Sending your child abroad for studies is a big step in any parent’s life. Preparing for their overseas education is a long process- right from conducting research for identifying the right universities and courses, checking the eligibility criteria, appearing for entrance examinations and then subsequently planning travel and accommodation abroad.
Even though an education loan would cover the university tuition fee, parents often must support their children for accommodation and other overheads while they study abroad. Foreign remittances for education, in India, form a huge part of the money sent abroad. In fact, money remitted for studies abroad grew by 76.61 per cent from 2021.4 USD million in 2017-18 to 3569.9 USD million in 2018-19.
Getting familiarized with the process of remitting money to your child’s destination country is a critical aspect for parents. From navigating remittance platforms to assessing exchange rates, sending money abroad could be a tricky affair.
Here are a few tips that could come in handy when remitting funds abroad:
Planning ahead of time: Often, people make last-minute decisions to transfer money, which may not be the most feasible option. Apart from emergencies, plan your remittance sufficiently in advance to ensure a seamless experience. Ideally, you should plan this as soon as your child selects universities or once they get accepted into a college of their choice.
Choosing the right remittance partner: Take time to compare platforms and understand aspects such as the exchange rates, transaction limits, processing fees, customer service, and experience, etc. Some players levy additional charges to the beneficiary and may have other hidden costs associated. Ensure that you opt for a platform that guarantees transparency and delivers the full credit amount to your recipient.
Understanding the transaction limit: For students receiving money from India, there are guidelines set by the RBI under the Liberalized Remittance (LRS) Scheme. Living expenses of students studying abroad are covered under the LRS and the limit is USD 250,000 per annum. The maximum transaction limit for sending remittance using an online channel is USD 25,000 per transaction, which is also the maximum daily transaction limit.
Exchange rates: It is important to gather information on the latest exchange rates and assess charges of the services available. Platforms such as digibank Remit offer 24×7 locked-in FX rates, which allows one to book the transaction at the displayed rate (i.e. guaranteed rate) and the funds get debited at the same rate, once the transaction is successfully processed.
Ease of transfer: Transferring money abroad is no longer an extended and complex process. Digibank has integrated technology to deliver a fully digitized, quick and hassle-free experience, avoiding the need to walk into your bank or any cumbersome documentation whatsoever.
Emergency fund transfer: Being stuck in a foreign country with limited access to funds during an emergency is a highly stressful scenario. Few remittance platforms have a cooling period before you are allowed to add a new payee. In such cases, payment receipts could take anywhere between 1-2 working days. While selecting a remittance platform, opt for one that facilitates same-day transfers.
Overall, selecting the right remittance platform could go a long way and translate into significant savings over the course of your child’s entire college term. Evaluate your options carefully and choose a platform that ascertains safety, security, and reliability.
By Asheesh Jain – Head, Investment and FX Business, Consumer Banking Group, DBS Bank India.