Pro Tip: The Cheapest Way to Transfer Money to India.

transfer money to india

 

As of 2013, about 2 million Indian-born immigrants were living in the United States. This figure accounted for 4.7 percent of the 41.3 million foreign-born population. With a population as large as that in the US, there is always a need to have secure means to transfer money to India.

These transactions are not for individual benefits alone. The gradually developing need to transfer money to India ensures that the business economies are moving progressively.

Whenever you need to transfer money to India, ensure you do it smartly to avoid the unfavorable bank fees and levies.

Going through the available methods of payment can be tiring, so here are some of our picks based on different situations. For a quick comparison table of exchange rates and fees, click here.

 

So What Are The Best Ways to Transfer Money to India?

 

Sending Money Home

Particular transfer services, such as the Western Union are suitable for overseas money transfers for little amounts, and others will remove or reduce transfer charges if you’re transferring a substantial sum of money.

It is, therefore, important that you speak to a money transfer and currency exchange specialist to discuss your requirements.

Our Verdict: With the right foreign exchange specialist, such as OFX or TorFX it is possible to achieve a spread of 1% – and even lower, reduce or remove fees, create a strategy for purchasing currency and also access hedging tools.

Honorable mention: Western Union for the simplicity and handiness of their cash pick up service and the massive network of agents.

 

Studying Overseas

Tuition fees are expensive nowadays. The annual payments to schools, coupled with other related expenses can accumulate. When you’re dealing with large amounts, ensure you search for the best possible exchange rate. For lesser payments, you should take note of transfer charges.

Our Verdict: Transferwise. They are a fast growing company based in the UK. It is perfect for students and parents for bills payment.

Honorable Mention: Nexpay specializes in student payments in the USA.

 

Sending Money for Business

If you constantly have to deal with currency transfers, there are two major factors to consider if you want the best possible option:

  1. The exchange rate margin: This is the difference between the conventional or wholesale exchange rate found on xe.com and the rate they offer.
  2. Additional business services they render like foreign currency accounts, limit orders, and exchange contracts.

Our Verdict: HIFX. Why? Their exchange rates and $0 fee structure will allow you to maximize your overseas receipts or payments. They also offer Foreign Currency Accounts which allow you to save funds in foreign currency and convert them when you feel the time is right.

 

 

Buying a Property

If you intend on procuring a property in India, talk to a property agent with a firm standing in India and the US. It will make the procurement a lot easier and flexible. Plus, you will also get the maximum support needed.

Our Verdict: OFX is an ideal choice for property settlement transfers because each customer has a local account manager who can guide them through each step. They are fully licensed and regulated in both India and the USA.

Honorable mention: ICICI Bank also has a fantastic network both here and in India.

 

If You Are Moving from India to the USA

Every US bank allows money transfers from the US to India, but they do not all transfer Indian Rupee (INR).

It is important to note that many banks do charge a high international money transfer fee, and they don’t usually offer the best exchange rate possible. Using an online money transfer service is one way to avoid these hefty fees and the choices are diverse.

Providers that allow you to transfer money from the USA to India include:

Our Verdict:  HiFX for great exchange rates on US dollars. Particularly for payments under $10,000

 

Tools To Help You Send Money To India

 

The Costs of Sending Money to or from the India

Determining the charges of making transfers can be difficult. Depending on the means used for the transfer, the margins, fees, and charges are not always visible. The following are common charges incurred for transferring from one bank account to another.

  1. A Transfer Fee – Also known as a TT, Telegraphic Transfer, Wire or Remittance fee
  2. Exchange Rate Margin – this is the difference between the wholesale exchange rate you see on xe.com and the rate you get
  3. Correspondent Bank Fees – The amount your bank will charge for transferring money to the right account. It is charged from the amount that finally arrives in the account and is difficult to estimate or reverse.
  4. Receiving Bank Fee- If you are paying foreign currency into an account, the receiving bank will charge you for it. For instance, if you send US dollars to your US bank account, your US bank will charge you to make conversions.

 

What are your options?

 

A Bank

US banks charge higher fees and do not have competitive exchange rates, but that is not an excuse to shun their services. British banks usually have more competitive exchange rates due to competition in the US. Transferring between bank accounts is easier done using a bank.

 

Paypal

PayPal is an excellent option if you’re sending amounts under $1000. The exchange rate they offer are similar to bank’s, and the charges are considerably lower. It is even more convenient if the recipient has a PayPal account.

 

A Money Transfer Company

Money transfer companies like OFX and HiFX are often the cost-effective options when you are transferring between $1000 and $1,000,000 at a time. This is because they offer better exchange rates and lower (and sometimes no) fees. The disadvantage of using a transfer company outside of a bank is that you’ll have to set up an account with them first. This can take between 10 minutes to two days depending on how much information they need from you. Also, the transfer itself will usually take one day longer than using a bank.

 

How to use a money transfer company (instead of a bank)

Using a money transfer provider for money transfers is similar to using a bank, but there are some significant differences. These are the steps to follow when using internet money transfer services.

Setting things up (only has to be done once)

  • Log on to their website and register your details. You’ll need to have some I.D handy
  • Once your account has been approved, you’ll get a login and password
  • Enter the banking details of where you are sending the money. They are usually called the “Beneficiary” or “Recipient.”

Transferring Money

  • Get a quote for the amount you want to send
  • Confirm the details including the rate and how much it is in US dollars
  • You’ll get a deal confirmation. Finally, you’ll need to pay them the US dollars before the money is sent to India.

 

Details you’ll require making your transfer

To send money overseas, you’ll need the following particulars of the bank account you are sending the money too. These are commonly known as Beneficiary or Recipient Details

  1.    The Account Name of your Recipient (person/business you are paying)
  2.    Their address
  3.    The SWIFT Code of their bank

 

A note about sending money to India

It is necessary to make sure ALL the bank details you use are correct. Indian banks are stern and will decline a payment even if a single digit is wrong or a single letter is misplaced.

 

 

SWIFT Codes

Here is a list of SWIFT codes for the biggest banks in the India:

ICICI Bank Limited: ICICINBB

State Bank of India: SBININBB380

Punjab National Bank: PUNBINBB

Canara Bank: CNRBINBB

 

How long does it take to send money to the India?

PayPal, ICICI Bank and Western Union (cash pick-up) are the fastest options. The transfer can be processed within minutes. If you are transferring the money to a bank account, it will take 1-2 days if you are using a bank or 2-3 days if you are using a money transfer company.

Related: How Long Does An International Money Transfer Take?

Is there a minimum transfer amount?

The banks and PayPal don’t have a minimum transfer amount, but some money transfer companies do. If you are sending less than $500 to India and intend to use a money transfer company, ensure you check their minimum transfer amount.

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