4 Online Money Transfer Tips for NRIs
Keep the following in mind when transferring money online to India
What is money transfer? Money transfer generally refers to moving money from one specified bank account to another. Money transfer has become more convenient as now it can be done electronically.
What is electronic money transfer? Electronic money transfer is a mode of transaction involving a computerised network.
NRIs often have to send money to India. Here are some online money transfer tips for NRIs.
1. Track exchange rates: Exchange rates tend to fluctuate regularly. They can increase or decrease in a short period. It is thus vital to track exchange rates closely. Banks and online money transfer services give you an option to monitor exchange rates. You can track exchange rates over a certain time or can opt for alerts in your inbox. In some cases, you get the option to lock an exchange rate in exchange for a small fee.
2. Understand the fees: Exchange rates are only one aspect of the transfer. Costs are also involved. The fee is a percentage of the amount being transferred. The higher the amount you send, the more fees you pay. There is also a currency conversion cost. It is charged as a flat fee or a percentage of the amount.
3. Compare multiple providers: There are several ways to send money to India online. One is through telegraphic wire transfer from your local bank to the beneficiary’s bank in India. The other is to use a third-party money transfer method. What are money transfer services? These are electronic payment systems through which you can transfer money. Most banks offer third-party money transfer services. You can opt for one of the several online money transfer services. Compare the exchange rates and fees before making a decision. There are comparison websites which make it easy. You can feed the amount you want to send and see the actual amount the recipient will receive. The sum that will be received includes the exchange rates and fees.
4. Know the limits on transfers: While sending money to any country, one needs to be aware of remittance limits. There is no tab on the amount of money an NRI can send to India. However, the money being sent must be earned legally. Also, the sender needs to pay required taxes in the country where it has been earned. While sending money from the United States, there is a limit of USD $14,000 per person per year. Beyond this amount, you have to pay a gift tax in the United States.
There is another aspect of taxation. If you are transferring money to close relatives, it is tax-free. There are tax implications if someone is sending money to someone not related. Any amount over Rs 50,000 will be taxed as your income.
If you can stick to the pointers mentioned above, transferring money will be a cakewalk for you. Need to transfer money online? Click here to get started.
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