There are three ways to carry foreign currency or forex — currency notes (cash), travellers cheque and forex card. Photo: AFP
Mumbai: Are you all excited about your upcoming holiday? Where are you travelling this time — Hawaii or Seychelles? Have you booked your tickets and made accommodation arrangements? Be it a family of four or a bunch of young millennials, Indians have started taking at least one annual vacation abroad. Other than leisure, there are students who travel overseas for higher education. One major part of planning the trip is deciding on how much money to carry. There are three ways to carry foreign currency or forex — currency notes (cash), travellers cheque and forex card. While the first two are self-explanatory, here’s how you can get a forex card at the cheapest price.
Buying a forex card
A forex card is a prepaid instrument — you preload money in the card with single or multiple currencies of countries you plan to visit. Like your debit and credit card, you can use it to withdraw cash from an ATM and also swipe it to shop.
When you buy a forex card, or a travel card, you have to pay two kinds of cost — the currency rate and the fees and charges. Currency rate is the rate of the currency that you have to load. For instance, if rupee against dollar rate is at 65, it means for $1, you have to shell out Rs65. You can’t do anything about this rate, it changes worldwide on a daily basis.
Then there are other charges — conversation charges, travel card cost, cash withdrawal and transaction cost.
Currency conversion
When you convert rupee to another foreign currency, it is benchmarked to the interbank rate. Banks, money changers and online portals that sell forex add a margin to it. Margin is the money that they make on the conversion cost. “Of the amount you load in the card, banks keep a margin of 2%-2.5%, while money changers keep 3%-3.5%,” said Ananth Reddy, founder and managing director, buyforexonline. In case of online portals such as bookmyforex, buyforexonline and fxkart, the margin is 0.5% and at times even zero.
Other charges
If you buy a forex card directly from a bank, you will also have to pay a card issuance charge of around Rs150 - Rs200, reload charge of Rs100-Rs200. Also, every time you withdraw money, there will be a transaction cost of Rs200-Rs400. Forex websites waive off these charges. Tax and service charge: “When you buy a forex card, you also have to pay GST,” said Sudarshan Motwani, CEO and co-founder, Book My Forex. Usually, it is around 0.25%-0.30% of the total. The forex aggregators will deliver it to you. Some charge a fee of around Rs50-Rs100.
Where to buy a forex card?
If you are used to ordering things online, buying forex card online will not be difficult at all. To buy, you have to go to the website, pick the currency of the country that you are going to, put the amount and book it. You need to provide an identity proof and basic details. Depending on the city that you stay, the delivery time will vary. However, if you are one of those who needs to interact with a bank executive and are not comfortable doing it on your own, you can visit a bank or money changer, but it will cost you more.
