For many of us, sending money abroad is pretty common. If you’re a student studying abroad, a businessman, or have property overseas, you’re probably familiar with this drill. Although it may sound simple in theory, there are quite a few factors to keep in mind in order to send money overseas successfully. Consumers find themselves entangled in a web of hidden exchange rate mark-ups and high fees whenever the rupee is converted to a dollar, euro, or any other international currency.
There are, however, some legitimate charges associated with international money transfers. You can, for example, be charged a transfer or remittance fee, which may be a fixed amount or a percentage of the transfer amount. International remittances may also be subject to delivery charges in some countries or banks, which may reduce the total payout. In order to better understand fees and charges involved with international money transfers, let’s look at the details!
What are the Fees & Charges for International Money Transfers?
There is a lack of transparency around fee structures, which makes it difficult for people to understand the actual costs involved in sending money abroad. This lack of transparency makes it harder for users to make informed decisions when selecting the best payment mode. It also makes it easier for forex providers to take advantage of users and charge hidden fees. This ultimately leads to poor customer experiences and a lack of trust in the industry.
There are usually two main fees associated with any money transfer, and it is important to double-check each one.
1. Transfer fees
The fees charged by forex providers for routing money to international accounts are known as transfer fees. Transfer fees vary depending on the forex provider, the size of the transaction, and the destination country. For every international fund transfer, traditional forex providers and banks charge a transaction fee of between Rs 500 and Rs 2,000. There are, however, forex platforms that offer zero transfer fees on overseas money transfers. Customers should compare the fees of different providers before making a transfer abroad.
2. Nostro charges
Nostro accounts are accounts that Indian banks open in foreign banks to hold foreign currencies and route their money transfer transactions. As an intermediary bank, the foreign bank charges a Nostro fee for facilitating these transactions. It is imperative to find out what the Nostro charges are before proceeding with any service provider since they can vary between USD 15 and USD 30 per transaction. Nostro charges can be paid by either the sender or the receiver.
Hidden Fees & Charges on International Money Transfers
Outward remittances cost more when hidden forex markup & high fees are added to the transaction. These fees can add up to a significant cost for the sender. A markup fee is added to the exchange rate by many forex providers. They hold higher margins and display a fixed exchange rate for the entire day to offset any adverse fluctuations or changes in the exchange rate. This means that the customer ends up paying more than the actual rate of exchange. It is important to be aware of these hidden fees so that you can make informed decisions before initiating the transaction. As a result, you should compare different providers to find the best exchange rates.
Rather than just sending your money via any unreliable forex providers & money changers, you might want to think about how you can save more by taking the time to research what is the best fit for you. While your trusted local bank may offer uncomplicated – even helpful – service with your ordinary monthly transactions, you’ll likely find things get a bit trickier when it comes to sending money overseas. All banks tend to offer poor exchange rates and impose hidden fees regardless of where you have an account. There is a need for greater transparency across the industry regarding hidden fees related to foreign exchange transactions.
Tips to Avoid Hidden Fees & Charges on International Money Transfers
Consumers were unknowingly paying “unnecessary fees on foreign transactions” when forex providers charged exchange-rate markups that users weren’t aware of for far too long, but not anymore. Here are some tips for avoiding hidden fees and charges when you use Forex providers for International Money Transfers:
Compare Forex Providers To Get Cheaper Rates
Despite the fact that banks appear to be the most trusted medium for money transfers, you can end up paying exorbitant forex markup and transfer charges. However, due to the high transaction size of foreign money transfers, you also have to pick a secure and reliable service provider. As technology advances, people are finding online alternatives to traditional forex transfers that are more cost-effective yet very safe.
The choice of your money transfer provider must be made very carefully. For instance, you need to find out whether a provider charges a flat service fee, a percentage rate, or offers zero transfer fees. To minimize your charges and maximize your payout, it’s best to pick a forex provider that offers zero or low transfer fees.
Look at the Hidden Markup Over the Interbank Rate
There are many costs associated with studying abroad. Don’t forget to check the interbank rate when transferring money if you want the best rate. The interbank rates are easily available on search engines, business news channels, etc. Your jaw will drop when you see and compare how much banks and local money changers mark up over the interbank rates.
In most cases, the markup is up to 5% over the interbank rate. You can easily save anywhere between Rs 5000 and 40,000 on USD 10,000 money transfers by choosing a forex platform with minimal markup. Your transaction would be more cost-effective if your rates are closer to the interbank rate.
Check the Offers, Discounts, and Promo Codes
There are many online forex companies that occasionally offer discounts or coupons to their customers on foreign transactions. Special offers may be available during certain periods throughout the year, such as holidays like New Year. Therefore, you should use such deals to send money internationally for an affordable price. Usually, you can find promo codes and coupons on a company’s website or by contacting them directly via email, chat, or other means.
Additionally, many online money transfer services offer special offers for new customers, which may include zero transfer fees. This is why you should sign up for such offers to avoid paying high fees when transferring money. You can save a lot of money by doing this, especially if you’re transferring large amounts.
Avoid Multiple Transfers
When you transfer money in small bits, you will incur different transfer costs for each transaction. In order to save money, you’d want to combine your small payments into one large transaction. Some forex providers may also waive the transfer fees associated with lump sum transfers, so you may be able to take advantage of offers and promotions related to large transfers.
What’s the best way to transfer money abroad?
The rates charged by various money transfer companies for foreign payments vary based on many factors. With that being said, international money transfers shouldn’t be an expensive affair. BookMyForex aims to provide transparency in foreign exchange transactions, charge as little as possible, and inform you of all details upfront. No hidden costs! No bad exchange rates!
We are leading the way in enabling forex transactions to be easier, more convenient, and more affordable, thus saving consumers huge amounts of money in the process. We make it easy for you to send money abroad from India through our user-friendly website and mobile app. Among other things, you can pay student fees, send money overseas to your family and friends, transfer money abroad for work or immigration, and make many more forex transactions with ease. Here’s why you should use BookMyForex when you’re sending money overseas:
1. BookMyForex platform offers low-cost remittance services while being entirely paperless and online.
2. We facilitate remittances abroad at live rates that are very close to Interbank rates, thus providing a better exchange rate for the customers.
3.If you use our platform to transfer funds overseas, you could save up to 5% on standard bank rates.
4. There are no hidden charges and the remittances are carried out only through trusted banks in India.
5. At BookMyForex, we have zero transfer charges on international money transfers. (Use Promo code ZEROBANKFEE)
6. Our “Book Now, Pay Later” feature allows customers to lock in their desired exchange rates and complete the transaction within 3 days.
7. We process all transfers within 12-48 working hours of receiving the funds and documents.
8. BookMyForex also provides high-quality customer support services.
If you are planning to transfer money abroad, stay informed and always compare the rates & fees before making a decision. At BookMyForex, we will make sure that you get the lowest rate on money transfers as well as the best services.