Last updated 06 August 2026
It is natural to compare banks on the exchange rate, because that is the number they publish. But on a cross-border transfer to or from India the rate is one of four or five costs, and it is often not the largest. A bank offering a visibly better rate can easily be the more expensive choice once everything is counted.
Every bank quotes a rate worse than the market mid-rate, and the gap is revenue. It is the least visible cost because it is embedded in the price rather than itemised, and most people never see the reference rate to compare against.
The size varies more than you would expect. Against the official reference rate on one ordinary day, the seven Indian banks tracked here ranged from roughly 0.02% to 1.4% for sending US dollars. On a ₹10 lakh equivalent transfer, that spread is the difference between a couple of hundred rupees and around fourteen thousand — from the margin alone. The reference rates page shows each bank's margin directly.
Separate from the rate, most banks charge a flat or tiered handling fee for an outward remittance — commonly in the region of a few hundred to a couple of thousand rupees. Because it is flat, it dominates small transfers and becomes trivial on large ones. On a ₹25,000 transfer a ₹1,000 fee is 4%, which will dwarf any rate advantage you shopped for.
An international wire usually passes through one or more intermediary banks, and each may deduct its own charge from the amount in transit. This is the cost people are least prepared for, because it is deducted en route: the recipient receives less than was sent, and nobody warned them.
Ask specifically whether the transfer is sent with charges borne by the sender or the recipient. If you need an exact amount to arrive — a tuition instalment, a visa fee — this matters more than the rate does, and it is worth paying the sender-pays option to guarantee it.
Goods and Services Tax applies at 18% to the bank's charges on a foreign- exchange transaction — the conversion fee, commission and processing charges. It is not levied on the principal amount you are remitting, and it is not levied on TCS.
Where a bank makes its money purely on the rate and does not itemise a conversion fee, GST is computed on a prescribed value for the conversion rather than on nothing. The practical effect is that GST is a percentage of the bank's fee, not of your transfer, so it is usually a modest absolute amount — but it is real, and it is not in the published rate.
Tax Collected at Source applies to remittances made under the Liberalised Remittance Scheme. From 1 April 2026, following Budget 2026:
The crucial point that causes most of the panic: TCS is not a tax you have lost. It is collected against your PAN and can be claimed as credit against your income-tax liability, or refunded. It is a cash-flow cost, not a permanent one. The threshold is also aggregate across the financial year and across banks, so several smaller transfers can cross it together.
Rates and thresholds change with each Union Budget. These figures are current as of August 2026; confirm the position with your bank before a large transfer, and see the current TCS rules for detail. Nothing here is tax advice.
Ask for the all-in landed amount: how many rupees will leave your account, and how much will arrive in the recipient's, after every charge. That single question cuts through the rate comparison entirely, and it is the number banks are least practised at quoting.
A reasonable order of attention: for small transfers, fixed fees dominate, so compare fees first. For large transfers, the rate margin dominates, so compare rates — the comparison table and converter will show you what each bank's rate costs on your actual amount. Above ₹10 lakh in a year, plan for the TCS cash-flow effect even though you will get it back.