in a financial year. Indian stock accounts on the other hand is a domestic transaction. Hence the two are not comparable.

What happens to my stocks and money in my US stocks account?
It is absolutely secure. There is no correlation between the bank and your US stock brokerage account. There is also no relationship between SBM bank and your US stocks trading account. INDmoney is a platform that provides you with instant access to US stocks. While accessing the US markets, you create an account with our US broker partner, i.e., DriveWealth or Alpaca. Thus, any transaction that takes place is through your DriveWealth or Alpaca account. Also, note that both DriveWealth and Alpaca are members of the SIPC (Securities Investor Protection Corporation). SIPC protects customers of SIPC-member broker-dealers if the firm fails financially. Coverage is up to $500,000 per customer for all accounts at the same institution, including a maximum of $250,000 for cash. You can buy, sell, withdraw and deposit at any time.

What happens to my Alpaca account?
Your Alpaca a/c is active and available on a single switch. You can continue to use it for trading/ buying/ selling and also receive dividends. You can also withdraw back to your Indian savings a/c.

Why are you asking me to create a DW account?
INDmoney has enabled US Stock trading through Stock brokers like Drivewealth & Alpaca which are registered with USA Securities Exchange Commission and are regulated US stocks broker. During our tests, we found that adding funds directly from your native account to your US Stocks wallet is faster and more reliable with DriveWealth versus Alpaca. Therefore, we have now enabled you to activate your Free DriveWealth a/c so that you can deposit additional money directly from your native savings a/c. You will be able to manage both your Alpaca as well as DriveWealth account in a single switch view. If you want to wait for additional 7 days then we would be enabling Alpaca too.

I am unable to see my US stocks, where are they?
Go to your US stocks page and click switch broker. You will be able to see the same.

Will INDmoney bring new regulated channels for foreign remittance?
Yes. We are building the same. Stay tuned.

What about other products on INDmoney?
The pausing of LRS transaction via SBM has no correlation with any of the other products (stocks, mutual funds, FD, etc) and also no impact on your US stocks account with either of the regulated US brokers i.e DriveWealth or Alpaca.