Hi.
I’ve an account with Interactive brokers and was looking to invest in US stocks. Which bank gives best conversion rates for Inward and Outward Remittance?
Check out Indus Forex - Indus Ind Bank, they offer the best rate for outward remittances. However, do talk to your main bank where you maintain your account and negotiate a rate from their treasury. Use the Indus Forex rates online as benchmark. You can also use XE app, which will let you know more or less the international rate in the market, but do not expect anyone to give you this as there are additional cost a bank will need to bear including their profit margin.
Disclaimer: These are my personal view, please do your own research on this.
PSU Banks give much better forex rates for inward and outward remittances. Take a look at the rate cards of different banks that is updated on every working day. Look under the TT BUY and TT SELL COLUMN. Out of all the banks in India and exchange providers like bookmyforex, Indian Overseas bank provides the best forex rates. Canara Bank is a close second.
Just type on google X Bank Forex card rates and look for the updated rate.
Some banks also charge some fees for receiving or sending funds which you can find on their terms and conditions page in the forex section.
https://instantforex.icicibank.com/instantforex/forms/MicroCardRateView.aspx
https://www.kotak.com/en/rates/forex-rates.html
https://www.idfcfirstbank.com/forex-rate
For TT BUY, a higher rate is better
For TT SELL, a lower rate is better.
One more thing, if your are an NRI Customer, then preferential rates may be available to you which will be slightly better. If you are transfering a large amount - More than USD 10,000 or equivalent, then most banks will offer a better rate than their default card rate if you talk to your RM.
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IMO, keeping both the speed and services of remittances, I find IDFC FIRST Bank very very good. They don’t charge a bomb like other banks and you don’t have to go through all the bureaucracy and tension like in the PSUs. Alternatively, you can also opt for ICICI Bank.
The default forex card rates for IDFC First Bank, ICICI Bank and Axis Bank are amongst the worst forex rates one can get. The card rates are attached in my above post. Can you elaborate why you feel these banks are preferable?
Canara Bank rates with regard to USD is seriously fine. Did not know PSU were offering such fine rates when compared to private banks.
Thanks for the info.
Hi @ron94
IDFC FIRST Bank sells USDINR for ₹85.15 whereas Canara Bank is selling USDINR for ₹83.9025, thereby putting IDFC FIRST Bank at a slight premium of just 1.48%
I regularly use Vested and therefore have first-hand experience on the remittances experience. Whenever I remit money via IDFC FIRST Bank or ICICI Bank, it hits my JP Morgan account within 2 hours without any currency slippage.
For other banks in context here, it takes a minimum of 4 working days plus their customer service and app is a nightmare.
All formalities can be done in IDFC FIRST Bank and ICICI Bank in the app itself and there’s no need to go to the branch, plus there’s obviously a cost associated with maintaining such excellent service standards and tech infrastructure which is just 1.48%.
Now, a client (retailer) who would even transfer ₹1 lakh will have to shell out ₹1480 extra for a same day service.
I find the opportunity costs to be higher versus saving a mere 1.48%. Obviously, if one is an HNI, then one automatically gets a better rate matching the market.
Besides, I have a lower tolerance for babu culture. I never used a PSU in my life and will never use unless the substandard service and work culture changes.
Hope it answers you question.
The rs 85.15 rate that you have referred to is for purchasing/selling cash or if you use your debit card in an international currency. For remittances, one has to look at the Telegraphic transfer (TT column). Now, today the USDINR is about 83.32.
Lets compare the best rate (IOB with idfc)
IOB TT SELL rate is 83.65 and IDFC TT SELL rate is 84.83.
Using IOB, one will lose 0.4% and using IDFC, one wil lose 2.2%.
When remitting the funds back you will lose about the same.
So, using IDFC sending and receiving one will lose approx 4% whereas using IOB one will lose approx 0.8%.
An FD gives 8% for a full year and here one is losing 2.2% at one go.
My point is that even though the absolute amount seems small to you, the percentage is what one should pay attention to and it is quite high.
Another example: If one invests in an average equity mutual fund in india the MER is about 0.8 to 1%.
So, taking this into perspective, losing 4% for a round trip transaction is quite large and a sunk cost.
So, when you start an investment in Vested, your return is already at a Negative 4%.
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@ron94 You have used a flawed analogy by comparing the premium to the actual USDINR rates. The actual USDINR rates are something which nobody will get.
The practical approach is to compare your bank’s rate to the lowest competitor.
Now say you want to buy XYZ at $10 a share today and with my banks you get the credit in 2 hours which means there’s a reasonable chance that your pricing would be somewhat near to $10.
But with banks with credit in 5 working days, the share could be anywhere. That’s an opportunity cost I wouldn’t bet on.
To each its own. Good luck.