Updated: Jul 4
Moving to a new country for education can be an exciting yet challenging experience, especially when it comes to managing your finances. In this blog, we will explore some convenient and cost-effective options for money transfers and banking services specifically tailored to Indian students moving to the USA. These services aim to simplify the process and provide valuable benefits for international students.
Mainly international students need money transfers for paying tuition fees and for miscellaneous expenses.
For paying tuition fees you can use one of the following methods:
Many universities (including GeorgiaTech) has fees payment gateway through Flywire for international students. Which charges a little higher forex conversion rate. On your payment portal you would directly see the payment amount you need to pay in INR. You can use Net Banking, Credit/Debit Card for paying the amount in INR. For Debit and Credit card there is usually 2-3% extra payment gateway charges. So online bank transfer using net banking is the best option.
Here is the snapshot of amount in INR charged by flywire for transferring 10000 USD on June 24, 2023. With prevaling USDINR rate being 81.907.
There's also an option to pay in other currency if you choose to pay in USD. In that case, Flywire charges 25$ Flat fee and you can get your Indian bank to pay in USD and probably get a favorable FX conversion rate.
Easy Transfer is a start up from USC which simplifies tuition fees payment for international students with minimal charges. Out of all the options we tried Easy Transfer is the cheapest. And on the contrary to SWIFT, you can track your payment on Easy Transfer.
In addition to the charges shown above there would be additional TCS charged based on the amount of Foreign Remittance you have declared and the TCS bracket you fall under based on that. And there would be about 800 Rs. GST charges for the forex conversion. However there are no service charges.
Through Easy Transfer you can only pay to your institution and can not transfer to your personal account at the moment.
SWIFT Transfer is the traditional way to do international money transfer. Transaction time for the same is 5-6 days usually. And there is usually no way to track the transfer. The conversion rate at which you can avail this facility keeps changing and it depends on the bank you are using for SWIFT Transfer. They usually charge some fixed fees and a little higher conversion rate. But at times you can also get a better conversion rate from bank. The only way to know it is to visit the bank in person and get the quote for the conversion rate. If you have taken loan from HDFC Credila or other banks, they would usually use this payment method for money transfer to USA.
You can transfer money to any US Bank account through SWIFT. Below is the snapshot of charges for 16598.79$ SWIFT transfer through Bank of Baroda on Aug 30, 2022. Prevalent Visa USDINR conversion rate was 80.1399, but my friend got favorable transfer rate of 79.9. Which was a really good and affordable deal.
Wise (earlier known as TransferWise) is a popular platform for foreign funds transfer. It charges additional fees and sometimes offer favorable conversion rate. Its faster than SWIFT transfer. And you can transfer money to any US Account through Wise. At the same time on June 24, 2023.
Below is the snapshot of Visa Exchange Rate at the same time on June 24, 2023. If you were to use 0 Forex Card, this is the conversion rate that would be applicable if your card is on Visa network.
Western Union and MoneyGram
While Western Union and MoneyGram are commonly used wire transfer services, they tend to be costlier compared to the aforementioned options.
Money Transfer for everyday expenses:
For transferring money to USA for everyday expenses, either you can opt for a Forex Card or use SWIFT/Wise/Flywire methods above to transfer money to a US Bank account.
Forex cards, such as those offered by BookMyForex, can be loaded with money for use in the USA. However, withdrawing and transferring funds from these cards to your bank account can be challenging and may incur additional fees. Different banks have varying processes, and limitations on daily transfer amounts can make the process slow and tedious.
One of my friend had to withdraw money from ATM while being charged for ATM Withdrawal and then deposit the cash in his account. With daily transfer limit (~1000$) it is a slow and tedious process. He had a Bank of America account and BookMyForex Forex card.
With chase money transfer to bank from forex card was a smooth process. You could swipe your card once a day with the maximum amount I tried being close to 10000$ and it would instantly reflect in your bank account. I used Niyo Global Card last year, for which I was being charged 0 Forex Markup so it turned out to be the cheapest way to money transfer and pay fees in the USA. Best part, they didn't had the amount of foreign currency transfer tracking tech in place because of which I wasn't even charged TCS (5% usually for amount above 7.5 Lakh INR). But then they received notice from RBI and as of now all foreign money transfers are blocked through Niyo Global Debit Card. They collected TCS as per the RBI regulations much later around March at the end of the financial year.
Now Niyo has a new offering called Niyo Global Credit Card with 0 forex markup which requires you to open a deposit in Niyo and you get corresponding credit limit. I am still compiling information for the same.
US Bank Accounts
After arriving to USA you can open a checking account in Chase, PNC, Wells Fargo or BofA. but the process is manual which requires in person visit to the bank. After your account is established you get debit card in 7-8 days delivered to your registered address. Meanwhile you can do SWIFT/Wise or other transfers in your bank account and start using it. US Credit card can be an option, but most traditional banks do not offer a credit card without SSN, which can take quite some time.
Zolve becomes a really convenient option in that case.
Zolve, an Indian startup, offers a hassle-free and affordable money transfer option through TransferWise/ Flywire from the app itself. By signing up for Zolve, you gain access to a US bank account in Community Federal Savings Bank, a debit card, and even a credit card without requiring an SSN. You can transfer money to your Zolve bank account while still in India, ready to use upon arrival.
As soon as you land in the USA, you can complete your final verification of you being in US Location. And that activates your virtual debit and credit cards that you can use in apps, Gpay, Apple pay etc. Physical debit and credit cards will be delivered to your US address after verification in about a week through FedEx.
Many US banks charge fees for incoming wire transfers, typically around $15 per transfer. Zolve provides a workaround by allowing you to receive money in your Zolve bank account and then transfer it in smaller increments to any other US bank account of your choice, ensuring safety and convenience.
Although Zolve doesn't offer physical checks or traditional banking facilities, you can easily open an additional bank account with banks like Chase, PNC, or Bank of America and continue utilizing your Zolve account for free.
By signing up for Zolve through our link, you can enjoy a special sign-up bonus of $10 and receive a free US SIM card delivered to your home with 1 month free plan loaded of Mint Mobile which costs $ 15. (Unlimited Calling and 4 GB Free data). The SIM card can be activated even before you land in the US, providing you with immediate connectivity with your loved ones.
Signup using this link to get $10 + free Mint sim card: https://zolve.cc/3CdgmOn
TCS- Tax Collection at Source
Following two articles clear a lot of confusion on new TCS rule by Govt of India applicable from Jul 1, 2023.
In summary, if you keep proper documentation of your expenses in USA, fees, rental payments, etc you will have to pay only 5% TCS on the foreign remittance above 7 Lakh per year limit.
Disclaimer: Please note that the information provided in this blog is based on current knowledge and experiences. It is essential to conduct thorough research and consult with financial institutions to make informed decisions.