Your US Brokerage Account After Moving to India: Keep, Close, or Transfer?

Most US brokerages restrict or close accounts once you update your address to India. Here's how to keep your portfolio intact — and the tax cost of getting it wrong.

The Brokerage Lockout Problem

Within weeks of updating your address from a US zip code to an Indian one, most major US brokerages — Fidelity, Vanguard, Schwab, E*TRADE, Robinhood — will restrict your account. You may be told you cannot make new purchases, cannot rebalance, and in some cases must liquidate within 60–90 days. This is driven by SEC and FINRA rules around servicing non-US-resident accounts, not by any tax requirement.

Which Brokerages Are India-Friendly?

Three US brokerages currently service Indian residents on their existing accounts: Charles Schwab International, Interactive Brokers, and TD Ameritrade (for grandfathered accounts). Schwab and IBKR will also open new accounts for Indian residents. Fidelity and Vanguard generally do not — though Fidelity allows hold-and-sell with no new buys.

Should You Liquidate Before Returning?

Tax-wise, this is often the worst option. Liquidating in your final US-resident year triggers full US capital gains tax (up to 23.8% long-term, 37% short-term). Holding and liquidating after becoming an Indian resident can be far cheaper — Indian LTCG on listed foreign equities is 12.5% (post Finance Act 2024) without the US net investment tax surcharge, and during the RNOR window the capital gain may be entirely exempt in India.

The Three Practical Options

• Transfer to Schwab International or IBKR: ACATS in-kind transfer preserves your cost basis, no taxable event triggered. Best for portfolios above 00K.
• Hold-and-wind-down: Keep the existing account, sell positions opportunistically over 2-3 years during RNOR window for lowest combined tax.
• Full liquidation: Only if portfolio is small, mostly in cash, or holds illiquid positions that won't transfer.

The PFIC Trap on US Mutual Funds

If you hold US-domiciled mutual funds (not ETFs), they remain PFIC-classified for any future US filings — but more importantly, after you become an Indian resident, dividend distributions and capital gains are taxable in India at slab rates. ETFs are treated as listed foreign securities and qualify for the more favourable 12.5% LTCG rate. A pre-return ETF conversion is often worth considering.

What About Your US Bank Account?

Keep one US checking account open — Bank of America, Chase, and Wells Fargo all permit Indian-resident customers on existing accounts. You will need it for 401(k) distributions, IRS refunds, and any post-return US compensation (severance, deferred bonus, RSU vests). Close all but one to simplify FBAR filings.