International Money Transfers from India

In an increasingly globalized world, the need to send money across borders has become common. Whether it’s for supporting family, paying for education, or  understanding how to make an international money transfer from India efficiently and securely is essential. We've crafted this guide which will provide you insights into the best practices and tips for international money transfers.

What is an International Money Transfer?

An international money transfer involves sending money from one country to another. This process includes converting Indian Rupees (INR) into the recipient's currency. Various methods are available for these transfers, each with its own set of benefits and drawbacks.

 Methods of International Money Transfer from India

 1. Bank Transfers

Banks are a reliable option for international money transfers. They offer secure and direct transfers to the recipient’s bank account abroad, although this method can sometimes be slower and more expensive compared to others. Some of these banks include HDFC Bank, ICICI Bank, PNB & Axis Bank. More often, bank transfer requires that both sender and recipient hold active bank accounts. Banks can take a long time hence can have longer processing times.

 2. Online Money Transfer Services

Online services provide fast and convenient international money transfers. They often offer competitive exchange rates and lower fees compared to banks, making them a popular choice. Though one should be wary of such services and only make transactions with RBI authorized dealers. They also require account setup, and may also have hidden processing fees and charges.

 3. Forex Providers

Specialized forex providers offer quick and efficient transfers with competitive rates and lower fees. These providers are particularly useful for their expertise in currency exchange. These are accessible without needing a bank account. Since money transfer is their business instead of banking, they usually have good customer support.

 Factors to Consider When Choosing a Transfer Method

When deciding how to transfer money internationally, consider the following factors to ensure you make the best choice:

 1. Transfer Fees and Exchange Rates

The cost of your transfer depends on fees and exchange rates. Banks typically charge higher fees and offer less favorable rates, while online services and forex providers are more cost-effective. Always compare these costs before deciding. 

Moreover many countries charge fees for receiving money from abroad. For example, some of the Australian Banks may charge additional receiving charges. For credit of a Commonwealth Bank Australian dollar (AUD) account (regardless of currency), Commonwealth Bank of Australia charges up to $11.00 per transfer (CommBank, 2024). This differs from bank to bank, and you can check with your provider for the same.

 2. Convenience

The urgency of your transfer is important. Bank transfers can take several days, whereas online services and forex providers can complete transfers within 24 hours. Choose a method that aligns with your time requirements. Consider how convenient the transfer process is. Online services and mobile apps allow for transfers from anywhere at any time, while banks and some forex providers may require visiting a physical location.

 3. Security

Security is paramount in international money transfers. Banks, well-known online services, and reputable forex providers offer high levels of security. Always ensure you are using a trusted service to protect your funds.

4. Customer Support

Good customer support is essential in case you encounter issues. Banks and established online services typically offer robust customer support. Make sure your chosen provider has responsive and helpful customer service.

 Common Pitfalls to Avoid

 1. Ignoring legalities

Ensure that the transfer service complies with international and local regulations. In India, the Liberalised Remittance Scheme (LRS) allows residents to remit up to a particular amount per financial year for educational needs. By new TCS rate with effect from 1 October 2023,  the threshold limit are given as below distinguished as per the type of Remittance Abroad (Indian Finance Ministry, 2023):

• For the purpose of education, if the amount  being remitted is from a loan obtained from any specified institutionsome text
  • Threshold limit -  NIL upto Rs. 7 lakh. 0.5% of the amount or the aggregate amount over Rs. 7 lakh per financial year
• For the purpose of education, other than above some text
  • Threshold limit - NIL upto Rs. 7 lakh 5% of the amount or the aggregate amount over ₹7 lakh per financial year

2. Not Comparing Exchange Rates

The above data is taken from Google Finance as per 15th of July 2024. As you may observe, even minor fluctuations in exchange rates, often seen in decimal changes, can result in significant differences when large sums are transferred internationally. For instance, sending 5,000 US Dollars to the United States on July 14th, rather than on the 1st of the same month, could cost an additional 400 INR. Similarly, if you plan to transfer Pound Sterling to the UK, the amount could increase by 14,000 INR over a fortnight. 

 3. Overlooking Transfer Limits

Some services have limits on the amount you can transfer. Ensure your chosen method can handle the amount you need to send. Moreover, The  total amount of foreign exchange purchased from or remitted through all sources in India during a financial year should be within the cumulative limit of USD 2,50,000.

Once a remittance is made for an amount up to USD 2,50,000 during the financial year, a resident individual would not be eligible to make any further remittances under this scheme, even if the proceeds of the investments have been brought back into the country.

More to it is that many of the platforms have maximum and minimum transfer amounts,however since there are no restrictions on the frequency of remittances under LRS as long as you adhere to the limit, you can use platforms many times but each transaction carry additional fees. (RBI, 2023).

Steps to Make an International Money Transfer from India

Here’s a step-by-step guide to help you make an international money transfer from India:

Step 1: Choose Your Transfer Method

Select whether you will use a bank, online service, or forex provider. Research and compare the options to find the best fit for your needs. While Bank are a popular option, they often have slower pace than other services. Likewise most online services are not duly authorized by RBI. We at Supreme Forex are RBI authorized II Dealer and adhere to RBI guidelines and are here to make your transaction swift & secure.

Step 2: Gather Necessary Information

You will typically need:

• Your identification documents (e.g., passport, PAN card).

• Your bank account details or payment method.

• The recipient’s full name and address.

• The recipient’s bank account details or identification details.

Step 3: Initiate the Transfer

Follow the process specific to your chosen method:

• For banks, visit your branch or use online banking.

• For online services, sign up and enter the transfer details.

• For forex providers, visit their office or use their online platform.

Step 4: Confirm & Track the Transfer

After initiating the transfer, you will receive a confirmation receipt or reference number. Keep this information safe for tracking and resolving any issues. Use the tracking tools provided by the service or contact customer support for updates on your transfer’s status.

Role of Forex Providers

Forex providers play a crucial role in facilitating international money transfers. They offer competitive exchange rates and lower fees, making them a cost-effective choice for many users. Forex providers also ensure quick and efficient transfers, often completing transactions within a day. Their expertise in currency exchange ensures you get the best value for your money when sending funds abroad.

Tips for Secure and Efficient International Money Transfers

 1. Compare Providers

Always compare different providers to find the best rates and fees. Use online comparison tools to see how banks, online services, and forex providers stack up against each other. If your transfer is not urgent, plan ahead to take advantage of better exchange rates and lower fees. Avoid making transfers during high volatility periods in the currency market.

 2. Verify Recipient Details

Double-check the recipient’s details to avoid errors that could delay the transfer or result in funds being sent to the wrong person.

 3. Use Trusted Providers

Stick to well-known and reputable providers to ensure the security and reliability of your transfer. Read reviews and check their track record before making a decision. Keep an eye on exchange rates to time your transfer for the best value. Some providers offer tools and alerts to help you monitor rate fluctuations.

Here's how we can simplify this process for you:

• We strive to offer the best exchange rate in the market. Our operations adhere to RBI guidelines and regulations
• With our 28+ years of expertise, you can trust us to handle your remittance efficiently.
• Our offline branches in key locations such as Delhi, Ahmedabad, Hyderabad, and Kolkata ensure accessibility.
• Choose between home collection or a branch visit for KYC procedures..
• Benefit from personalized guidance from our experienced currency experts throughout the process just by following few steps

Conclusion

International money transfers from India are essential for various purposes, including supporting loved ones, paying for education. By understanding the different transfer methods, comparing providers, and following best practices, you can ensure your transfers are secure, efficient, and cost-effective. With this comprehensive guide, you should now have a clear understanding of how to make an international money transfer from India. Always prioritize security, compare options, and plan ahead to ensure your transfers are both efficient and cost-effective.

Supreme Forex, with our competitive rates and expertise in currency exchange, offer a valuable option for making international transfers. Contact us today to learn more about our services and how we can assist you with your international money transfer needs.

Sources:

• RBI.

https://www.rbi.org.in/commonperson/English/Scripts/FAQs.aspx?Id=1834

• Finance Ministry.

https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1936105

• CommBank.

https://www.commbank.com.au/personal/international/international-money-transfer.html‍