Buying Foreign Currency
October 10, 2017
5 minutes, 22 seconds Read

Your Complete Guide to Buying Foreign Currency in India!

Buying Foreign Currency

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Before we can give you few pointers on “Buying Foreign Currency in India”, let us answer a very important question first.

When should you buy foreign currency? Before your travel or in the country that you are visiting?

You should exchange currency anytime from 60 days before your travel date to the last date of your travel”. It is always good to get your currency at least 2–3 days before the date of travel to avoid any last minute hassle.

How should you carry your foreign currency?

Here is what a frequent traveler and a longtime BookMyForex customer, Mr. Awdesh Singh of Gwalior says:

–Carry 10-20% of your money in cash.(Local Currency)

–If you are going to a developed country then you should carry the local currency. But if you are going to countries like Thailand or the Middle-East or any other country whose currency isn’t popular then you should carry USD and then convert it there.

–You should carry the remaining 80-90% in the form of a traveler card(Forex Card). So if it gets lost, you don’t lose all the money and it works in most places around the world

Every country varies in terms of transactions you can do in those respective countries, so you’ll have to do the thorough research before visiting that country so as not to face any uncertainties. We have done this hard work for you and here are some points that you must consider before buying foreign currency in India

Points to Consider before buying foreign currency in India:

1: Avoid Airport exchange counters, they offer the worst exchange rates. Leave it for emergencies.

2: We like deals and freebies offered by Banks on their Debit & Credit Cards. Credit cards are helpful in emergencies and are accepted almost everywhere. And if you spend a lot, you will accumulate points that you can redeem for gifts etc. But there are too many charges on credit & Debit cards.

There are basically three types of charges:

a. Foreign Currency Conversion Fee – 

The fee that Visa and Mastercard charge you because your card is Indian and your Card balance reflects in Indian Currency. So when you use it abroad, you pay it in the currency of the country you are in. The conversion happens from INR to that currency. And Visa and MasterCard automatically charge a 1-2% fee on foreign currency exchange and anything in excess of it is generally a small margin of profit for the bank.

b. Foreign Transaction Charge-  

Charge that your Debit/Credit card provider puts on you for carrying out a transaction in foreign currency. Your Debit/Credit card works only domestically. But when you go abroad and use the card to either shop or withdraw cash, your bank will charge you for that Foreign transaction which makes up for around 2.5 -3.5% figure of the total transaction amount.

c. Cash Advance/Withdrawal Fee – 

Withdrawing Cash using your Credit card comes with a charge called Cash Advance fee, irrespective of whether you used the card in India or Abroad. The fee, however, is higher when you use your card abroad. And when you withdraw money from ATMs abroad using your debit card, you will have to pay a withdrawal fee. This is the fee that your bank agrees to pay to the bank whose ATM you used to withdraw cash as they allowed the use of their ATMs. You can incur a 1-4% additional fee every time you carry out an overseas cash withdrawal.

3: If you have a close friend or relative living in the country that you are visiting, you can ask that person to give you the local currency whereas you can deposit equivalent amount in their bank account. This way it’s a win-win situation for both, as both the parties will get the best rate. There will be few charges but it is a better option than credit or debit card.

4: Check the RBI registration of the vendor that you’re buying foreign currency from. They may or may not be authorised to sell or buy foreign currency in India. Exchanging money from a Non- RBI authorised agent is a punishable offence and can put you in severe trouble even in future.

5: Currency rates change every 3 seconds, but vendors don’t make the changes. And that gives them the opportunity to charge you higher. Make sure to search the current price online in search engines and ask for EXACT rates that you see.

Here is how you can carry your money overseas:

It is easier Buying Foreign Currency in India, carrying your foreign currency overseas isn’t. Here is why?

Debit & Credit cards –

Each cash withdrawal you make will usually be subject to currency conversion fees, foreign ATM fees or other charges from your bank and/or the local bank that maintains the ATM. Your Debit or Credit cards don’t have the same level of pro

Cash 

It’s often a good idea to get some foreign currency before you leave home. So that you have cash on hand to pay for your immediate expenses — like buying a meal at the airport or taking a cab to your hotel. You typically won’t get a great conversion rate from your home bank, and you may also have to pay fees or commissions. If you’re travelling to a major international airport in a large city, which will likely have multiple ATMs and change counters, getting currency beforehand probably isn’t necessary.

Forex cards 

A forex card is a prepaid card you use to make payment when travelling abroad. You can also use it when you’re studying abroad. Prepaid Card, Travel Card, Travel Money Card, Prepaid Travel Money Card are just other names of a forex card. Since they are preloaded with foreign currency, you can access money in local currency abroad. Forex travel cards are also equipped with a built-in insurance mechanism. This helps travellers claim a secondary card in case the primary one is lost or stolen.

Our Recommendation for Buying Foreign Currency in India –

Buy a multicurrency Forex card from BookMyForex and load it with your destination country’s currency. Ensure that you choose an online vendor which will let you reload easily, in case you run out of Forex when abroad. You can carry 3000 USD or its equivalent per person per trip as cash. Carry some cash, for tips and other miscellaneous charges.

 

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