Monday, April 11, 2016

Holiday in Europe or MBA in US? Just get the best forex deal

BENGALURU: The holiday season is here and you are probably being bombarded with discounts and offers on tour packages and flight tickets. While you surf the net for the best deals, do not forget to lock in the best forex rates too. The rupee has been on a decline and even small gyrations can make a big impact on your vacation budget.

These differences in rates and charges can be even more important if you are going for the long-haul: studying abroad for example. The fall session at overseas colleges and universities will start soon and parents grappling with high tuition fees and living expenses now have to worry about the depreciating currency too. The only way to save your upcoming vacation or your college budget is to book your rates in advance.

Banks know this and have been launching innovative solutions to tap the potenti al. Axis Bank[2] recently opened its online forex booking services to non-Axis bank account holders too. For all other banks you need you have an account with them and payments can be made online only using netbanking accounts.

Axis Bank is the first to launch an outward remittances website too, http:www.axisforexonline.com, where you don't have to be the bank's customer. And it can be used to remit money to any bank account globally . Apart from outward remittance, the website allows you to order multicurrency forex cards and cash in 100-plus foreign currency, another first.

But you don't choose a forex service simply on convenience. The exchange rates[3] vary from bank to bank and in the case of forex cards, the fees and charges will be different too. For instance, HDFC Bank Multicurrency Platinum ForexPlus Chip card charges an issuance fee of Rs 500 a card while Axis charges Rs 150. On the other hand, the card reload fee for an Axis Bank card is Rs 100 and cross-currency charge is 3.5%. HDFC Bank charges a lower reload fee and cross-currency charge of Rs 75 and 3%.

Heretoo, online aggregators such as Bookmyforex.com and Fxkart.com can come to your rescue. Not only do they offer comparison across banks but they get you a wholesale exchange rate that is lower than what is being offered by a bank or the currency exchange.

THE RIGHT RATE.. .

Think of these aggregator sites as the travel portals that get you bulk discounts on flights, hotels and holidays. They not only offer discounted rates but bring transparency to an otherwise opaque and fragmented currency exchange market. A marketplace for retail forex and overseas remittances has tie-ups with banks and exchange companies to whom offers channel partners very large number of orders. These channel partners in turn quote wholesale volume rates. "The dashboard then automatically compares and displays these competitive rates along with service quality metrics across hundreds of banks and exchange companies," says Sudarshan Motwani, CEO, Bookmyforex.com.

A difference of even Rs 1 per dollar can translate to savings[4] in lakh, especially for bigger amounts like tuition fee and living expenses. For example, while ICICI Bank[5] quoted a rate of Rs 78.29 for euro, the marketplace was offering a rate Rs 76.07. That's a difference of Rs 2,336 for 1,000 euro. If the college fee for a semester is 8,000 euro, it could imply a difference of Rs 18,687.

...AND THE RIGHT MIX:

You may have got the right deal but you need to understand how to use different forex services optimally to get the best one. Choosing a foreign currency draft in place of a wire transfer when a student is still in India can save you $15 to $50 for a mid -size remittance (say, the college fee), as you won't have to pay intermediary bank charges.

You have currency notes, a forex card and wire transfers and demand drafts to choose from. The generic advice is carry little, or, whatever is the minimum requirement in cash, as they are the costliest. If you are a holidayer depend mostly of the forex card. Get a multi-currency card if you are planning to visit more than one country.

[1]

References

  1. ^ holiday (economictimes.indiatimes.com)
  2. ^ Axis Bank (economictimes.indiatimes.com)
  3. ^ exchange rates (economictimes.indiatimes.com)
  4. ^ savings (economictimes.indiatimes.com)
  5. ^ ICICI Bank (economictimes.indiatimes.com)

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