What’s The Cheapest Way To Send Money From India To A Foreign Country?

India has two types of remittances when sending money abroad under the LRS - current account and capital account remittances. The current account includes education, travel, family maintenance, etc. The capital account includes investments or transfers to one's own bank accounts.

If you are sending money abroad for current account purposes, then you can either use digital remittance platforms or banks. Typically, digital platforms tend to be cheaper than banks. It is safer if these platforms are licensed as Authorized Dealer - II with the RBI. For capital account remittances, investment platforms like Vested that have partnerships with banks are often more cost-effective since they provide large volumes to banks and thus get better rates, as per Viram Shah, Founder & CEO, Vested Finance.

Digital remittance platforms have made sending money to other countries more cost-effective and transparent for Indian senders.

Siddharth Maurya, Founder & Managing Director of Vibhavangal Anukulakara Private Limited, says conventional banks, even if used to send money internationally, have very high forex markups, service charges, making them expensive options. Offering you a better exchange rate, lower transfer fee, and faster transfer are services that are authorised by the Reserve Bank of India (RBI) and bank-backed services.

They also offer live rate comparisons and transparent fee structures, which makes them an attractive option for use cases, such as, child's education fees, medical support, family support, etc.

Maximize Your Remittance Value: How to Cut Costs on International Transfers?

The most affordable way to send money from India abroad largely depends on factors like the purpose of the transfer, the recipient country, bank nostro charges, urgency, and the transfer amount. While traditional banks offer remittance services, they often charge higher transfer fees and offer less competitive exchange rates, says Mr. Pavan Kavad, Managing Director of Prithvi Exchange.

In comparison, authorized forex companies i.e AD II dealers are specialized in remittances and tend to be more economical vis-à-vis a bank. AD II's like us offer better exchange rates, lower transaction charges, and faster processing times and often operate with transparent pricing models and minimal hidden fees, making it ideal for cost-conscious individuals.

Online remittance services are especially attractive because we use mid-market exchange rates and charge flat or minimal service fees, ensuring that more of your money reaches the intended recipient, Pavan Kavad added.

Always compare the final amount the recipient gets, not just the transfer fee. Even a small difference in exchange rate can significantly affect large remittances.

"At Cashfree Payments, we're reimagining cross-border transactions by flipping the model entirely. With our PA-CB Imports license, we enable international merchants to collect payments from Indian customers through local, trusted methods like UPI, Netbanking, and RuPay cards. Instead of sending money out, Indian customers pay locally, and merchants receive funds in their preferred currency, with zero FX markup. It's a model that's not just more efficient; it's more inclusive and future-ready. By removing hidden costs and improving checkout experiences, we're helping bridge global commerce with local access, making cross-border payments feel as seamless as domestic ones," commented Reeju Datta, Co-Founder, Cashfree Payments.

4 Cheapest Ways To Send Money From India To A Foreign Country

Although a swift transfer would be the ideal option, both time efficiency and the cost of money transfers from India play an equally important role. It is just as critical to look for the cheapest channel when paying college fees, sending money to support dependents, or keeping a business going. This information will alert you to better choices as guided by CA Manish Mishra, Founder, GenZCFO.

1. Financial Transfer Services Online

Compared to traditional banks, fintech services such as Wise (previously TransferWise), Revolut, Remitly, and Xoom (by PayPal) frequently provide better exchange rates and reduced fees.

These services are renowned for being transparent, outlining the precise cost and the amount the client would get. One of the most affordable and dependable choices is Wise, which specifically uses the mid-market exchange rate and charges a small fee.

2. Forex Startups & Services

You can send money overseas at cheap exchange rates and minimal fees with specialized forex sites like BookMyForex and Instarem. These platforms can frequently conduct transfers more quickly than banks and are approved by the RBI.

3. SWIFT (International Bank Transfers)

SWIFT is a way for banks like SBI, HDFC, ICICI, and Axis to send money abroad, but it can be expensive because of hefty fees, bad exchange rates, and extra bank charges for the middleman. It is not the least expensive, but it is safer.

4. Limited Use UPI for NRIs

Even while UPI International is growing, its reach is still restricted to NRIs and retail payments. Large remittances are not yet appropriate for it.

Important Tip: Never compare fees alone; always compare entire prices. You would have to pay extra for a platform with no fees but a bad exchange rate. Online transfer services like Wise are the quickest and least expensive way for most customers to move money from India. By the Liberalized Remittance Scheme (LRS), always confirm that the provider has RBI authorization, says CA Manish Mishra.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor GoodReturns. The author, nor the brokerage firm nor GoodReturns would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.