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Key factors to consider before transferring money from India

Priyanka Rao

Priyanka Rao

Content Strategist, Jupiter Money

In today's globalised world, the need for cross-border money transfers is more prevalent than ever, and residents of India are no exception. Whether it's for personal reasons like supporting family members or for business-related transactions, sending money abroad from India requires careful consideration around several key factors. From exchange rates and transfer fees, to processing times and security measures, understanding these variables is crucial for a seamless and cost-effective transfer. This article will explore the essential factors to keep in mind when sending money from India to another country.

Check for money transfer options

When it comes to sending money abroad from India, one of the key factors to consider is the available options for money transfers. You can choose from a range of options including banks, online money transfer services, and foreign exchange dealers. While banks offer security, they can be expensive due to high transfer fees and unfavourable exchange rates. Online money transfer services, on the other hand, are more affordable and convenient, with many providers offering competitive exchange rates and low fees. Foreign exchange dealers are also a viable option, particularly for larger transactions, as they specialise in currency exchange and can offer attractive rates. 

Factors to consider for money transfer from India:

1. Exchange rates

When transferring money internationally, obtaining the optimal exchange rate is critical. This rate signifies the value of one currency relative to another foreign currency and can have a significant impact when transferring a substantial amount of funds. By obtaining a favourable exchange rate, you can limit your expenses and potentially save money during the transfer process.

The foreign exchange market, which has a daily turnover of approximately $5 trillion USD, is one of the world's biggest industries. Conducting some research before initiating an international money transfer can assist you in locating the most favourable exchange rate, allowing you to secure the greatest value for your funds.

2. The security of the transfer

When selecting a money transfer provider, it is crucial to prioritise security measures. Opt for a provider that employs encryption techniques to safeguard both your personal information and the transfer of funds. This will help ensure a secure transfer process.

3. Fees and charges

When sending money overseas, it is crucial to take into account the associated fees and charges. It is important to be aware of the costs incurred by the bank during the transfer process. The transfer fees may differ across banks, with some charging a fixed amount like Rs. 1,000 per transaction, while others may levy a percentage fee based on the amount being transferred.

4. Overhead charges

Similar to domestic account transfers, overseas transfers also incur transfer fees, which may be a fixed amount or a percentage of the transferred sum. In addition, to transfer charges, there are foreign conversion charges and service taxes that apply to both parties involved in the transaction.

5. Tax clearance

Tax clearance criteria differ based on the country of origin for the funds being transferred. In some cases, residents aged 18 or older may be permitted to use a specified amount of discretionary allowance annually. Furthermore, there are provisions for investing in foreign funds.

6. Convenience

When sending money, it's essential to consider the convenience of both the sender and the recipient. Factors such as the mode of transfer (online, check, or in-person), transaction costs (including service fees, transfer fees, and exchange rates), transaction speed (urgent or non-urgent), and recipient's convenience (direct bank transfer, cash pick-up, or home delivery) should be taken into account when selecting the optimal money transfer option.

7. Speed of the transfer

When sending money overseas, it's crucial to consider the speed of the transfer process. Unfortunately, many individuals choose bank transfer services that take several days to complete the transaction. To ensure a quick and efficient transfer, it's recommended to utilise a trustworthy and verified service which typically takes between 1-5 days for international money transfers depending on the payment method used.

It's important to verify the transfer speed of such services beforehand by checking with the provider or inquiring with their customer support.

8. Customer service

In the event of complications such as delayed or undelivered funds, having access to reliable assistance is invaluable. When selecting a remittance company, it is important to confirm that they offer reputable customer service. 

Final Thoughts

Sending money overseas from India requires thorough planning and research. You must understand the fees and taxes associated with the transfer and the currency exchange rate. Different providers have different advantages, so it is important to compare them before making a decision. Additionally, you should consider how long it will take for the money to reach its destination and whether you need to send multiple payments or one lump sum. Finally, you must always make sure that your provider is authorised by the Reserve Bank of India before making any transfers.

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