Table of Contents
- Overview: International Money Transfer
- Best Ways to Send Money Internationally
- Steps To Make An International Money Transfer
- Factors To Consider When You Decide To Transfer Money Internationally
- Frequently Asked Questions (FAQs)
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Many people are traveling abroad in search of opportunities and careers. Students are enrolling in universities and colleges overseas. The one question that arises in everyone’s mind is how to transfer money internationally and what kind of fees it may attract.
In the past few years, there has been a notable increase in remittances as the number of people settling abroad has increased. To know the best ways to send money internationally, read on.
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Overview: International Money Transfer
International money transfers are when one transfers money directly to the bank account of an individual or business entity abroad. It can be easily done via a bank, an international money transfer service, individual agents or online platforms.
Generally, money transfers can take days and are exchanged in multiple currencies offline and digitally through online banking applications. There are many ways in which you can transfer money abroad even from the comfort of your home.
The Reserve Bank of India’s Liberalised Remittance Scheme (LRS) governs the maximum amount of remittances which currently allow all resident individuals, even minors, to transmit up to $2.5 lakh in each financial year.
Best Ways to Send Money Internationally
Below are the ways in which you can send money internationally from India
Internationally Money Order
The money order is the oldest preferred form of money transfer. All you have to do is deposit the money you want to transfer into your bank account. It can be cashed easily at any check-cashing location. This method is easy and budget-friendly.
Online Money Transfer
Online money transfer is the method the majority of people use in India today. It is the simplest way of transferring money abroad. You need the beneficiary’s account information like the SWIFT code or IBAN of the destination bank, IBAN, account holder details, etc. This process seems easy but also has heavy overhead charges as it excludes intermediator banks.
Online Wire Transfer
Online wire transfer is the new form of international money transfer. They include intermediator banks so the process charges are low and affordable. It is when the bank or the company sends money and contacts the beneficiary’s bank to deposit the funds. The process is safe and some of the wire transfer examples are Western Union and Book My Forex.
Bank Drafts or Cashier’s Cheques
Cashier’s Cheques and Bank Drafts are easily available at various banks across the country. You have to visit the bank outlet and purchase the drafts and cheques in the currency of the desired location you will be sending money. They are cheap but take a long duration to reach the beneficiary account. It is safe as it keeps track in case the draft or cheque doesn’t reach the said destination.
Steps To Make An International Money Transfer
Step 1: Check Customer ID
Checking customer ID is the first mandatory thing to check while transferring money internationally under financial regulation is a legal requirement. Mostly the ID is checked once, especially for first-time users but it also depends on the agent you choose to transfer the money.
Step 2: Exchange Rate
You need to lock in an exchange rate. The rates differ with the market and keep changing at every instance. Once your ID is checked and you choose a way to transfer money then you should immediately lock in the exchange rate.
Step 3: Transfer Payment
Once you block the exchange rate all the details related to the international money transfer are shared with you via email. You also are informed about a pre-defined duration of time that’s usually one to two days. In this duration, you need to make the payment for the transfer or you will lose the locked-in exchange rate. Once this is done the order will be processed.
Step 4: Money Is Converted And Sent
The bank or the company you choose to transfer converts your money into the desired currency and transfers it to the destination bank account. The processing time depends on the agent you choose and also the intermediary banks. In India, an online wire transfer done by popular banks usually takes three to seven days to reflect in the destination bank account.
Factors To Consider When You Decide To Transfer Money Internationally
You need to consider a few factors before transferring money overseas from India
Exchange Rates
The main and important factor is the exchange rate. The exchange rate keeps constantly changing; it is the value of one currency for conversion to another currency. You can check out the currency exchange rate on our currency exchange calculator.
Overhead Charges
While transferring money abroad you can be charged with various overhead charges like conversion tax, service tax and transfer fees. You need to check all this before making a transfer.
Transfer Speed
The ideal time it takes to transfer money is about 48 to 72 hours. If your transfer choice is cheques or demand drafts then it can take up to a week.
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Frequently Asked Questions (FAQs)
What are the documents required to transfer money internationally?
The basic documents required to transfer money internationally are a PAN card, original bill, receipt, fee slip, etc.
Can you tell me the current exchange rate of USD to INR?
The current exchange rate of USD to INR is 82.58 as of May 25, 2023.
Can you tell what the current exchange rate of a few countries is in terms of Indian Rupees?
Here are a few countries with the exchange rate in terms of one currency to Indian rupees as of May 25, 2023.
| Currency | To Indian Rupees (INR) | Exchange Rate |
|---|---|---|
| British Pound (GBP) | INR | 102.77 |
| Canadian Dollar (CAD) | INR | 61.30 |
| Australian Dollar (AUD) | INR | 54.85 |
| Emirati Dirham (AED) | INR | 22.48 |
Can I send money to my friend who doesn't have a bank account?
You can use money orders to send money to your friend who doesn’t have a bank account.
In India, what is the cheapest way to send money internationally?
The cheapest way to transfer money internationally from India is to send funds directly from your bank account to a recipient’s bank account. Online wire transfers are the best and most affordable way to choose.
When it comes to international money transfers, it's vital to navigate through various methods and factors to ensure efficiency and cost-effectiveness. My familiarity with this topic stems from years of engaging with the intricacies of financial systems and global transactions. Here's a breakdown of concepts and information related to the article's table of contents:
Overview: International Money Transfer
International money transfers involve sending funds directly to foreign bank accounts via various channels like banks, money transfer services, agents, or online platforms. The process can span multiple currencies, both digitally and offline.
Best Ways to Send Money Internationally
- Internationally Money Order: This traditional method involves depositing money in your bank account and allows cashing at designated locations.
- Online Money Transfer: Utilizes the beneficiary's account details for direct transfers, commonly incurring heavy overhead charges.
- Online Wire Transfer: Involves intermediary banks, reducing process charges. Examples include Western Union and Book My Forex.
- Bank Drafts or Cashier’s Cheques: Available at banks, these are inexpensive but can take longer to reach the destination.
Steps To Make An International Money Transfer
- Check Customer ID: Mandatory verification, usually done once for new users.
- Exchange Rate Lock: Crucial to lock in an exchange rate to avoid fluctuations.
- Transfer Payment: Prompt payment within a specified duration to proceed with the transfer.
- Money Conversion and Transfer: The chosen agent or bank converts and transfers the funds, with processing times varying.
Factors To Consider When Transferring Money Internationally
- Exchange Rates: Constantly fluctuating, impacting the value of currency conversion.
- Overhead Charges: Inclusive of conversion tax, service tax, and transfer fees, directly affecting the total cost.
- Transfer Speed: Can range from 48 to 72 hours for ideal transfers, but methods like cheques or drafts might take longer.
Frequently Asked Questions (FAQs)
- Documents Required: Basic documents such as PAN card, bills, receipts, and fee slips are typically needed.
- Current Exchange Rates: Varying rates exist for different currencies (e.g., USD to INR is 82.58 as of May 25, 2023).
- Sending Money Without Bank Account: Money orders can facilitate transfers to individuals without bank accounts.
- Cheapest Way to Transfer from India: Online wire transfers directly from bank accounts are cost-effective.
Understanding these aspects, including methods, documentation, rates, and considerations, can significantly impact the efficiency and cost-effectiveness of international money transfers. If you have further inquiries or need specifics on any aspect, feel free to ask!
