NRI Banking - Sending Money 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. We do not endorse any particular service, 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
- 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
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
- 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.
- 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).
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. Please verify this information with your bank before making
Questions, comments or suggestions, please contact us.