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Sending Money Home (to India)

One of the first few questions that any one who has arrived in the US fresh from India asks is, "How do I send money home to my parents in India?". There are many ways you can do this. Note that the below information is provided only as a service and all standard disclaimers apply. Verify all information before use.

  • Send them a personal check (from the same bunch of checks provided by your bank that you use to pay your bills with). Write out the amount in dollars. Mail it home any which way that is convenient. Have the recipient deposit the check into their savings bank account. In due course of time (about 15 - 20 days), the check will be cleared (at the exchange rate on the day of clearance) and the money available for withdrawal. Some banks will allow you to encash the check immediately at a discounted price. Of course, if you want to send money periodically, you could send them a number checks appropriately post-dated.
  • As an alternative to the above method of sending personal checks, you could make a Cashier's Check (in dollars) which MAY get encashed faster (as it is a guaranteed instrument).
  • In the Bay Area, you have the convenience of using State Bank of India (SBI) in San Jose. Follow this link for the bank's contact information. State Bank of India allows you to make Demand Drafts (DD) in Indian rupees which you can then mail to the recipient. Since the draft is in Indian rupees, everything else works the same way as using a DD drawn on any bank in India. Conversion is at the days exchange rate. SBI will accept cash for DD's valued upto $1000. For amounts greater than $1000, you will have to draw a cashiers check from your (US) bank in favor of "State Bank of India, California" for the dollar amount you want to send. You can make a cashiers check for lesser amounts too. SBI will accept a personal check instead of cash or a cashiers check, but they will not issue the DD until the check is cleared (about 2-3 days). There is a charge of $10 for drafts of value Rs 50,000 or lesser. Notice that the amount is in rupees. There is no charge for amounts greater that Rs 50,000. When making the DD, the teller will ask you for a photo ID and your social security number. See this page for more info regarding this. You can do the whole process by mail too. Check this page for appropriate forms. Check with the bank for current charges and procedures.
  • If the recipient has an account with SBI in India, you can also make a wire transfer through the SBI branch. The amount is transferred in 2 business days and there is a charge of $30 per transaction. Check with the bank for more details.
  • The same service as SBI provides in the Bay Area is available for people in and around San Francisco via the Bank of India's San Francisco Agency. Follow this link for the agency's contact information. Charges are (1) Rupee Drafts: $15 for amounts upto $5000, $10 for amounts greater than $5000 (2) Mail Transfer: $20 for amounts upto $5000, $15 for amounts greater than $5000 (3) TT: $35 for amounts upto $5000, $25 for amounts greater than $5000. Check with the agency for current information.
  • Open a Rupee Checking Account with Citibank. This seems to be like any of the NRE/NRO accounts provided by other Indian banks, but they have a host of features including check books for family members in India, ATM cards for family members, money transfers, DD's sent via courier for a nominal charge and Internet banking. Check with Citibank for more details. Citibank has started a new service called c2it. This is an online service that allows you to send money from the US to over 30 countries in the world including India. This service can be used by anyone having a bank or credit card account to send money to a recipient in India who will receive the money as a local check or a bank direct deposit. The service can be used for other kinds of payments too.
  • Use Western Union (1-800-355-6000) or MoneyGram (1-800-MONEYGRAM). These companies provide money transfer facilities. Advantages are that this is very fast and you can arrange the transfer over the phone using your credit card. Disadvantages are the relatively high commissions, restricted areas of operation in India and the fact that agents accept cash only (credit cards cannot be used if you go to an agent; commissions are lesser if you go to an agent rather than use your credit card over the phone). Call the companies for more details (their web-sites are not very useful to find charges, areas of operation, etc).
  • cliks2india.com allows you to send money home using their online service. You pay the amount you want to send by credit card (along with a service fee) and they will send a local check (from Punjab National Bank) to the recipient in 5 business days. This is similar to the Western Union service, but with the convenience of being an online service and having wider coverage and lower fees.
  • Remit2India is a very nice service by the Times of India group in association with CitiBank and UTI Bank. Using a very simple process, you can send money to your folks back in India. Basically you register with the site, choose a mode of payment, send them the money via personal check or wire transfer and they will send a DD to the recipient in India in Rupees or if you choose to, you can wire transfer the money to the recipient in India. They also maintain a transaction history that you can view online. The cost is pretty low too ($10 per transaction at the time of writing this).
  • Sendwise.com provides a service using which you can send money to India via gift cheques. The gift cheques are issued by Canara Bank and will be sent to the receipient in 3-4 working days. You can pay for the cheque by credit card. Credit card transaction fees and services charges apply. You can also use the site to send other gifts to recipients in India.
  • Yet another way to send money to India is via Moneybookers. This company is based in the UK. The transaction charge is low (currently (August 2002) 0.75% of the amount you send upto a maximum of 1.50Euros), but a quirk with this mechanism is that the receiver is also charged a flat rate of 3.50 Euros per withdrawal.

After you know how to send money home, then the question "what about tax issues?" may come to your mind. As per Indian income tax rules, since money sent from the US to India is already taxed, you will not have to pay any income tax in India. If money is sent to close relatives, the recipient will not have to pay gift tax. The bottom-line is that remittances from abroad to close relatives in India for personal uses will not attract taxation (but it might invite scrutiny in which case the recipient may have to prove that the remittance was made from abroad) in any form. Note that this is not professional advice and you should check with authorized taxation experts in India regarding this.

Finally, use our currency converter to find out the value in Indian rupees for the dollar amount you want to send home at today's exchange rate. Verify this information with your bank before making any commitments.

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