The latest ‘Migration and Development Brief’ published by the World Bank indicates that India ranks first in terms of the volume of incoming remittances. NRIs all over the world send money to India for various reasons. It could be to support their children’s education, fund a wedding, help a loved one, engage in divestments or investments, pay for accommodation, or even buy assets like real estate.
Just as there are a number of reasons why people send money to India, there are also a number of ways for NRIs to send money to India. In this article, we shall explore the various money transfer services and methods like instant money transfer. Choose one of them based on your requirements and the urgency of the transfer, the amount of money you wish to transfer, the purpose of the money transfer to India, etc.
For instance, you might wish to transfer money every month to support your family’s living expenses. Or you may have an urgent need to transfer money to cover medical expenses. The most suitable money transfer services and methods vary in these contrasting cases. Let us look at the services appropriate in different situations.
Methods of money transfer to India
Money transfer from abroad to India can be costly, slow, and inconvenient; or cheap, fast, and convenient, based on the suitability of the method you use as per your requirements. Each method of international money transfer comes with its own advantages and disadvantages. Listed below are two distinct methods, with their respective benefits and limitations.
1. Electronic fund transfers (Account Transfers)
Also known as international money transfer, SWIFT transfer, wire transfer, or telegraphic transfer, it refers to money transferred directly from your account to the creditor’s account. It is a popular option due to its convenience (as a direct transfer method) and security. However, it can often be expensive. It can take a number of days for a wire transfer to go through, and there are significant variations in cost due to fluctuating foreign exchange rates. In addition, there can be a number of fees charged by both the sender’s bank as well as the recipient’s bank, which can drive up the overall cost of the transaction.
2. Money transfer services offered by IMTOs
Traditionally, sending money internationally was an arduous task. It was expensive and involved a number of intermediaries. Fortunately, the arrival of international money transfer operators (IMTOs) has simplified this process. Money transfer services offered by IMTOs are now one of the most attractive ways to send money to India. This is because most transfer service companies like Xpress Money are able to offer cheaper and faster transfers with different options to receive money. Money sent through IMTOs can be sent to a bank account or can be collected in cash in India. If money needs to be sent urgently, cash transfers are recommended as the money can be collected instantly in India.
Although transfer companies still charge a fee or a margin for transacting money, the degree of margin and fees involved is significantly less when compared to banks. Here are some reasons why these money transfer services are preferred:
- International payments are the core service of IMTOs, so they try to find the best exchange rates possible. Banks, on the other hand, are relatively diverse organizations with larger product offerings and hence tend to focus less on international exchange rates.
- The IMTO market presents several options. It is affordable and inexpensive to access. People who recognize this have been able to lower their transaction costs and transfer cash conveniently using money transfer services.
- IMTOs have large networks across the country making to possible to send money to the remotest place in India.
Which method is the best?
We saw there are several different methods to transfer money, each with its own set of advantages and disadvantages. While electronic fund transfers or wire transfers are secure, they can also be expensive and time-consuming. It may also be an appropriate option for the transfer of relatively smaller amounts.
In case of planned payments, especially larger chunks, it makes sense to use a bank since IMTOs may have a cap on the maximum amount that can be sent at a time.
In most cases, the more attractive option seems to be the use of money transfer services offered by international money transfer companies as they offer different ways the money can be received. If money needs to be sent instantly, opt for sending money through an IMTO. Companies like Xpress Money offer excellent services that represent one of the cheapest and most convenient options for international money transfer.
Like electronic fund transfers, well-reputed IMTOs are a safe mechanism for the transfer of funds. Xpress Money, for instance, facilitates the transfer of funds at an average of 2% transacting cost globally on all transactions.
Choose wisely and choose well when sending money as you would want to make the most on every dime you send.