How to Get the Best Exchange Rate and Lower Transaction Cost?
Do you want to know how to get the best exchange rate while transferring money and keeping the transaction cost low? Read this article to find out how you avoid incurring a high cost and get a decent exchange rate.
Sending money online to another country has become very easy and convenient these days. However, there is a cost involved with it. If you are not careful, then this cost can get quite high. Here are some ways to get the best exchange rate and lower your transaction cost.
- Monitor Exchange Rates
Since currencies are traded like any equity, exchange rates fluctuate in the open market. That makes it important to keep a close eye on exchange rates. Exchange rate monitoring is available through banks and online money transfer services. You may be given the option to lock in an exchange rate in exchange for a fee in some cases.
- Compare the Fee
The money transfer process is more than just about exchange rates. There are other expenses to consider. The transfer fee is calculated as a percentage of the amount of money transferred. The more money you give, the more fees you’ll have to pay. You will also be charged a currency exchange fee which is either a one-time fee or is dependent on the amount of money transferred.
- Limits of Transfers
You must consider the limit of transferring money before sending money to any country. An NRI’s ability to send money to India is unrestricted. The money sent, however, must be earned legally. In addition, the sender must pay the necessary taxes in the country where the money was earned.
- Time Limit
The time limit varies from one mode of transfer to another. With money transfer services, a quicker transaction means more fees will be charged. In the case of banks, there are two options.
- The net banking option transfers money in 1 or 2 working days.
- Transferring money through a third-party gateway sends the money on the same business day.
- Choose Between Different Money Transfer Services
Many companies and banks offer the service of sending money to India. But there are several factors you must consider before choosing a service.
- Commission Rates: Different money transfer services offer different exchange rates. If you opt for companies that specialize in money transfer services, then neither you nor the beneficiary needs a bank account. However, because of this, these companies charge a high commission than banks.
- Exchange Rate: The money transfer services don’t provide a competitive currency exchange rate as compared to banks. Therefore, you must compare the exchange rates of different services. The best way is to use an exchange rate calculator. All you need to do is enter the amount that you need to transfer, and the calculator will convert it into rupees according to the current exchange rate. The bank also provides a guaranteed exchange rate. This means that the bank confirms the exchange rate as soon as you initiate the transfer process. So, even if the exchange rate changes after you initiate the transaction, then your money will get converted according to the exchange rate shown to you initially.
With so many options to choose from, you can take help from the above points to select a money transfer service that provides the best exchange rate. If you do that, then sending money to India online will be a piece of cake for you.