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

ULIP Review: ProGrowth Super II

  If you are interested in a death cover that's just big enough, HDFC SL ProGrowth Super II is something worth a try. The beauty is it has something for everybody — you name the risk profile, the category is right up there. But do a SWOT analysis of the basket, and the gloss fades     HDFC SL ProGrowth Super II is a type-II unit-linked insurance plan ( ULIP ). Launched in September 2010, this is a small ticket-size scheme with multiple rider options and adequate death cover. It offers five investment options (funds) — one in each category of large-cap equity, mid-cap equity, balanced, debt and money market fund. COST STRUCTURE: ProGrowth Super II is reasonably priced, with the premium allocation charge lower than most others in the category. However, the scheme's mortality charge is almost 60% that of LIC mortality table for those investing early in life. This charge reduces with age. BENEFITS: Investors can choose a sum assured between 10-40 times the annualised premium...

Am you Required to E-file Tax Return?

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   Am I Required to 'E-file' My Return? Yes, under the law you are required to e-file your return if your income for the year is Rs. 500,000 or more. Even if you are not required to e-file your return, it is advisable to do so for the following benefits: i) E-filing is environment friendly. ii) E-filing ensures certain validations before the return is filed. Therefore, e-returns are more accurate than the paper returns. iii) E-returns are processed faster than the paper returns. iv) E-filing can be done from the comfort of home/office and you do not have to stand in queue to e-file. v) E-returns can be accessed anytime from the tax department's e-filing portal. For further information contact Prajna Capit...

Section 80CCD

Top SIP Funds Online   Income tax deduction under section 80CCD Under Income Tax, TaxPayers have the benefit of claiming several deductions. Out of the deduction avenues, Section 80CCD provides t axpayer deductions against investments made in specific sector s. Under Section 80CCD, an assessee is eligible to claim deductions against the contributions made to the National Pension Scheme or Atal Pension Yojana. Contributions made by an employer to National Pension Scheme are also eligible for deductions under the provisions of Section 80 CCD. In this article, we will take a look at the primary features of this section, the terms and conditions for claiming deductions, the eligibility to claim such deductions, and some of the commonly asked questions in this regard. There are two parts of Section 80CCD. Subsection 1 of this section refers to tax deductions for all assesses who are central government or state government employees, or self-employed or employed by any other employers. In...

Bharat Bond ETF

Top SIP Funds Online   The government of India has paved the way for the launch of India's first corporate bond ETF called as Bharat Bond ETF. Edelweiss Mutual Fund will be managing it. The fund is mandated to invest in AAA-rated bonds of select public sector companies (see the table 'List of constituents and their proportions in the portfolio'). The government has a threefold objective behind launching this product. One, to deepen the liquidity of the Indian debt markets and provide a gateway for easy retail participation. Two, to solve investors' dilemma of picking premium bonds. Lastly, to help the underlying government-owned companies raise funding for their operations. But does it make sense for you, the investor, to invest in it? Lets find out. What is the product? As the name suggests, it is an exchange-traded fund which will be listed on a stock exchange from where its units can be bought and sold post launch. It will have two variants - one maturing in 3 ye...

What is Electronic Clearing Service (ECS)?

  As the name suggests, it's an electronic process through which money can be transferred from one bank account to another. According to RBI, this mode is usually used for regular payments and receipts, like distribution of dividend, interest, salary, pension etc. This mode is also used for collection of bills for telephone, electricity, water, various types of taxes, payment of EMIs , investments in mutual funds , payment of insurance premium etc. There are two types of ECS , like most other banking transactions, ECS credit and ECS debit. An ECS credit is used by a bank account holder , usually a large company or an institution for services like payment of dividend, in terest, salary, pension etc. If your mutual fund pays you dividend to your bank account, of all probability it is being paid through ECS credit.ECS debit, on the other hand, is used when a company or an institution is getting money from a large number of people. For example if you are investing in a mutual fund sc...
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