What is a money transfer?
Money transfer is a process of transferring money electronically from one bank account to another, either within the same financial institution or among different financial institutions.
It is especially the cashless mode of payment or the payment systems. These payment systems include:
- Electronic fund transfer
- Wire transfer
Electronic fund transfer is the process of transferring money electronically within different bank accounts.
It is a fund transfer that is initiated through an electronic terminal, telephone, a computer or even a magnetic tape for ordering, instructing, or authorizing the financial institution to a debit or credit for a customer’s account.
Money transfer to India
Money transfer to India means the transfer of money from a foreign bank account to a domestic bank account.
The amount of money transferred into the country is liable to be taxed under the Income Tax Act depending on the purpose why the money is being transferred to India.
There are many ways in which you can transfer your money into India.
The best ways to transfer your money to India include:
- ACH transfer
- Money orders
- Wire transfer
- Western Union
- Personal Checks
- Email money
- NRI-NRE account
What to consider before making a money transfer to India?
Before choosing the method in which you wish to transfer your money to India, the factors you need to consider are:
Speed of money transfer
Check out the speed at which your money can be transferred to India. Choose the fastest method to ensure that there is no delay for your money requirement in India.
Exchange rate of money transfer
The exchange rate on the day of transfer is to be considered before transferring the money. Not all currencies hold the same value of money.
It is your responsibility to ensure that you are getting the best exchange rate possible.
Fees for the money transfer
Sending money through a card will need to be charged with additional fees. You must ensure that you are not paying more than the required amount of fees.
The convenience of money transfer
Ensure that you choose a transfer method that is convenient in all terms. It is best to avoid the process of going to the bank, creating a bank account, and other approvals which act as a major inconvenience.
Who can make the money transfer?
Any person who wishes to transfer the money can do it in the way it is preferable, it includes NRI sending money to anyone in India directly using their bank account abroad to the recipient’s bank account in India.
Just a good interest connection and the use of local banking services are enough to make an online transfer of money.
What is required for the Money Transfer?
To transfer money online you just need the bank details of the recipient that includes:
- Bank name of the recipient
- Branch name
- IFSC code of the bank branch
- Account number of the recipient
Types of money transfer
Making an online transfer of money is the easiest way through which you can send money irrespective of the geographical location.
The main requirements in an online transfer are a good internet connection and the use of local banking services to transfer your money to an account in India.
The information you need to make this transfer are the name and address of the account of the recipient, information related to the financial institution for which the money is sent and also the IBAN or SWIFT code of the recipient bank account.
Wire transfer is the most commonly used method to make the international money transfer where the sender needs to go to an institution like a financial institution like Western Union, Xoom, Remit2India to send the money.
The wire transfer gives a facility to gather the information from the sender about the recipient and recipient’s bank or any other facility where the money needs to be sent.
PayPal is a method of transferring money that allows the individual to transfer money electronically from one account to the other.
A particular amount of fee is to be charged to the recipient through the transaction is free for the sender of the money.
Along with the exchange rate of transfer of the money, the fee to be charged is 3.9% per transaction for international transfers.
International Money Order
International Money orders are a payment method that is safe, cheap and the fastest way of sending money especially to remote places in India.
The money orders can be deposited directly into your bank account or cashed at any of the cheque cashing locations.
There is another option to send a cheque in a foreign currency. You can cash the cheque which can be delayed because of the verification of the deposit amount.
The recipient needs to pay an additional fee for the exchange rate and the encashment process.
This method is considered safer than just sending cash through the mail because you can choose to cancel a cheque if it fails to arrive at its destination.
E-mail Money Transfer
A money transfer through e-mail money transfer is an online method of transferring money.
There will not be any extra charges that are included in this type of transferring money. It is just like a bank to bank transfer of money but here the sender need not have any information of the receiver’s bank account.
It just involves the sender logging into his bank website and filling out a form.
Bank Drafts and Cashier’s Cheques.
Bank drafts and the Cashier’s cheques are available at any bank. There will be a fee charged for these services and it might take some time to cash the cheques in India.
The cost to purchase a bank draft is much higher than the cost of a money order.
Is there any maximum limit for money transfer to India?
Previously, the maximum limit for transferring the money is an amount of Rs. 2 lakhs. But now, RBI has increased the transaction limit to Rs. 5 lakhs.