each year lakhs of indian students pack their bags to venture overseas for their education while 2020 was an outlier year due to covid19 the ministry of foreign affairs estimated that over seven lakh students studied abroad in 2019 these numbers have quickly bounced back in 2021 even more telling is the reserve bank of india data on the liberalized remittance scheme lrs which shows that indians remitted an aggregate of roughly 10 billion for foreign education in the last three years historically indians have saved for education through investments in fixed deposits gold life insurance via indian governmentowned lics and real estate these instruments can be lumpy illiquid and provide less substantive returns for a goal such as higher education abroad unlike education which is a defined event the sale of a property is not to add investments in a currency rupee that has depreciated against the dollar can make savings more difficult to comprehend why currency depreciation is such an essential factor to consider let’s look at a simple example in the chart below tuition and living expenses were kept constant over 17 years however during the same time frame the rupee lost its dollar purchasing power which caused a steep increase in the cost of tuition important to note is that most tuition fees do not stay constant countries such as the us have been increasing 44 year on year in the last 20 years this means that indians investing in rupee assets as a method to save for education abroad have a massive disadvantage instead indians can consider investing in international stocks which may provide diversification in one’s larger portfolio and allow a parent or student to offset the worries around currency deprecation here we’ll take the example of investment in the us equity market where to invest in the us market there are two types of us equity investments that you should be aware of   the first is stocks which are publiclylisted companies trading on stock market exchanges such as nasdaq and nyse one of the most popular and bestperforming sets of stocks is faang which represents facebook apple amazon netflix and google like any equity investment you can purchase shares of these companies individually or via mutual funds   the second type of equity investment is in an exchange traded fund etf while etfs are also traded on exchanges they are not single stocks but several stocks put together these baskets of stocks can track indices such as the sp 500 or one sector such as the tech or automotive industry for example the etf spdr sp 500 tracks the sp 500 stock market index and is one of the largest in the world factors that may impact your investments in the us market like any investment parents and students should be aware of certain factors that impact selecting their equity investments risk time horizon and historical performance are important factors to consider while constructing a portfolio with a goal as delicate as education parents should also weighin their child’s age this is important because the amount of risk a parent can take on will change as their child grows and gets closer to starting university for example a parent with a twoyearold can consider investments in a smallcap etf such as the invesco sp smallcap value with momentum etf though they are relatively risky their track record indicates a cumulative performance of over 100 over the past five years in dollar terms conversely a parent with a 22yearold looking to do their masters in canada within two years may not take on as much risk instead they can consider a megacap etf with less volatility and standard deviation it is best to consult a financial adviser to find out what works for you the most how to invest in us markets the next question naturally becomes “how do i start” luckily indians can open a us brokerage account right from the comfort of their own homes with the fastpaced technology adoption many private banks and fintech players have partnered with us brokerdealers to provide investments in thousands of international equities online these mobile and web applications require you to complete a thorough knowyourcustomer kyc process once that is complete you can proceed with opening a us brokerage account and fund your account to fund your us account it is necessary to use your local bank in india to remit these funds banks such as icici bank hdfc bank idfc bank and axis bank support digital transfers which mean the entire process can be handled online once the account is funded you can officially start purchasing shares of individual stocks if you are unable to afford an individual stock there is always the option to purchase a fraction of it which is known as a fractional share unfortunately there is no autodebit facility today and therefore if you want to make trades each month you will be required to go into one of these apps to buy or sell the shares each time under lrs indians are allowed to remit up to 250000 a year for any foreign capital or current account transaction this includes investments in international stock markets because market investments are a form of income generation indians are responsible for paying taxes even if those investments are abroad there are two types of taxes to be aware of   dividends the tax on dividends for indian investors making investments in the us is 25 these taxes will be deducted at the source for example if you receive 100 as dividends your receipt after deduction will be 75 you don’t need to worry about whether you’ll have to pay further taxes in india india and the us have signed a double tax avoidance agreement dtaa this prevents indians from double taxation unless your tax slab exceeds 25   capital gains tax you will be asked to complete a w8ben form at the time of account opening this form acknowledges that you are a foreign investor earning an income in the us it also allows you capital gains tax exemptions in the us instead you will be responsible for paying either short or longterm capital gains tax in india based on your investment horizon for further clarity one can also consult a local chartered accountant while the universe of us investments may seem daunting at first proper research can help you make an informed decision on the partner you want to work with the number of banks and fintech firms offering international equity investments is growing in india therefore it is even more critical to evaluate the platform that is best fit for you if you’re confident that your child will be studying abroad it is especially crucial to diversify into the international equities space this has the potential to magnify your returns for a goal that let’s face it can be very expensive and with technology leading the way you can now think local and invest globally