Education

Currency cues

Make sure you check out this expert advice on Forex-related points

While spending a significant amount of time in historic locations such as London, Milan or Paris and living in a different culture can sound exciting for the family, nervous moments and apprehensions creep in occasionally, especially when considering the high costs associated with studying abroad.

Affordability

Foreign education is extremely expensive and it requires conscious efforts and planning by parents before they zero in on the decision to pursue one. According to estimates, Indian parents are willing to give as high as USD 200,000 on an average for U.S. or U.K. university undergraduate courses. This average cost varies, with countries such as Canada or Australia charging less. Depending on the university as well, an American undergraduate course costs USD 50000 or ₹33.5 lakh a year.

While tuition fees, hostel rent, meals and insurance each charge a significant amount, there are alternatives to these contingencies such as off-campus housing, third party meal plans and customised medical or travel insurance policies. The one thing, however, for which parents accrue the most amount of expenditure is on exchanging currency.

While there are a plethora of options and platforms available with respect to foreign exchange, most people are unaware of the various forex products and services that can significantly result in lower charges. Banks and moneychangers charge a hefty sum in the range of 2.5% to 6% over the interbank rates. (₹2,500 - ₹6,000 per 1 lakh of foreign currency). Airport exchange counters on the other hand can charge somewhere around 6.5-13% (₹6,500 - ₹13,500 per 1 lakh of foreign currency) for the same. When someone pays through international debit or credit cards they pay in range of 3.5% to 6.5% ( ₹3,500 - ₹6,500 per 1 lakh of foreign currency).

On the other hand, forex marketplaces provide offers such as zero margin rates, charge zero fees, and take absolutely zero commission. Thus, a customer gets continuous update on forex rates. Forex Marketplaces serve as an ideal platform for availing currencies of more than 30 destinations. Users also benefit from ‘freeze rate alerts’ that provide users with the best rates of the day which they can freeze to get the most out of their forex exchange.

Keep in mind

Double-check the total fee amount: Parents should do a thorough check regarding the various sub-heads included in the total fees of the universities. Many parents have complained of overlooking compulsory sub-heads mentioned in the prospectus, and then ending up having to pay more fees which they had not accounted for.

Policies and rules: As per the RBI’s Liberalised Remittance Scheme, only U.S. $250,000 is allowed to be remitted during a financial year. This is often ignored by the parents who end up sending more than the required amount and hence end up paying more in fines. Online forex marketplaces can provide regular updates regarding the nearing of such limit and seamlessly arrange for the documentation to facilitate an easy transaction.

Be efficient: Parents need to know the different processes that will benefit them significantly. The SWIFT process (Society for Worldwide Interbank Financial Telecommunication) involves a set of dual charges levied on the intermediary as well as the beneficiary bank. While this enhances the charges, forex cards, on the other hand, accrue only a single charge as they are marked Visa/Mastercard which makes them acceptable as international credit or debit cards. Furthermore, online marketplaces, completely cut down on any margin on forex rates, including issuing, reloading, unloading or transacting in stores, online and even at ATMs, for the first three occurrences.

The author is the CEO and Co-founder of BookMyForex.

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Printable version | Jun 5, 2020 10:32:27 PM | https://www.thehindu.com/education/currency-cues/article19523426.ece

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