There are around 1.5 million people of Indian origin living in the UK. And, for many, sending money back to India is a regular occurence – whether that’s to cover bills at a property, support relatives, or pay for travel plans.
But how do you go about sending money from the UK to India? There are three main options available:
- International money transfers (via an online broker)
- International bank transfers (from your bank account)
- Paypal payments (using Xoom)
The right one for you will depend on how quickly you need the money to arrive, how much you are sending, and whether the recipient has a bank account. The different services also vary in costs. Here’s what you need to know to make the right choice.
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International money transfers
It’s quick and easy to send money to India via an online international money transfer service. And in most cases, your money will arrive within three working days.
Sending money this way can be cheaper and more flexible than using your bank. For example, if you are making regular transfers, you might be able to arrange a ‘forward contract’ which guarantees a certain exchange rate for a set period.
However, as with traditional bank transfers, these services require the recipient to have their own bank account.
To keep your money safe, you should also choose a company that is regulated by the Financial Conduct Authority (FCA). These include Wise, Revolut, XE money transfer, Skrill, and Remitly.
How long does it take?
Usually a maximum of between one and three working days – but some transfers of this kind go through in a matter of minutes. You may be able to pay more to ensure a speedier service.
How much does it cost?
Fees and charges vary: Revolut charges 0.3% (maximum £5), plus an extra “fair usage” fee if you transfer more than £1,000 a month – making it a sensible choice for smaller amounts; XE money transfer offers fee-free transfers on larger amounts.
Charges are not the only thing to check, however. The exchange rate you receive also makes a big difference, especially if you’re sending a large sum. Make sure you’re getting a competitive deal.
What else do I need to know?
To open an account with a money transfer service, you will need to provide proof of identity in the same name as your UK bank account.
You may also have to pass further checks to send large amounts of money, say more than £10,000.
Many online brokers set limits on the minimum and maximum amounts you can send to India, so it may be worth signing up with more than one to get the best deal on both large and small transfers.
International transfer through your bank
Inter-bank transfers are generally more expensive and slower than transfers arranged via an online service. However, they can be a good option if:
- The amount you need to send does not meet the minimum required by online brokers
- Your bank has links with a bank in India – ICICI Bank UK, for example, offers transfers of up to £25,000 a day at competitive rates
If you are sending large amounts, this route means you will benefit from the Financial Services Compensation Scheme (FSCS), which protects the first £85,000 of your funds and is only available via FCA-regulated banks.
How long does it take?
While some banks offer same-day transfers, bank transfers to India more typically take several working days.
How much does it cost?
Big banks often charge high fees on international transfers. Barclays charges £25 for a transfer arranged in branch or by phone. The exchange rates available are also generally lower than those on offer from online brokers.
A quick check at the time of writing for example, showed that Barclays’ customers are being offered an exchange rate of £1 to 95.69 Indian Rupees (INR). But with Wise, £1 buys you 95.80 INR.
What else do I need to know?
In some cases, international bank transfers can also involve Overseas Delivery Charges imposed by the recipient bank.
However, while you could lose any money held by a transfer company if it goes bust at the time, bank deposits of up to £85,000 per customer are protected by the FSCS should the same thing happen.
Paypal (Xoom) payments
You can use the Paypal service Xoom to send money to connections in India, whether or not they have a Paypal account.
This means of sending money can be particularly useful if the recipient does not have a bank account in India, as the money sent can be picked up in cash from one of thousands of locations throughout the country.
How long does it take?
Bank account payments should usually arrive within two hours. Cash payments can generally be picked up within minutes of the transaction going through.
How much does it cost?
Xoom’s fees are £1.99 for a bank transfer and £3.99 if you choose the ‘cash pick up’ option.
Its foreign exchange rates are competitive, but the service rounds all transactions to the nearest rupee – in its favour of course.
What else do I need to know?
Xoom payments can be made via Paypal, through a bank transfer, or with a debit or credit card.
You’ll need to set up an account to arrange a transfer and to provide information about the recipient, such as his or her address and phone number for a cash pickup.
Paypal has a Money-back guarantee that promises to refund your transaction in full if the money is not received.
