How to reduce charges on International Money Transfers

The number of students planning to Study Abroad has been increasing exponentially in the last few years. Many Indian parents and students see Study Abroad as the only option to brighten their future and earn a handsome salary after their studies. Studying Abroad is costly, but still, you can save a lot with the right platform.

As foreign education includes the transfer of payment in foreign currencies for multiple reasons, such as Tuition fees etc., the student should be aware of the charges involved in International Remittance to minimize the costs of Study Abroad. If you do things with full caution, you can save almost Rs 15K to Rs 20K. Hence choosing the right payment partner is essential for cost and time-effective transfers. You will need a reliable platform such as Abroad Cube to remit your money throughout your stay in a foreign country. 

Main reasons for sending money abroad for Students

1. University/College Fees - This is a significant reason compared to other reasons for most students. They have to pay institution tuition fees on a semester or yearly basis. Hence, students prefer to remit money from India in multiple instalments. 
2. Living Expenses - Students or parents usually regularly transfer Living Expenses from India to a foreign country. Students use these funds to pay for their accommodation, food, transport and other related things. 
3. GIC Account - For students travelling to Canada, having a GIC account is a requirement for an SDS stream Study Visa. They must transfer a minimum of CAD 10,000 and a bank's service charge of around CAD 150 to open a GIC account. It must be sent from the student's or parent's Bank account. 
4. Blocked Account - For students travelling to Germany, they have to open up a blocked account and transfer a minimum of €11,208 plus a service fee to get the 06 Confirmation required for the Study Visa application as proof of funds. 

Charges associated with Foreign Remittance

1. Exchange Rates - It is a significant factor in foreign remittance as it varies broadly between banks and dealers. It can be checked at Google in real-time, but expect it to be different for Banks and Dealers. Foreign transactions happen at Inter-Bank Exchange rates slightly higher than Google's displayed price. Out of all, dealers such as Abroad Cube are known for their best exchange rate, especially for students. Being a startup, their margins are low compared to well-established banks.  
2. Service Fees - It is the fees charged by Banks and Dealers to process international remittances and their formalities. In the case of Banks, they might charge you anything between Rs 500 and Rs 2000. The dealers usually have fewer service fees, that range between Rs 250 and Rs 1000. There might be cases where the dealer offers you Zero Service Fee, which is hidden and adjusted in the exchange rate. 
3. Nostro Charges - The receiving bank deducts these charges between US$ 15 - US$30 as a service fee from the remitted amount. To avoid any loss in the amount sent, the dealer sends some extra amount ranging between Rs 1000 to Rs 1500 to the bank to deduct. These charges are fixed across Banking Systems and the type of Currency. If Nostro charges are included in the quotation, you do not have to worry about less amount received. Some dealers do not include this amount in the quotation to keep the quoted value lower and let the foreign bank deduct it from the sent amount. These practices may lead the university or bank to receive less than what was sent. Hence, it might create a problem. It is advisable to ask the dealer to include this charge in the quotation.  
4. GST is the tax charged on the exchange rates, and all remittance providers usually have almost the same values. It is a non-refundable charge. 
5. TCS - While transferring money overseas, a tax of 5% needs to be deducted by the bank or dealer if the total remittance amount exceeds Rs 7 Lakh in a financial year. For example, if a student is remitting Rs 8 Lakh, the TCS will be calculated over the amount above Rs 7 Lakh. In this case, it will be calculated only on Rs 1 Lakh. A tax of only 0.5% will get deducted, providing the source of funds is an Education Loan. You can easily claim your TCS amount while filing annual Income Tax returns. 

Tips for International Money Transfer for Students

1. Choose the Trusted Exchanger - In India's methodology, people mainly trust banks regarding money. But their exchange rates and service fees might be horrible compared to registered and RBI-licensed dealers. Their money transfer process is also quite long and full of waiting. Today's technology helps change the traditional money transfer system with cost-effective and time-effective solutions with a completely digital process. With the use of such technologies, platforms like Abroad Cube saved lakhs of students savings. 
2. Get Quotes from multiple places - Getting quotes from multiple banks and platforms helps you compare their exchange rates and service charges. But that might be tedious and cumbersome to visit each bank and ask for rates. The platforms such as Abroad Cube help you get quotes from multiple banks/exchangers and provide you with the best exchange rate and zero processing charges.
3. Simple Online Process - Today's technology harnesses the world's financial systems, and wire transfer nowadays is also a part. Many platforms, such as Abroad Cube, use the latest technology to make the wire transfer from your place of comfort. Due to technology, the processes such as getting a quote, transferring payment to Bank Account, submitting documentation and signing documents have become digital, reliable and fast. They are helping students wire transfer their payments on the same day as well, hence lowering the processing times. On the other side, even modern banks have a fully offline process, where all processes, such as payment transfer and document submission, are done in a branch. Sometimes, bank employees force students to open a bank account for personal targets. 
4. Keep a check on Exchange Rates and Service Fees - Some dealers give the best exchange rate but have higher service fees, and some have zero service fees but higher exchange rates. To save from both, you should try dealer aggregators like Abroad Cube because of their fully transparent system, and you can easily track down the exchange rate and service fees. So far, they have the best exchange rate and lowest service fees. 

When to use Credit/Debit Card over Wire Transfer

If you are applying to an institution that requires an Application Fee or applying for a visa, you have to pay the fees. In these scenarios, paying using your Credit or Debit Card is recommended because the payment needs to be received by the concerned institution instantly for faster processing. Of course, these cards charge higher markup fees, but the amount is relatively small, so it does not matter much. If application fees are refundable, receiving them in bank cards is easier. Suppose you are paying the University/College fees, transferring the amount for living expenses, or using a GIC or blocked account. In that case, consider making the transaction using Wire Transfer. Because the amount is high, the markup fees charged may hole in your pocket.