Skip to main content

Buying Forex

Invest Mutual Funds Online

Download Mutual Fund Application Forms



Come May and it is time for some lucky ones to head for a foreign shore. With less than 10 days to go, it is time to hunt for foreign exchange. Especially, if you want to avoid the last minute rush. Travellers can purchase foreign exchange even 180 days prior to the travel date provided they can produce the required documents. However, most travellers prefer to buy foreign exchange 3-4 days prior to their scheduled departure as they do not like to block their cash. To purchase foreign currency, you will need copies of the passport, pan card, air ticket/visa.




There are various players in the market who sell foreign exchange. They include authorised full-fledged money changers, banks, travel agents and the unregulated grey market.

 

Typically, forex dealers charge the lowest commission as compared to banks or travel agents. If the rupee is trading at 67.59 per euro, a bank will charge you around 70-72. This rate varies from bank to bank. A money changer may charge a rate of 68-70, which again varies from dealer to dealer. As a dealer with a full-fledged money changer says: Buying and selling foreign exchange is our bread and butter. We don't have other sources of business which can offset any possible risk that arises out of the forex business. Hence we offer forex at the most competitive rates.  When we buy currency, we have to offload the foreign exchange on the same day. An overnight exposure in the forex market can be fatal as there could be a wide fluctuation in the currency market.


The unregulated grey market may offer even "lower" rates, but it comes with a host of risk factors. A traveller may benefit by way of 10 paise to 25 paise, but it is always advisable to avoid going to the grey market. The risks are counterfeit notes, non-issuance of receipt for the foreign exchange. In fact, if a counterfeit note is found when using overseas, the authorities ask for receipt, and in the absence of the same it is construed that the money has been bought from the grey. It is most expensive to exchange currency at international airports. "Even mineral water is sold at . 100, which would cost . 10 outside. This is because the real estate is very expensive at airports. The same logic will hold for currency also. There will be loading of 2-5% depending upon the location.


Avoid Excess Cash


You cannot totally ignore cash, although most places, including taxis, accept prepaid forex cards. I would advice travellers to carry a plastic travel card. These chip-based cards offer enhanced security features and there is no fear of loss of value. These cards can be used at any POS terminal and are widely accepted even by cab drivers in developed countries.


From security point of view, card mitigates the risk of one losing the entire amount he/she's carrying in case of a theft or loss of wallet. If one is carrying a loaded forex card, it can be immediately hot-listed to ensure that the amount remains safe.


Carrying excess cash has the twin risks of likely theft and counterfeit issue which can land you in trouble. Counterfeit notes are indeed a matter of concern. We constantly train our staff to identify and detect forged notes by using ultraviolet light machines. However, super counterfeit notes beat the normal eye as well as UV light machine and is a cause of concern.

 

Prepaid Forex Card Is A Good Hedge


Pre-paid forex cards are an effective hedge against exchange rate fluctuations. This is because the value of the forex amount loaded is determined based on the exchange rate of the day which remains fixed. So a customer can actually load the forex value on the prepaid card in advance when forex rates are favourable.


When a customer puts forex on a travel card, he does not have any additional charges. For example, if he purchases $100 from a money changer, then all the $100 is loaded on the card. A money changer will, however, charge for the conversion, which he will do for giving cash as well. In case of credit/debit cards, banks bill on the basis of the exchange rate prevailing on the date of the transaction. On the other hand, in case of a pre-paid card, you would be spending at the rate as on the date you loaded your card. Whenever the customer uses a debit/ credit card outside the country, the transaction takes place in the foreign currency. Hence, the customer has to bear a currency conversion charge, known as cross currency mark-up, for every transaction done on the card. The value of this conversion charge is variable as usually it's a percentage of the transaction amount which is in the range of 3-5%. That's the premium a customer has to bear for every transaction.


Visiting Multiple Countries


If you are visiting a single country it makes sense to buy a single destination currency. For instance, if you are just visiting Singapore, it makes sense to purchase Singapore dollar to avoid cross currency exchange costs. At every stage, there will be a cross currency exchange cost because the operator will charge a margin to convert the foreign exchange to the local currency. If one is travelling to multiple countries in Europe, we recommend the euro, because any customer will not travel simultaneously to a European country as well as the US. Though the US dollar is a universally accepted currency, we recommend the euro to avoid cross currency exchange cost. In case the customer is travelling to the US, we recommend US dollars, which can be used across the US.

---------------------------------------------

Invest Mutual Funds Online

Transact Mutual Fund Online

 

Download Mutual Fund Application Forms from all AMCs

Download Mutual Fund Application Forms

 

Best Performing Mutual Funds

    1. Largecap Funds:
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    3. Mid and SmallCap Funds
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    4. Small and MicroCap Funds
      1. DSP BlackRock MicroCap Fund
    5. Sector Funds
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    6. Gold Mutual Funds
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

 

Popular posts from this blog

Equity investors should track market developments

The stock markets have been volatile over the last few days. They are in a sideways movement and trying to find the bottom after a fall of 20 percent a week ago. The market sentiments are not very positive at the moment and the recent developments are expected to dampen them further. Globally, governments and central banks are trying to cut rates and announce packages to improve business sentiments. These are some of the major developments in the markets last few month: A) Global On the global front, another large US bank went into a financial crisis. The US government took quick measures to avoid the spread negative sentiments in the markets. The US government announced a bail-out package and agreed to shoulder the losses on the bank's risky assets. China announced a large cut in interest rates and reserve ratio to boost the investor sentiments in the markets. Recently, the World Bank announced China's growth rate next year will come down to 7.5 percent. The European ...

Tax Planning: Income tax and Section 80C

In order to encourage savings, the government gives tax breaks on certain financial products under Section 80C of the Income Tax Act. Investments made under such schemes are referred to as 80C investments. Under this section, you can invest a maximum of Rs l lakh and if you are in the highest tax bracket of 30%, you save a tax of Rs 30,000. The various investment options under this section include:   Provident Fund (PF) & Voluntary Provident Fund (VPF) Provident Fund is deducted directly from your salary by your employer. The deducted amount goes into a retirement account along with your employer's contribution. While employer's contribution is exempt from tax, your contribution (i.e., employee's contribution) is counted towards section 80C investments. You can also contribute additional amount through voluntary contributions (VPF). The current rate of interest is 8.5% per annum and interest earned is tax-free. Public Provident Fund (PPF) An account can be opened wi...

TDS Rate and Personal Account Number(PAN)

    The TDS rate doubles to 20% from 10% if you fail to mention your Personal Account Number   IF you run a glance through your pay slip, you will come across something called TDS, which is tax deduction at source. In most cases, the employer deducts this amount at the time of payment of salary itself and pays the total tax amount to the government on behalf of all the employees. If you are a self- employed or practicing professional s, you have to pay this amount yourself.    Tax deducted at source is one of the modes of income tax collection by the government. Under the income-tax laws, income tax at specified rates is required to be deducted while making certain payments.    The rate of deduction of tax at source on interest and rent payment is 10%. For salary payments, the employers deduct income tax at source on a monthly basis after computing income tax liability on estimated annual taxable income of the employee. Tax benefits on housing loan, investments, etc are consid...

Fortis Mutual Fund

Fortis Mutual Fund, a relatively new player, it is still to prove its case and define its position in the industry. In September 2004, it came onto the scene with a bang - three debt schemes, one MIP and one diversified equity scheme. And investors flocked to it. Going by the standards at that time, it had a great start in terms of garnering money. Mopping up over Rs 2,000 crore in five schemes was not bad at all. The fund house has not been too successful in the equity arena, in terms of assets. Though it has seven equity schemes, it is debt and cash funds that corner the major portion of the assets. Most of the schemes are pretty new, and the two that have been around for a while have a 3-star rating each. The last two were Fortis Sustainable Development (April 2007), which received a rather poor response, and Fortis China India (October 2007). Fortis Flexi Debt has been one of the better performing funds, after a dismal performance in 2005. It currently has a 5-star rating. None ...

Gold: It is safe & secure

RETURNS ON GOLD & ITS ETF’s RISE WHILE most of the popular asset classes are going through bad times, the yellow metal shines on. In fact, in the last one year, gold has given a return of more than 25% and currently trades at Rs 14,695 per 10 gm. Even gold exchange traded funds ( ETFs ) have appreciated substantially. Gold Gold Benchmark Exchange Traded Scheme ( BeES ) and Kotak Gold ETF have given more than 25% returns each in the last three months. Even as the equity markets have taken a hit with the Sensex losing around 46% in the last one year and real estate prices also witness a correction, investors’ preference has shifted to safe havens such as gold. On an average, most of the diversified equity mutual funds have fallen and real estate developers are offering discounts. Thus gold remains the safest bet. The appreciation in the gold prices is mainly due to its safe haven status. The key reason for gold to go up is lack of other investment opportunity. There is also a risk in...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now