There are three different options you can use, each with its own benefits and downsides.
Slow and expensive
Money transfer services
Slower than cash transfers
Let's crunch the numbers: Sending $2,000 to India
The table below shows the costs of using a bank, making a cash transfer and using a specialist money transfer service, so you can see how much of a difference there is when sending $2,000 to India.
This table uses real fees and exchange rates, current as of 21 March 2019.
Money transfer service
$12 + additional correspondent bank fees
1 AUD = 46.9500 INR
1 AUD = 48.0078 INR
1 AUD = 48.7445 INR
Slowest and most expensive
Banks are usually the slowest and most expensive choice for money transfers, while cash transfers are the fastest but cost extra. Money transfer services typically have the lowest fees and best exchange rates.
How long will it take to send money to India?
Banks can take up to a week to send money to India because your money might need to be transferred between multiple banks on the way there. Cash transfers are usually the fastest and can arrive in just a few minutes. Money transfer services aren't as fast as cash transfers, but will often be faster than banks.
Emergency cash transfer
If you need to send money to India as soon as possible, cash transfers might be the best option. Your recipient will often be able to pick up the money within just a few minutes, although they cost more than other transfers.
Cash transfer services are also useful if you or the recipient doesn't have a bank account. This is because you can just pay with cash at an agent location in Australia and the recipient can pick up the cash at an agent location in India, without needing to use bank transfers.
If it's not an emergency, it could be worth planning a same-day or overnight transfer, which is almost as fast but can be much cheaper. The trick is to make sure you deposit your money early enough in the day that it can be processed on the same day, and to remember that transfers will often get delayed over weekends or public holidays.
What to watch out for
Mind the gift tax. Transfers over 50,000 rupees (about AUD$980, depending on the exchange rate) may be subject to a gift tax. This doesn't apply for transfers to "blood relatives" (including spouses, children, grandchildren, siblings and in-laws), or money transfers that are part of a wedding gift or inheritance.
Watch out for the tax on agent fees and commissions. When an NRI (non-resident Indian) sends money to India, a 12.36% service tax may be levied on the fees and commissions paid to money transmitting agents in India. This means that if your money transfer goes through an agent in India, it can cost more than other options. This could be most likely to apply to cash transfers.
AL NAJIB MILLI MUTUAL BENEFITS LTD Address: R305 Sangam Nagar Chandani Agar S P Road Antop Hill Wadala Mumbai, Maharashtra 400605 Hours: 9:30am – 8:30pm Phone: +91-9224618023
BANK OF INDIA Address: No.33/1, Byrathi Extention, Near Ebenezer Hospital, Opp.Bible College, Hennur Bagalur Main Road, Kothanpur Post, Bengaluru, Karnataka 560077, India Hours: 10am – 5pm Phone: +504-6693911
ICICI BANK UTTARHALLI Address: Uttarhalli Main Road, Icici Bank Ltd., Door No 47, Survey No 12–1, Bengaluru, Karnataka 560061, India Hours: 9:30am – 4:30pm Phone: +91 80 3366 7777
HDFC BANK Address: Hdfc Bank Ltd Kalathur Complex No 23 2 New No 4 Kalathur Layout Bangalore Karnataka 560013, S M Road, Kalathur Layout, Jalahalli East, Bengaluru, Karnataka 560013, India Hours: 9:30am – 4pm Phone: +91 99458 63333
You'll get a better exchange rate when the Australian dollar is strong or the rupee is weak. This is impossible to predict, though, but there are factors that influence the exchange rate including:
The political climate, especially if there's an election coming up.
The interest rates that the country's central bank charges.
The level of debt a country has.
Some transfer companies don't allow credit card transfers, so you'll need to check with whichever one you choose. Using a credit card can often result in higher fees and not the best exchange rate.
Some money transfer services have a limit, but others don't. Neither the Indian or Australian governments have a restriction on how much money you can send or receive, though larger money transfers face greater scrutiny from regulatory bodies.
Andrew Munro is the cryptocurrency editor at Finder. He was initially writing about insurance, when he accidentally fell in love with digital currency and distributed ledger technology (aka “the blockchain”). Andrew has a Bachelor of Arts from the University of New South Wales, and has written guides about everything from industrial pigments to cosmetic surgery.
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