How to transfer money from the United Kingdom (UK) to India 

The Indian population in the United Kingdom stands strong at 1.8 million. In 2023 alone, 253,000 Indians migrated to the UK. Most of them are promising students and skilled professionals. Better job opportunities, higher living standards, and government policies supporting entrepreneurship attract immigrants. 

For India, the upside is these immigrants in the UK send money to their homes in India. Primarily, this foreign money supports family livelihood. Other means of spending money could be funding entrepreneurial ventures in India or investing in the stock market. The foreign funds flowing to the nation nevertheless contribute significantly to the nation’s GDP. 

There are several methods available for sending money from the UK to India, but two primary options stand out:

• Using an Online Money Transfer Service (also known as International Money Transfer or IMT)
• International Bank Transfer
• Foreign Currency Cheques

Various factors like the speed of the transfer, the amount you have to send, and whether the recipient possesses a bank account should be considered. Also, you must compare the fees various channels charge for their transfer service. 

International Money Transfers 

International money transfer (IMT) services have multiple advantages over traditional methods like international cheques or bank transfers. Those are: 

Faster transfer speeds: International money transfer services often deliver funds within minutes or hours, especially for smaller amounts. Bank transfers usually take 5 to 6 days or more. IMT is ideal for emergency fund transfer needs. 

Competitive exchange rates: Most money transfer services offer competitive exchange rates than banks. This in turn helps save you money on the conversion.

Convenience & accessibility: You can do transfers online or through mobile apps anytime, from anywhere. All you require is an internet connection. Also, this saves time and the need to visit any bank branch in person.

Transparency and security: Most money transfer services are regulated and use secure technologies to protect financial information and transactions.

Fees involved: Online money transfer service providers usually levy a flat fee ranging from 100 to 500 INR plus an additional charge of 0 to 2% of the total amount transferred. This can vary depending on the service provider. 

Additional benefits: Some services provide promotional rates, fee waivers, loyalty programs, and currency hedging to improve your experience.

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Here are some potential drawbacks to consider:

Hidden Fees: While exchange rates might be favorable, money transfer services often levy hidden charges. Compare fees between different options before making a decision.

Transfer limits: Some services fix limits on the amount you can send per transaction. Ensure the service aligns with your transfer needs.

Restricted customer support: While most services offer online support, connecting with a live representative may not be your first option, especially for complex issues. 

Some of the most common IMT service providers that let you send money from the UK to India include Wise, Remitly, XE, MoneyGram,  OFX, and Western Union, to list a few. 

International Bank Transfer

Sending money through banks from the UK to India is also a viable option. Let’s go through this mode’s advantages and disadvantages. 

Advantages

Security: Banks adhere to strict regulations and leverage robust security measures making it the most secure option to send money internationally.

Transparency: Banks generally clearly outline all changes associated with the transfer beforehand, allowing for better budgeting.

Potential for larger transfers: Banks usually have higher transfer limits compared to some money transfer services, making them suitable for larger amounts.

Familiarity and trust: If you already have a banking relationship in the UK, using their international transfer service might feel more familiar and convenient.

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Disadvantages

Slower transfer speeds: Bank transfers can take several business days to complete, which might not be ideal for urgent needs.

Less competitive rates: Banks frequently offer less competitive exchange rates than online transfer services, potentially leading to higher overall transfer costs.

Higher fees: Bank transfer fees can be higher and this is a red flag for transferring small amounts.

Limited flexibility: Delivery options might be limited to direct bank deposits, and do not entertain mobile wallet options offered by some IMTs.

Foreign Currency Cheques

Here’s how a foreign currency cheque works:

1. Receive the cheque: You get a cheque denominated in the respective foreign currency.
2. Deposit at your bank: You deposit it at your local bank’s branch.
3. Conversion and credit: The foreign bank verifies the cheque and converts the amount to your local currency based on the exchange rate. They then credit your account with the converted amount.

There are fees and processing times involved, which can vary depending on the bank and currencies.

What are the prerequisites for international money transfer?

• Receiver’s full name and address
• Receiver’s bank account number and account type
• Receiver’s bank’s SWIFT or BIC code (if required)
• Reason for the transfer

Purpose of Money Transfer 

Foreign remittances to India are permitted for specific purposes, including:

• Medical Treatment: Sending money to cover medical expenses
• Education: Funding educational fees and related costs
• Travel Expenses: Covering costs related to travel
• Investments: Investing in properties, stocks, or other financial assets
• Financial Support: Providing financial assistance to family or friends
• Donations: Contributing to charitable or non-profit organizations
• Living Expenses: Supporting day-to-day living costs
• Gifts: Sending money as a gift to individuals

Inward Remittance Limit

The Rupee Drawing Arrangement (RDA) and the Money Transfer Service Scheme (MTSS) by RBI serve as primary frameworks for inward remittances in India. The RDA allows unlimited personal remittances and doesn’t have any cap. However, a maximum threshold of INR 15 Lakhs is set for commercial purposes.

Conclusion

In conclusion, selecting the right method for you to send money from the UK to India depends on assessing key factors such as transfer amount, urgency, service cost, recipient preferences, and convenience. A thoughtful comparison of these elements will guide you in choosing the most efficient and economical option that works for you.

If you’re in need of making an outward remittance, consider selecting moneyHOP as your online money transfer partner. Our platform offers near-zero forex markups, a 100% digital transaction process, and round-the-clock customer service, positioning us as your premier choice.