There are a number of methods available for sending money from a foreign country to India. These options for money transfer to India vary from the time old traditional methods of making payments to the parties in India, to the modern methods of doing the same, more conveniently and speedily. Currently, the latest and most innovative method of E money transfers are the quickest and error free method of making money transfers to India, from any location in abroad.

How to receive money from abroad? Transferring Money to India

A small research will enable a person to find out the method of money transfer, that suits her/him the best-

Money Transfer to India through Automated Clearing House or ACH

Automated Clearing House or ACH is an electronic fund transferring system. This fund transferring system is very popular in the United Sates of America. There is an institution named National Automated Clearing House Association or NACHA, which has specifically defined rules for governing the functioning of Automated Clearing Houses. These rules regulate the internet banking clearance made by Electronic payments and transactions; those are made between the participating financial institutions or banks.

When anyone sends money to India from her/his bank account in the United States of America, using the Automated clearing house mode of money transfer, the transferred amount is received by the recipient bank within four working days of transaction. This transferred money, when credited in the recipient bank can be withdrawn by the recipient party, on the very next day. There is no need of making payment of any money as an extra cost to these transactions and both the sender and the recipient do not need to visit the banks repeatedly. There also no need to send any cheques with ACH transfers. This ACH mode of money transfers are both great time and money saver.

How does Automated Clearing House work?

  • The sender registers with routing number and bank account number with the remittance service provider.
  • The remittance service provider sends this sender’s registration number to the Correspondent bank.
  • The Corresponding bank creates a file with all these provided details and transfers the file to the Automated Clearing House.
  • The Automated Clearing House makes a sub US Dollar transaction to the overseas bank.
  • The Overseas bank makes the payment of the transacted money to the recipient.
  • The payment status update is sent back to the sender of the money, using the same route.

Online Money Transfer to India:

This method of making online transfer of money is currently the most popular method of money transfer. It is also the easiest way of sending money.

Online money transfer needs the sender and the receiver to have active internet connectivity. This method of money transfer also needs to use local banking service for transferring money to a bank account in India. The sender has to have the correct information of the name and the address of the account holder, or of the recipient of the transferred money. The sender must also have complete and correct information of the financial institution or the bank, where the money is being sent to. The sender has to have the IBAN or SWIFT code of the recipient bank.

This method of online money transfer is very useful for those people, who are doing regular money transfers. Online money transfer method does not have any steep banking charges and the money transfer can be done from the comforts of sender’s home only.

Wire Transfer of Money to India:

Wire Transfer is one of the most common ways of transferring money internationally. The sender has to visit a financial institution, such as a bank or some other agencies of money transfer, or to one of its branches, for transferring money through Wire transfer.

Some of these agencies are Western Union, Xoom, or Remit2India. These agencies help the sender to send their money to a recipient in India.

The agency making the Wire money transfer collects information about the recipient and about the bank of recipient, from the sender. It also gathers information of any other available facility, where the money has to be sent.

The institution that is sending money, initiates the wire transfer, after the institution of information about the recipient, from the sender, up to its satisfaction. This sender institution then sends a message to the money receiving institution. This entire process of money transaction may take a few days.

How does Wire Transfer Work?

  • The sender visits a bank and provides the details of the receiver of money to them.
  • The sender then gives a deposit slip.
  • The sender submits form for wire transfer for initiating the transaction of money.
  • This bank then transfers the amount to the Correspondent bank.
  • The Correspondent bank receives the money and delivers it to a remittance service provider.
  • The remittance service provider remits the money to the recipient of the funds.

PayPal Money Transfer

PayPal is an electronic method of money transfer. PayPal helps in transferring money from one account to another account. The recipient of the funds needs to pay a transfer fee. The sender needs not bear any expenses related to the transfer. The international fund transfer charge 3.9% of the amount per transaction, which is in addition to the regular exchange rate of transfer.

Also Read: How to Setup PayPal Business Account in India?

International Money Order

International Money Orders are a very safe method of making international money transfers. This method is also very cheap and fast way of transferring funds internationally. Fund transfers to the remote places in India, where other facilities are not available, through this method is indeed very successful. The international money orders can be deposited into the bank account of the recipient directly. These can also be encashed in many cheque cashing locations. The recipients need to have a valid ID for cashing the cheques.

This money order is simple to purchase and there is no any need of checking account. This method is ideal for sending small amount of money to India.

Bank Drafts and Cashier’s Cheques

Bank Drafts and Cashier's Checks are available at any bank, anywhere in any country. There is a fee associated with these services and it may take some time to cash the checks in India. The cost of purchasing a bank draft is higher than money order. This form of money transfer is traceable, if the checks or drafts don't reach the destination, in India. They are more economical but time-consuming.

Personal Cheques

Sending a check to the recipient of money in India, in foreign currency is another option for the sender of the money. The recipient may find cashing the check bit difficult, because it can be delayed process. It is simply because the bank has to verify the authenticity of the deposit made. The recipient may have to pay additional fee, as a payment for the exchange rate and encashment charges. This method is safer than sending cash by mail because the sender is in position of cancelling a check if it fails to arrive at its destination.

E Mail Money Transfer

E-mail money transfer is an online method of making a money transfer to India. There are no extra charges associated with this method of money transfer. It is exactly like a bank to bank fund transfer but here the sender does not need not to have the receiver's bank information.

The sender has to log on to his bank's website and fill a form, for transferring the money to the recipient. The form does not ask for too many details and the sender has to give the receiver's e-mail ID and answer a security question. The sender shares the answer to the security question only with the receiver. An e-mail is sent by the bank to the receiver and the receiver has to answer the security question correctly, in order to validate his identity.

If the receiver does answer the security question correctly, he will be forwarded to his bank's website, asked for the details of his account, and complete the transaction. This process takes a day if the receiver's bank is in the list provided by the sender's bank. If not, then the transaction takes 3-5 days. Most people mistakenly assume that e-mail money transfer is not secure.

No sensitive information is shared over the e-mail. If the e-mail goes to the wrong recipient, he or she will need the correct answer to the security question to access the money. The name e-mail transfer just signifies that the initiation and notification of the money transfer is done via e-mail.


Having many choices for a purpose is always good news. The modes of transfer of funds depend on the sender's priorities. They may be speed of the fund transfer, amount of money transferred, whether the money transfers are regular or one-time transfers, cost of transfers, and the receiver's convenience.

Finally, the sender and the receiver have to communicate clearly to decide on the best way to send money that suits both of them in every aspect.

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