This is the most important subject for people of Indian origin or otherwise living outside India. So you have relatives in India that you want to send the money to or when you visit India, you want to have access to funds in Indian currency i.e. INR. I am going to share the secrets of sending money to India with you.
1. INDIAN CURRENCY EXCHANGE COMPANIES: If you live in North America, the easiest way to send money to your relatives in India is by approaching a Currency Exchange company in Canada/U.S.A. You can find their contact information on the South Asian Yellow pages like eastwestdirectory.com. These companies are usually owned by Indians and they can either send the money in cash or by a bank draft. Usually people send the money by cash. This is usually how the process works:
You deposit money in the company's bank account and within 2 business days the money equivalent to INR is delivered to an address in India personally in cash. This process is not really legal and is also called 'hawala'. However, it is probably the most convenient. For people who are not familiar with this process may feel a little skeptic since there is no paperwork involved, however there are companies that have been doing it for years and have good reputation in the Indian communities. Usually they won't accept any transaction less than 100,000 INR and there are no transaction fees. The exchange rate that is quoted by them the day you deposit the money is the one that is applied even if the money in India is delivered a couple of days after. So you don't get affected by the currency price fluctuation and their exchange rates are better than bank's or companies like Western Union.
2. WESTERN UNION: There are companies like Western Union and Moneygram that provide a similar service however you won't good exchange rates and they also charge you a fee for their services.
3. Xoom: Xoom is a new service that handles currency transactions in many different countries including India. It is a better option in that:
- Money is transferred legally.
- Better rates
- Easy process
- Low exchange rates - sometimes free. You can even use your credit card to make a payment.
4. www.remit2india.com : This is also a good option to transfer money to india. The only disadvantage with this company is that if you request a transfer today, they will take 2 to 3 business days to transfer the money and the exchange rate will be applied on the day the money is transferred. So you are taking a chance because in 2 or 3 days, the rates may go down.
5. Traveller's cheque and cash: These are the easiest options. Just bring traveller's cheque or cash and then go to bank like HDFC or ICICI and exchange the money. With traveller's cheque you will get better rate.
6. Wire Transfer: If you have a bank account in India, you can also wire transfer the money from your local bank. If you decide to do that, there is one important point to remember:
Do not transfer the money in INR. Don't ask your bank to convert the money in INR and then wire it. Instead ask them to wire it in your currency i.e. CAD or USD etc. The advantage is that when your money goes to an Indian bank in a foreign currency, they will automatically convert it to INR but will provide a better exchange rate than your local bank. I will write another post about which bank is better in India for exchanging the currencies.
7. ICICI Bank: If you have an ICICI bank in North America, you can transfer money directly from your bank account to any bank in India.
Well, not really, but most of the banks. The exchange rates are not that good but it is an easy process.
- If you have a savings account with them, just call their 24 hour call center and ask them to transfer money to a bank in India. They charge usually $10 each transaction. A better option is to have a savings and chequings account both. Ask them to transfer money to your chequing account from savings account (or do that thru internet banking). This way you won't have to pay $10 because there is no charge to transfer money from a chequing account, although you need to maintain a minimum of $100 balance in your chequing account. Also, the chequing account has to be opened by visiting an ICICI branch and you may or may not have it in your area.
- If you were to transfer money to an ICICI bank in India, then you can do it thru the internet banking and the money is transferred instantly, however it takes a day first to register an Indian bank account with their services. There is no charge for the transfer.
- ICICI bank transfers money only in INR through their Indian banks. That creates a problem for people who have NRE accounts because NRE accounts do not accept a deposit in INR. I will discuss it more in another post.
So these are all your options. Which one is the best one? Depends on your preference. If there isn't much currency fluctuation, then I would go with remit2india.com or Xoom because I already have a bank account in India. If you don't have one, then you will need to consider other options. Carrying the cash is the easiest, but make sure to exchange it at a bank instead of at the airport or Thomas Cook because banks usually offer better rates.
