Complete Guide for Buying Foreign Exchange in India

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• April 2024

Introduction

When you’re planning to visit another country for work, study, or vacation, you usually need to purchase some foreign money before you leave. Even though you can use your credit or debit card for many things, it’s a good idea to have some cash handy for small regular purchases. So, if you’ve already planned your trip, booked your cheap international flight tickets online, sorted your accommodation and now wondering about where to exchange money or how to get foreign currency, you’re heading in the right direction.

Here is a complete guide for buying foreign exchange in India before you venture on your trip abroad.

Know what is Forex

Forex, or foreign exchange, is like a big marketplace where you can swap one country’s currency for another. Just like when you go to a store and exchange your money for goods, forex in India, you’re exchanging money for money. It simply means exchanging the currency of one country for another at a specific exchange rate.

Why do you need Forex for your trip abroad?

• Currency Conversion: In most countries, you can’t use your home currency directly for purchases. You need to convert it into the local currency to pay for goods and services.


• Convenience: Having local currency on hand makes transactions smoother and more convenient.


• Avoiding High Fees: Exchanging currency in your home country before you travel can often be cheaper than exchanging it at airports or currency exchange booths abroad, where fees and exchange rates might be less favourable.


• Emergency Funds: Carrying some local currency provides a safety net in case of emergencies or if you encounter situations where cards are not accepted.


• Budgeting:Exchanging a specific amount of money beforehand helps you budget for your trip more effectively, as you can allocate certain amounts for different expenses.


• Access to Services:Some services, like taxis or public transportation, might require cash payments in local currency, so having Forex ensures you can access these services without any hiccups.


• Better Exchange Rates:By planning ahead and using reputable currency exchange services, you can often get better exchange rates compared to last-minute exchanges or using less reliable sources.

Overall, having access to Forex is essential for managing your finances and ensuring a smooth experience during your trip abroad

Different ways to carry Forex

Wondering if you should carry Forex Card, Cash or Debit Card for your international trip? Here are different ways to carry Forex:

• Forex Travel Cards: Forex travel cards are like special debit cards loaded with money (currency) of other country. You can use them when you travel abroad, just like a regular debit card. Forex cards work all over the world and make it easy to buy things or withdraw cash in different countries.


• Cash: When you’re traveling, it’s smart to have some cash with you, about 10-20% of your total money, in the local currency of the place you’re visiting. If you’re going to a developed country, it’s best to have their currency. But if you’re going to places like Thailand or the Middle East where their currency isn’t widely used, it’s better to have US dollars, and then you can exchange it there.


• Debit/Credit Cards: Credit and debit cards are a great way to carry foreign money when you travel. They’re handy because they save space in your wallet and you don’t need to worry about converting money.


• Traveller’s cheques: Traveler’s cheques are special checks available in different amounts and currencies, which you can use almost anywhere in the world. You buy them for specific values and can exchange them for things you need during your travels.



Forex Tips for buying Forex in India

• Compare forex exchange rates from banks, airports, money changers, and online platforms to find the best foreign exchange rates for the country you’re visiting.


• Save yourself the hassle of visiting the forex stores. Many companies provide doorstep forex delivery services. Order your currency online ahead of time for home delivery before your trip.


• Be very careful of illegal money changers to avoid scams.


• When buying foreign currency in India, keep an eye on exchange rate changes and buy when it’s in your favour. The rates fluctuate often.


• Ask for specific bill denominations for convenience instead of large bills.


• Keep your currency exchange receipts safe for record-keeping when buying foreign currency in India Avoid carrying large amounts of cash and split it up in different secure places to reduce the risk. Best is to carry minimum currency and opt for forex card.


• Understand the currency exchange limits set by the RBI. Carrying excessive currency can result into heavy penalties. Time your currency exchange purchase if there might be changes due to political or economic issues.



How much Forex can one carry?

With the sea of international tour packages available online, planning an international trip isn’t rocket science, what’s important is to find out the limit of foreign currency one can carry on their trip. The Reserve Bank of India (RBI) says that if an Indian person is going abroad, they can take up to $3000 in cash with them. And for the whole year, they’re allowed to take a total of $250,000 in foreign currency. They might also need to fill out a declaration form if they carry more than $5000 or $10000, depending on the regulations. They should buy or get the foreign currency from dealers approved by the RBI.

Foreigners leaving India can take with them any unspent foreign currency they brought in. This means they can carry the leftover money from what they declared when they entered India.

Documents required to buy Forex

Every Indian resident who wants to buy foreign currency in India must have certain documents according to RBI rules. These include an Indian passport, a valid visa if needed, a confirmed air ticket showing travel within the next 60 days, a PAN card, and a government-issued photo ID proof like Aadhaar, a voter’s ID, or a driving license.

Different ways to buy Forex in India

• Get foreign money from your bank: Visit a bank and check the rate of foreign currency you need and do the purchase.


• Visit a forex dealer or travel agent: Your travel agent can also help you with forex for foreign travel. Infact, they can even get you better forex rates especially if you have booked your complete package through them. Plus, you’re in a better position to negotiate with them then a bank who will offer you a fixed rate. Make sure to compare rates before you buy.


• Order online: There are many websites where you can buy forex online. You can either get the money delivered to your home or pick it up from a branch.


• At the airport: You can also exchange money at the airport, but it’s usually more expensive. So, try avoiding it if possible. The same goes for exchanging money at a hotel.



Conclusion

Buying foreign currency in India before your trip abroad is advantageous for several reasons. Firstly, it offers convenience, allowing you to handle this task before your departure without the stress of last-minute arrangements. Secondly, you typically get better exchange rates in India compared to exchanging currency abroad, ultimately saving you money. Additionally, having foreign currency readily available ensures you’re prepared for emergencies and unexpected expenses during your travels. It also helps with budgeting, as you’ll know exactly how much you have to spend in the local currency of your destination. Overall, purchasing foreign currency in India before your trip ensures peace of mind, better financial planning, and smoother travel experiences.




Also Read: Different Purposes for Which You Need to Buy Foreign Currency




Source: akbartravels.com

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