What’s The Best Way to Send Money to India?

If you’re an NRI like me, you know the pain – finding out the best way to send money to India. Well, in this article, I’ll tell you about some of the best ways to send money to India, which method has the least transaction charges etc. Read on…

Recommended Service – TransferWyse

TransferWyse is not a bank, it’s an electronic transfer institution that excels at one thing – money transfer across different countries. This is why it is cheaper than banks (who have overheads to cover).

Here’s a sample scenario.

As you see, Transferwyse will give you the same exchange rate as seen on Google.com for that day. Banks usually cannot and do not give better rates, unless you have some kind of special arrangement with them.

• Faster money transfer (usually less than 24 hours)
• Better exchange rates compared to banks.
• No markups/bank fees/hidden charges.
• Real exchange rates (like seen on Google.com)

More about TransferWyse 

1. Wire Transfers

Wire transfers are quick money transfers that lets you send money to anyone in India, via your bank account overseas. You need to have a valid bank account and the money can be sent as fast as days. To be able to send money via a wire transfer, most banks in US want your bank account to have verified sender’s ID and bank details. Usually, it takes up few days  to set this up as they do a verification with the reciever’s bank account in India. But once set up for the first time, you don’t  have to do it again. You can send money from your online bank account in a simple few steps.

2. Money transfer

The second way to send money to India safely is by using dedicated money transfer companies. These companies offer services to send money to India easier than with a bank account. They are quicker, easier but comes with commissions. Many people prefer this as a way to send money to India quick.

3. Via NRI and NRE Accounts

If you are looking for a non-taxable way to send money to India from your bank account abroad (say your salary account) then this is the best way out. You need to have an NRE or NRI account prior to sending money. You’d also need a verified bank account from the receiver back in India (or your own account) to be able to send money. The process takes about 1-2 weeks.

4. Using Personal Checks

Another easy way to send money to someone in India, is the good old way of writing a check (or cheque). This is a very unpopular method because it takes time to clear checks. But for certain transactions for which records has to be maintained, a check is the best way out. (For example, buying a property in India.)

5. Bank Drafts

Yet another un-popular way of sending money to India is by using bank drafts. If you have a bank account abroad, contact them to buy a bank draft or a cashier’s check. It’s essentially a fool proof way of sending money as your money is traceable (unlike money order). Also, it will take a lot of time than money transfer to get your bank drafts/cashier’s checks cleared. Some Indian banks also does not accept checks from US banks.

Quickest way to send money to India

Now, I’ve seen many people talk about money transfer as purely a matter of the lowest transaction fees. That is, the lowest transaction charge the service takes, the best it is. While I agree, that they are the cheapest money transfer services, they really are not the quickest of safest.

Let’s assume that you have an emergency at home and folks in India need some money quickly. If you got to the lowest transaction charges money transfer guy, you’ll be surprised that you will be able to send the money over in a certain amount of time, normally going up to one day or more. In case of emergencies, that is not what one wants, right?

You should be able to send money quickly. In such cases, Western Union is my personal choice. They charge about $25 per every transaction (of up to $500) and you don’t even need to give your identification data.(Though I would recommend it.) The money reaches India in couple of minutes, and anyone in India can accept or withdraw it from any of Western Union’s nearest branches – which is almost any post office or banks.

Western Union Rates for Sending Money to India

Option 1 – Cash reaches India In Minutes

Up to $50 – $5 Transaction Fees.

Up to $2,5000 – $25 Transaction Fees.

Option 2 – Cash reaches India In Days

Up to $1000 – $6 Transaction Fees.

Up to $2,5000 – $12 Transaction Fees.

Details here.

Xoom Instant Money Transfer

Xoom  is another money transfer service to India that allows almost instant money transfer. Just like Western Union, they have their network banks, (although lesser than Western Union), where from anyone with a valid ID proof can withdraw money in India.

Xoom’s network banks in India include: ICICI Bank, Punjab National Bank, HDFC, SBI, Axis Bank, Citibank and many more.

When you send more than $1,000 and pay with your U.S.-based bank account, there are no fees associated with Xoom.

Xoom has some additional terms and conditions however, that limits the number of transactions and amount of money that can be transferred.

The maximum transaction amount may not exceed $2,500 US dollars (or IN Rupee equivalent) for deposit, cash pickup or delivery. The maximum cash pick up amount permitted is INR 50,000. Pick ups over INR 50,000 will be paid by local crossed check only.

A recipient can receive a maximum of 30 transactions per year.

How to get best exchange rate when sending money to India?

This is an interesting question. In fact, except emergencies, when people send money to India from USA, this is the only question that people ask. Although some money transfer agencies give fast and quick service, they do not give the best exchange rate.

Exchange rates fluctuate daily. But money transfer agencies has their own exchange rates and work accordingly, this is the reason why different agencies have different exchange rates. Western Union for example, is notorious for offering not so good exchange rates. Their service revolves around fast and effortless service with a lower exchange rates being the trade off. However, there are some other money transfer agencies that offer best exchange rates with comparatively good service. Let’s list some of them below.

State Bank of India – Better exchange rate than others

For instance, here in the Bay Area, SBI has a branch in Santa Clara, that offers great exchange rates. Rather than functioning as a money transfer service, what they do is two things. Wire Transfer and Direct Bank Deposit. If you have an account with SBI, they make things easier, as SBI allows you to send money to many Indian banks at a better exchange rate than many others. Details here.

Check SBI Exchange rates here.

Remit2India : Send money without limits

Remit2India is a popular service that allows you to transfer money from India to USA. They have lot of options when it comes to sending money. Let’s take a look.

ACH Transfer (Automated Clearing House) – It’s more like an e-check quick transfer. No physical visits to your bank. No paperwork. Just log in, debit your US bank account and we’ll credit your receivers account in India. Its a quick and easy way to send money to India without any hassles.

Check Transfer – Mail your check to a local address. Your money reaches your receiver’s account in seven working days, once we receive your check. You can send as much as you like as there’s no upper limit. Disadvantage is that it takes time, but there are no limits, so if you want to send huge amounts of money, this is probably a good way to go.

I have to admit that Remit2India has good exchange rates as well.

Comparison Chart : Best Money Transfer Service to India from USA

	Trans Fast	Xoom	Western Union	ICICI Bank	Remit2India
Transaction Fees (Up to $1000)	$4.49	$4.99	$25	$2	$5
Exchange Rate (Indicative as of April 2013)	53.63	53.75	54.00	54.10	54.25
Time Bank Deposit	24 Hours	24 Hours		4 Days	4 Days
Time Cash Pickup	Minutes	–	Minutes	–	–

Most of these services have changing policies and terms, so check with them for details before making a move. Also, keep in mind that I haven’t used all of them except for some like Western Union, SBI, ICICI Bank and Remit2India.

Do add in your thoughts and comments.