How to select the best money transfer service and get the best exchange rate for your money?

If you say you simply go by ads and claims, then you need to do more homework. You're smarter than that. Aren't you?

All money transfer services tout themselves as the "best money transfer" service to India. They guarantee security of the service, 24 *7 customer support, no fee, any bank to any bank in India, secure transactions, 4 day delivery and what not.

No doubt your money's security and other attributes like speed of transfer are important. But what about one of the most important attributes "exchange rate"? Everyone claims theirs to be the best in the world. You get confused. No wonder then you go back to what your friends do and just choose that service.

Remember when you get an exchange rate that is low, you are potentially losing a lot of money. For e.g. if your service pays Rs. 0.30 lower (than standard) per $ or #, even if you are transferring $1000, that translates to Rs. 300/-. With increasing amounts and frequency, you can win or lose money depending on the service you choose.

Many times you don't care to check, and the service makes money big time. How then can they cover their cost?

The tricky thing is from the moment you initiate the transfer, your service will pay the exchange rate 2 or 3 days later. They publish their daily rates in their own sites. DO NOT trust this rate as a good bench-mark.

There really is a much better way to measure your money transfer service provider. Here's how.

Everyday, the RBI (Reserve Bank of India) , publishes a reference rate for all major currencies against the rupee. This is a standard rate that the RBI expects the bank to provide to customers. It's usually published in the home page itself. I am providing a screen shot for reference. Check the exchange rate on the RBI Site on the day of you initiate the transfer and for the next few days.


Compare what's in RBI site on the day with what you get from your service provider. If you are within + or - Rs. 0.15, then your exchange rates are decent, and the service provider is reasonable. If it is outside this range, then you need to call up the service provider , show the data and ask him what's going on. If you don't get a comfortable response or remedial action, don't hesitate to ditch the provider for another.

Although there are popular service providers like Remit to India and Money to India, my experience with them was not positive. Sometimes I got lower exchange rates, sometimes delayed remittance, sometimes poor customer service when there was an issue, sometimes all of the above.

I have been using State Bank of India's Online Money transfer service, for the past 6 months or so. Online SBI offers competitive exchange rates (validated against RBI rates) and all the other security features without much ado. The portal is very simple and user friendly to use. You don't have to have an account in SBI in India or in US, to use their services.

All in all, I'm a very satisfied customer. Note that this is not a paid ad or anything. Just my personal experience.

Who do you use for money transfer? What's your experience? What tricks do you use to get the best exchange rates?