Indians constitute one of the biggest diasporas worldwide, with a whopping 18 million people living outside the country as of 2020. The dynamic and vibrant international Indian population serves as a strong and influential global force, contributing to both the host country’s and the source country’s socio-economic situation. The country with one of the largest populations of Indian migrants is the United States, with 2.7 million inhabitants, just second to the United Arab Emirates. Thus, one common concern for many Indians and NRIs is money transfers. Are you among the thousands of people looking to transfer money to the USA efficiently and speedily? If yes, then read ahead!
THINGS TO KNOW ABOUT TRANSFERRING MONEY FROM INDIA TO THE UNITED STATES
India and the United States are on the same page regarding technological advancement, commerce, politics, etc. We can witness a collective growth of Indian-American businesses, leading to a rise in both International Debit card usage and international money transfers. To begin with, in the context of financial systems, the money transfer transactions between India and the USA are considered as foreign exchange. Foreign exchange services are allowed for the following purposes –
· Higher Education
· Study Abroad
· Transfer of funds to relatives for maintenance purposes
· Medical Tourism
· Investments in Equities
· Investments in Stock
· Gifting options and donations
Likewise, money transfer between India and the USA is prohibited from trading transactions and lotteries. Nevertheless, the Liberalization Remittance Scheme introduced by the Indian government restricts the maximum limit of transferring money from India to the US at USD 250000 per annum. In addition, it is worth remembering that the rules and limits that apply while you transfer money from India to the USA may also vary based on various factors, such as the source of funds, the reason for payment, and so forth.
Now that we have gauged the background knowledge on the topic, let us deep-dive into the best international money-transferring mechanisms available.
- International Wire Transfer via Traditional Banks
Also known as money transfers, bank transfers, or credit transfers, international wire transfer is a popular and easy way to transfer money from India to the USA. Traditional international wire transfers are done by banks, but in India, they charge anywhere from INR 500 to 1000 to process your transaction. Likewise, most foreign banks that receive the money also levy a correspondent fee ranging from USD 10 to 40.
However, nowadays, various other ways of online wire transfers are available, thanks to the ongoing digital revolution, something that we will analyze in the following sections (See BookMyForex section below). When it comes to wire transfers via banks, the amount of paperwork needed can be hectic for many people. To get started with an international wire transfer, you have to include the following –
- Account Holder’s name, institution number, and mailing address
- Branch number and type of bank account of the receiver
- Account number or IBAN (International Bank Account Number) of the receiver
- SWIFT code and routing number (international wires)
It is essential to remember that wire transfers may vary depending on your bank, and the payment processing may take between 3 to 5 business days. Likewise, faster service comes with a heftier charge. Lastly, even though wire transfer is a secure way of sending money, there are often swindles involved when transferring massive amounts of funds, and you cannot reverse the transaction if you change your mind.
- Online Money Transfer Services
Due to increased demand for international money transfer services, various entrepreneurs have started providing services in foreign exchange. Long gone are the days when Forex services were only provided by the traditional banks. Nowadays, it is common knowledge that big banking institutions struggle to offer dynamic and robust systems through which you can transfer money from India to the USA.
On the contrary, with online money transfer services, you can transfer payment from your regular INR bank account and deposit it directly in the USD account with convenience. The best part of online wire transfers or online money transfers is that they offer fantastic exchange rates directly and fulfill the transaction after levying a reasonable commission.
Some of the best online money transfer services available include the following –
- Western Union – They allow Indian customers to transfer money to bank accounts from all over the world. The transaction limits are USD 10000 for education and USD 5000 for other purposes. The maximum annual limit is 250000. In addition, the processing fee depends on the funding method and payment value. In addition, the exchange rate used will include a markup based on the mid-market exchange rate. (it is the exchange rate seen on Reuters and Google)
- Wise – It allows you to transfer money securely and at low costs. All the transfers are done using a mid-market exchange rate, and the fees are displayed upfront when you are setting up the transaction. The transaction limit in Wise is USD 250000 per year, with a maximum of INR 650000 for education purposes.
- World Remit – It specializes in remittances and small transfers. World Remit has an upper limit of USD 10000 for personal transfers. In addition, the rates are usually better than traditional banks. The best part about World Remit is that it offers more flexible delivery options as compared to others like Western Union or PayPal.
- ExTravelMoney – It is one of the biggest Forex marketplaces in India. You can transfer money to the USA by creating an account and getting verified.
- BookMyForex – It allows Indian customers to transfer money via international wire transfers and foreign currency demand drafts. They offer excellent Forex rates, and you also end up paying 2 percent less than you would when you visit banks for a traditional wire transfer or demand draft. The best part about BookMyForex is that you can lock in the exchange rate for as many as three days when you set up the payment.
- RemitOut – The last online money transfer platform on our list is RemitOut, which processes all payments through RBI-authorized institutions for safety. RemitOut offers omni-channel support, and you can conveniently transfer money online or by phone. It has been most commonly used for making payments pertaining to international education and study abroad.
- Foreign Exchange Demand Draft
It is one of the oldest methods of transferring money from India to the USA. Simply put, a demand draft means transferring money from one bank account to another. Flexibility and simplicity are the distinguishing factors of transferring money via demand draft. It is essential to note that despite their highly conservative and traditional nature, the use of demand drafts has, in fact, increased over the past few years, owing to top-tier resilience and high liquidity.
Demand drafts are perceived as legitimate financial instruments by all American institutions, providing them a near-universal appeal. To draw a demand draft, you must consult with your bank’s representative and apply for the demand draft. The required information, such as the transferable amount and the account holder’s information, will be enquired about. Then, after charging a specific fee from your account, the bank will assign a demand draft from the receiver in America.
The validity of the demand draft is up to six months. However, it is essential to remember that the demand draft may take several days to process. Thus, this can be the method to transfer money when you have time to spare and are not particularly tech-savvy.
Now that we have looked at the top three methods by which you can transfer money from India to the USA, let us examine a few of the factors you need to consider.
THINGS TO LOOK FOR IN AN INTERNATIONAL MONEY TRANSFER METHOD
- Speed – Most people cannot afford to transfer money to the USA at a snail’s pace. The process of transferring money can be time-consuming, so the payment mode you choose should be speedy. The key is to opt for a mode of payment wherein the money is transferred in the same timeframe to avoid late fines.
- Exchange Rates – Needless to say, exchange rates shoot up in the blink of an eye. Thus, the option of freezing the interest rate at the right time can help you hedge the exchange rate risk. Therefore, if a money transfer process allows you to freeze the Forex rate immediately, then go for it.
- Security – Transferring money to the USA is expensive, which may reach up to thousands of dollars, depending on the purpose. Thus, you must pick a service provider you can trust your money with, besides the time adherence and cost-effectiveness factors. In addition, robust security features are also things that you cannot ignore while making an international transaction.
- Convenience – Lastly, you should opt for a hassle-free money transfer method. If going to a bank to make the transaction makes you feel at ease, you can do so. Likewise, online money transfer is ideal if you prefer the digital route.
So, there we have it, the top three ways you can transfer money from India to the USA.