When aspiring to study abroad, there are so many things to manage like paying tuition fees, accommodation, travel expenditures etc. With so many expenses on your list, you can surely save some money with what we are going to reveal in our blog. We will help you understand how currency exchange works so that you can get the cheapest currency exchange service currency without paying huge fees.
The below tips will help you learn about the cheapest ways to exchange currency that lets you avail the best exchange rates when your travel plans take you abroad.
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Also Read: Learn all about how foreign remittance transactions work and what are the processes of inward and outward remittance.
How Does Currency Exchange Work?
Currency exchange refers to the process of converting one country’s currency into another based on its relative values. It operates through foreign exchange markets where currencies are bought and sold. The exchange rates are determined by the supply and demand of a particular currency. The value fluctuates constantly due to various factors like economic indicators, geopolitical events, interest rates, and market sentiment.
If you are a student studying in Japan to pursue higher education, you will have to buy Japanese currency against Indian rupees. The amount of Japanese Yen you will get in hand depends on the currency exchange rates.
Banks, financial institutions, and specialized currency exchange services facilitate these transactions. When you exchange currency, you will receive an amount equivalent to the prevailing exchange rate minus any fees or commissions charged by the service provider.
For example- 1 INR = 1.70 Yen (as of 29 December 2023). This means you will get 1.70 Yen against 1 Indian rupee, and 1000 INR will give you 1700.60 Yen.
Where Can I Exchange Currency?
To get the best deals possible, let us first start by understanding what places can help you with exchanging currencies-
Banks
Most banks offer currency exchange services to their account holders and sometimes even to non-account holders. They may charge a fee or commission for the service. To exchange currency with the banks, you can visit the local branch of your bank and request a currency exchange.
- Make sure to carry a valid ID (passport, driver’s license) as it’s usually required for the exchange.
- You must inquire about the current exchange rate and any fees or commissions they might charge.
Here’s a list of Indian Banks providing the cheapest currency exchange rates-
| Banks | Exchange rate fees charged |
| ICICI Bank | Up to USD 1000 – USD 4 feeAbove USD 1000 – zero fees |
| SBI | Rs. 250/-Exchange rate as applicable |
| Axis Bank | Upto USD 500- Rs. 200 + applicable taxes Upto USD 10000- Rs. 300 + applicable taxes Above 10000- Rs. 500 + applicable taxes |
| HDFC Bank | No charges, only GST is applicable |
Forex Dealers
These are specialized businesses that primarily deal with foreign exchange. They often offer competitive rates and various currencies. To exchange currency with Forex dealers, look for reputable dealers in your area or online. Some of the best forex dealers providing the cheapest currency exchange services are- BookMyForex, Thomas Cook, and Orient Exchange.
- Compare their rates and services and read reviews or ask for recommendations to ensure reliability.
- They may also require identification and sometimes additional paperwork for larger transactions.
Ordering Currency Online
Several online platforms allow you to order foreign currency and have it delivered to your home or a designated pickup location. They might offer competitive rates and convenience.
- Airport currency exchange rates are extremely unfavourable due to higher fees and commissions.
ATMs
Using ATMs in your destination country can often provide you with local currency. However, be mindful of ATM fees and currency conversion charges from your bank. It is always advisable to withdraw a substantial amount from the ATMs and every transaction is charged.
Always be cautious about where you exchange currency and compare rates and fees across different options to get the best value. Carry out transactions at reputable places to avoid scams or poor exchange rates.
It is advisable to use a Zero Forex Markup card that doesn’t charge any additional fees for the currency conversion when you make any transaction.
- For example- if you want to withdraw 80 USD, the currency conversion fee is waived which allows you to make transactions at current exchange rates without paying extra charges.
Also Read: Wondering Why Your Education Loan got rejected even after a Good Credit Score? Check our blog and learn about the factors that can lead to this situation.
Where do I get the Cheapest Currency Exchange?
As discussed above, many banks offer currency exchange services to their customers. Though there is a small fee charged if you exchange currency with your banks, it is one of the cheapest currency exchange ways.
Besides banks, credit unions also offer the cheapest currency exchange. Credit unions are not-for-profit organisations. Credit unions will exchange your currency for a foreign currency before and after your trip when you have a checking or savings account with them.
- Dedicated Credit Unions like the Western Union offer better rates as compared to other platforms.
You may be able to order currency at a branch location, by phone, or online to have it delivered to you or picked up at a branch. Some currency providers allow you to pick up your funds as soon as the next day, have it delivered within one to three business days or opt for overnight shipping.
FAQs on Cheapest Currency Exchange
You should always avoid exchanging currency at the airports as the exchange rates are usually very high. They take advantage of last-minute currency exchange by travellers and mostly have high commissions to cover their operating costs and profits.
Yes, you can exchange currencies at any bank or credit union and get the cheapest currency exchange services from them, with reasonable exchange rates and the lowest fees.
Some banks such as Citibank and Bank of America may not charge a fee and will provide options such as conducting the transaction online or even mailing you the currency.
Yes. SBI offers currency exchange in bureaux de change, in their stores and online.
Many travel credit cards offer fee-free foreign transactions. This can save you money on currency exchange fees, as well as help you avoid overpaying for currency exchange.
This was all about how currency exchange works and what places can help you with exchanging currency when you have travel abroad plans. While Banks and Credit Unions are the cheapest currency exchange places, always avoid exchanging money at airports and hotels because of high fees and commissions.
To know more about the loan application process, the best bank accounts for students, forex and banking experience for global students or international money transfers, reach out to our experts at 1800572126 to help ease your study abroad experience.
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