Transferring Money to India

You want to send money to India, and you’re thanking your lucky stars that you’re doing it in the modern age, where it’s as easy as clicking a few buttons. We’re a long way from posting a cheque and hoping against hope it survives the journey.

Transferring money today is a much simpler business, but there are still longer, more expensive options, and quicker, more affordable ones.

On this page, we’ll guide you through everything you need to know about sending money from the UK to India, including typical costs, useful tips, and the best ways to do it.

What’s on this page?

01 | How to transfer money to India
02 | How much does it cost?
03 | How long does it take?
04 | Minimum and maximum limits
05 | What are the tax implications?
06 | What keeps my money safe?
07 | What next?

How to transfer money from the UK to India

To send cash winging its way into someone’s Indian bank account, you don’t need to use the services of a bank. It’s only one of your options. 

These days, there are usually three options to choose from: banks, P2P (peer-to-peer) currency exchange platforms, and foreign exchange brokers.

Allow us to take you through each one.

Transferring money with a bank

This is the traditional option. You can send an international wire transfer from one bank to another through the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network.

The SWIFT network comprises more than 10,000 banks in 200+ countries, so it’s certainly wide-ranging.

However, it’s also an expensive choice. There are usually several fees associated with SWIFT transfers, such as those charged by the sender and recipient banks, along with any charged by the intermediary banks.

Unless the sender and recipient banks have a strong relationship with one another, there can be up to three intermediary banks involved – which is a lot.

After all, banks typically apply a mark-up to the exchange rate, which is usually around 4-6% above the mid-market rate (the one you see on Google). 

There’s more info on fees further down the page.

Transferring money with a P2P currency exchange platform

In the past decade, the arrival of internet-based peer-to-peer foreign currency exchange platforms has radically changed the market. 

These platforms are generally much cheaper than the service offered by banks, mainly because they use the real, mid-market exchange rate, and charge very low fees.

In 2019, The Daily Telegraph reported that the exchange rates used by P2P platforms were on average 4% cheaper than those used by banks.

Importantly, these companies also offer a strong level of security. Every responsible P2P platform operating in the UK is authorised and regulated by the Financial Conduct Authority (FCA). 

These services are called “peer to peer” because they match you with someone else around the world.

For example, if you’re looking to send £100 to India, a company like Wise (formerly TransferWise) will find someone who’s looking to send around ₹10,000 to the UK, and use this pairing to fulfil the exchange. 

If they can’t find anyone to match your transfer request, P2P platforms will simply buy the currency from the usual interbank markets – although this can then make the transfer more expensive. Check out which P2P currency exchange platforms performed best in our experiment. 

That’s why exchanges in very common currency (e.g. dollars, pounds, euros, and yen) are very cheap on P2P platforms, because there’s always demand on both sides. Users literally trade between themselves without any dealers getting involved.

Transferring money with a foreign exchange broker

Foreign exchange (FX) brokers are useful if you’re sending very large sums of money abroad, i.e. over £3,000. They charge fees for their services, but will typically waive (or reduce) these fees for larger transfers.

FX brokers also add a mark-up to the exchange rate, but this is typically much smaller than the mark-up usually applied by banks. 

The key benefit of using an FX broker is the ability to set up a forward contract. This means you can set up future international money transfers with today’s exchange rate, so you won’t be affected by any negative changes.

How much does it cost to send money to India?

It depends on what service you’re using, how much money you’re sending, and how you’re paying for it. 

If you use banks to send an international wire transfer, you’ll be dealing with a marked up exchange rate and a sending fee, while your recipient will have to pay a receiving fee.

According to research by Finder in May 2020, you can expect UK banks to charge up to £40 as a sending fee for an international money transfer, and up to £7.50 as a receiving fee.

Meanwhile, on average, banks add a 4% mark-up to the mid-market exchange rate. 

In contrast, P2P currency exchange platform Wise’s fees for sending pounds to India currently range from a 0.55% fee on transfers of £1,000, to a 0.43% fee on transfers of £593,060 or more.

It also depends on how you pay for the transfer. For example, using a business debit card to transfer pounds with Wise incurs a 0.69% fee, while a credit card incurs a 2.45% fee.

Find out today how much it’ll cost you to use Wise.

The cheapest way to transfer money from the UK to India

In most cases, you’ll find the best rate with P2P foreign currency exchange firms, as they don’t tend to apply any mark-up to the mid-market rate. 

For example, depending on the variables, Wise’s service can be up to 8x cheaper than the service offered by high street banks. 

However, if you plan to send large amounts of money to India at regular intervals, a forward contract with an FX broker will probably offer you the best value.

How long does it take to transfer money to India?

Again, there’s a bunch of variables at play which can affect the length of time it takes to send pounds to India. These include:

• The service you’re using 
• The number of banks involved (SWIFT transfers can involve up to three intermediary banks)
• Whether the transfer falls on a weekend or public holiday

In general, the standard length of time for any international money transfer is between 0-5 business days, with banks generally taking longer than P2P platforms.

For example, if you send money to India through NatWest, a standard transfer will take 2-4 working days.

Or if you choose to transfer money to India with HSBC, it’ll “normally take up to four working days”.

In contrast, sending money abroad via P2P exchange platforms like Wise is typically much quicker. For example, if you send £10,000 from the UK to India via Wise, it’ll usually be in your recipient’s account by the next day.

And if you change your Wise payment method from a wire transfer to a debit card, you can cut down the time it takes even further.

It rarely if ever takes as long as an international wire transfer, because there are no intermediary banks involved.

Can you send an instant money transfer from the UK to India?

It doesn’t seem possible in the current setup to send money instantly to India from the UK.

Your best bet for speed will be either a P2P foreign currency exchange firm or foreign exchange broker, as they typically take one or two working days to transfer your money.

In contrast, banks can take up to four working days – and if you’re looking to complete your money transfer as quickly as possible, you don’t want to be delayed for that long.

Minimum and maximum limits for a money transfer to India

When it comes to minimum and maximum limits, there’s usually a bit of a trade-off between banks and P2P platforms.

Generally speaking, you pay higher fees to send cash via banks, but you can send larger amounts of cash; meanwhile P2P platforms keep fees low, but also impose smaller limits on how much you can send. 

For example, Wise allows transfers of no more than £10,000 per day (if paying via debit or credit card), whereas HSBC allows you to send up to £50,000 online, and as much as you want from a branch.

However, if you’re not looking to send vast sums of money abroad, P2P foreign exchange firms also come with very favorable rules for minimum payments.

Wise simply requires you to transfer at least ₹1, while services such as Western Union require a minimum payment of just £1.

While some banks also do not impose a minimum limit on payments, their large flat fees can make small transfers rather uneconomical.

What are the tax implications of transferring money to India?

Please be advised that while every effort is made to keep this information up to date, Movehub does not provide tax advice, and you should always consult a tax professional about your unique circumstances.

Tax implications for the sender in the UK

The below information is sourced from a conversation with expert Rob De Rienzo, who is a Tax Senior at Global Tax Network.

He told us: “There isn’t much to consider when you’re transferring it away, it’s more about the charges in the country you're transferring it to. Moving money to the UK can be tricky; moving money away from the UK is less difficult.

“Any money that you’ve earned in the UK, you would already have been taxed on, so it wouldn’t be taxed again when you transfer it out.”

This assessment – that money sent from the UK will usually not create any issues for the sender – was also agreed by Naveed Lasi at Xerxes LLP.

However, before sending any money internationally, it’s important that you consult with a professional accountant and/or HMRC to ensure that you’re acting in full compliance with regulations.

Tax implications for the recipient in India

The below information is sourced from a conversation with Amit Jain, desk leader for Europe, Middle East, India, and Africa at Ernst & Young.

He told us: “From an Indian tax perspective, receipt of cash of more than ₹50,000 (£510) without consideration by an individual may trigger Indian gift tax implications.

“However, there are certain exemptions from the gift taxation rules, including gifts from relatives (as defined under Indian tax law), gifts on certain occasions (marriage, inheritance, etc.) and certain donations to authorised charitable organizations.

“In general, remittance to relatives should not have adverse tax implications as long as they are for bonafide purposes, as per exchange control rules.

“I would say generally, remittance by individuals to relatives is very flexible.”

Before sending any money from the UK to India, we strongly advise that you consult the services of a qualified tax professional, to ensure that you are acting in full compliance with UK and Indian law.

What keeps my money safe when I sent it to India?

There are governing bodies in the UK and India whose job it is to ensure that every bank and P2P currency exchange platform is operating responsibly, so that every customer’s money is protected.

Money transfer safety measures in the UK

Any P2P currency exchange firms with registered offices in the UK are administered by HMRC, so they’re obliged to follow all UK Money Laundering Regulations. 

Plus, as ‘payment institutions’, all money transfer firms are monitored by the Financial Conduct Authority. Before sending your money with any currency exchange company, you should check to see if they’re on the FCA register.

Money transfer safety measures in India

India has a law called the Foreign Exchange Management Act (FEMA) that covers transfers of money in and out of the country.

FEMA ensures that transferred money is sent safely and doesn’t come from criminal activities, or with the intention of funding illegal actions like terrorism.

This law is enforced by the Reserve Bank of India, the country’s central bank, which also issues currency and regulates the whole of India’s financial system.

What next?

By now, you should be feeling more knowledgeable about how to transfer money from the UK to India. As you can see, there are multiple options available to you, and they each come with their own benefits.

If you’re tempted by a P2P foreign currency exchange platform, look no further than Wise.