Need to Send Money to India? Avoid Mistakes & Get the Best Deal!

Sending money to India has become easier with the rise of digital banking and international remittance services. However, many people still struggle with high fees, poor exchange rates, and hidden charges when transferring funds. Choosing the right service and avoiding common mistakes can help maximize the amount received by your family, friends, or business partners.

This guide covers the best ways to send money to India, mistakes to avoid, and tips to get the best exchange rates.

Why Sending Money to India Needs Careful Planning

Transferring money internationally involves various factors that affect the final amount received. Many people overpay in fees or lose money due to bad exchange rates. Understanding the process can help you save money and time.

Factors Affecting International Transfers

Exchange Rates – The difference between the actual market rate and the rate offered by banks or transfer services affects how much money the recipient gets.
Transfer Fees – Some providers charge fixed fees, while others take a percentage of the amount transferred.
Transfer Speed – Some services process payments instantly, while others take 2-5 business days.
Regulations & Limits – Countries have different policies on international money transfers, including tax implications and reporting requirements.
Hidden Charges – Some banks charge intermediary bank fees, reducing the final amount received.

Common Mistakes to Avoid When You Send Money to India

Many people lose money or face delays due to common mistakes when transferring funds. Avoid these errors to ensure a smooth and cost-effective transfer.

1. Not Checking the Exchange Rate Before Sending

Some services mark up the exchange rate, which means you get less money in India.
Always compare rates using XE.com, Google Exchange Rate, or Wise Rate Checker.

2. Using a Bank Without Comparing Alternatives

Banks often charge higher fees and offer lower exchange rates.
Many online remittance services provide better deals.

3. Ignoring Hidden Transfer Fees

Some services advertise “zero fees” but include hidden charges in the exchange rate.
Read the full cost breakdown before sending money.

4. Choosing a Slow Transfer Method for Urgent Payments

Bank wire transfers take longer compared to online transfers.
Services like Remitly, Xoom, or Wise process payments within hours.

5. Sending Small Amounts Frequently Instead of Bulk Transfers

Most services charge a fixed fee per transfer.
Sending a larger amount at once helps save on fees.

6. Ignoring Government Regulations & Limits

Some transfers require declaration or tax filing if they exceed a certain amount.
Always check RBI and IRS guidelines before transferring large sums.

Best Ways to Send Money to India

Several methods allow people to transfer money internationally. Each has its own advantages and fees.

1. Online Money Transfer Services

Online remittance services provide faster, cheaper, and more transparent transactions compared to traditional banks.

Best Services to Use:

Wise (formerly TransferWise) – Offers real exchange rates with transparent fees.
Remitly – Provides fast transfers with competitive pricing.
Joinabound – Best for secure and cost-effective transfers.
Xoom (by PayPal) – Instant transfers but higher fees.

Pros:

Lower fees than banks.
Transfers are processed within minutes or hours.
Easy to use via mobile apps.

Cons:

Some services have daily limits on transfer amounts.
Not all services support cash pickups in India.

2. Bank Wire Transfers

Wire transfers remain a secure method but often come with higher fees and longer processing times.

Best Banks for International Transfers:

Chase Bank
Citibank
Bank of America
Wells Fargo

Pros:

Ideal for large transactions.
Highly secure and regulated.

Cons:

Higher fees (up to $50 per transfer).
Slower processing (2-5 business days).

3. ACH Transfers (Automated Clearing House)

ACH transfers allow direct bank-to-bank transactions at lower costs than wire transfers.

Pros:

Lower transaction fees than wire transfers.
Works well for scheduled or recurring payments.

Cons:

Slower than some online transfer services.
Requires both sender and recipient to have bank accounts.

4. Money Transfer Apps (Best for Cash Pickups)

Some people prefer services that allow recipients to collect cash in India.

Best Options:

Western Union
MoneyGram
Xoom

Pros:

Recipients don’t need a bank account.
Transfers are instant or take a few hours.

Cons:

Higher fees than bank and online transfers.

5. Cryptocurrency Transfers (Alternative Method)

Some people send money using Bitcoin, USDT, or other digital currencies.

Pros:

Lower fees compared to traditional banking.
Fast transactions across borders.

Cons:

Not legally regulated in India.
Requires recipients to have a crypto wallet and exchange account.

How to Get the Best Deal When Sending Money to India

To maximize the amount received, follow these best practices:

Compare exchange rates across different providers before transferring.
Send money in bulk instead of multiple small transactions to reduce fees.
Avoid weekends and holidays, as exchange rates fluctuate.
Use a provider that offers real-time tracking to monitor your transfer.

Understanding the Legal Aspects of Sending Money to India

Regulations in the USA

Transfers over $10,000 are reported to the IRS.
Large amounts may require proof of income or source declaration.

Regulations in India

No limit on inward remittances, but amounts above ₹10 lakh INR may require tax filing.
Tax-free remittances apply only for personal use, not for investments.

Comparison Table: Best Money Transfer Methods

Method	Transfer Speed	Fees	Best For
Wise (TransferWise)	Same Day – 24H	Low	Small/medium transfers
Western Union	Minutes – 1 Day	Medium	Cash pickups
Bank Wire Transfer	2-5 Days	High	Large transfers
Remitly	Few Hours – 1 Day	Low	Recurring transfers

Conclusion

Finding the best way to send money to India depends on your needs. Online money transfer services provide the best exchange rates and lowest fees, while bank transfers work better for large transactions.

Avoid mistakes like not checking exchange rates, ignoring hidden fees, and using slow transfer methods. By comparing providers and choosing the right service, you can save money and ensure a hassle-free transfer.