Transfer Money from India to USA: A Complete Guide

As of May 2024, over 5.4 million Indians live in the United States, and the number continues to grow as more students and professionals move there in search of better opportunities. As a result, the need to transfer money from India to the USA has become increasingly common.

There are various reasons for this, such as supporting family members, covering educational or medical expenses, or making investments. Several options are available in the market to meet these needs, but choosing the right one can be confusing.

In this guide, we'll walk you through everything you need to know about transferring money from India to the USA, including the different methods and tips on how to save on fees.

Common reasons for transferring money from India to the USA

Every year, many individuals and businesses transfer money from India to the USA for various reasons, including:

Supporting family members 

Transferring money to support family members is one of the most common reasons for international money transfers. Many Indians send funds to relatives in the USA to help with everyday living expenses, unexpected emergencies, or significant family events like weddings, funerals, or milestone celebrations.

Education expenses 

Sending money for tuition fees, hostel charges, and living expenses is another common reason to transfer money from India to the USA. In 2024, over 1.33 million Indian students went abroad for education, according to the Ministry of External Affairs, with the USA being the second most popular destination. As a result, education-related transfers have become a large part of India's outbound remittances.

Medical expenses

The USA is known for its advanced healthcare facilities, and many Indians seek treatment there for complex medical conditions or emergencies. Families in India often transfer money to cover medical expenses for relatives in the USA, including routine procedures, life-saving treatments, hospital bills, medications, and post-operative care.

Investing in properties or businesses

Investors often transfer funds to the USA to buy property, make business investments, or support start-ups. According to the US National Association of Realtors, Indians made up 7% of all foreign buyers in the year leading up to March 2023, investing $3.4 billion and purchasing 5,900 homes.

Gifting money

Sending money as gifts is another common reason for international transfers. Whether it's for a birthday, wedding, or other special occasion, many Indians transfer funds to family and friends in the USA as a gesture of love and celebration. 

Remittances for business transactions

Indian businesses frequently transfer funds to the USA to manage international operations. This can include payments to suppliers, contractors, or employees based in the USA. These transfers also help in maintaining good trade relations between India and the USA, contributing to the growth of both economies.

How to transfer money from India to the USA

Transferring money from India to the USA involves several methods, each with its own set of benefits and considerations. Below is a detailed explanation of how to transfer money from India to the USA using different methods, along with their pros and cons:

Virtual wallets

Virtual wallets are a popular method to transfer money from India to the USA. They are digital platforms that allow users to store, manage, and transfer money in multiple currencies. These wallets are increasingly popular due to their flexibility and ease of use, especially for cross-border transactions.

Process

Users can load money into their multi-currency wallet in Indian Rupees (INR), convert it into US Dollars (USD) within the platform, and then transfer it to the recipient’s bank account in the USA or directly transfer money to their virtual wallet. Popular virtual wallets offering multi-currency capabilities include Native Teams, Revolut, Payoneer, and others.

Time taken

Transfers between virtual wallets are typically instant. Transfers to external bank accounts usually take 1 to 3 business days, depending on the service provider and the recipient's bank.

Costs

Digital wallets usually offer more competitive rates than traditional banks. The currency conversion rates are also competitive but may include a small margin, and some platforms charge a flat fee for withdrawals or transfers.

Bank transfers (wire transfers)

Process

A wire transfer is one of the most traditional methods to send money internationally. You can send money directly from your bank account in India to the recipient’s bank account in the USA. Most Indian banks (like State Bank of India, ICICI Bank, HDFC Bank, etc.) offer wire transfer services. This can be done either online or by visiting the branch.

Details required

To complete the transfer, you'll need the recipient’s name, their bank account number, the bank's SWIFT/BIC code, and sometimes additional details like the bank's address.

Time taken

Transfers between banks generally require one to five business days to complete. This timeframe can vary based on factors such as individual bank procedures, any intermediary banks used, and differences in time zones.

Costs

Banks charge a fee for wire transfers, which can vary depending on the bank and transfer amount. These fees may include a fixed charge for the service, currency conversion fees, and any intermediary bank fees.

Online money transfer services

Several online money transfer platforms have become increasingly popular for international remittances due to their convenience, competitive exchange rates, and lower fees. Popular services include Wise, Western Union, PayPal, and others.

Process

You can register on the platform, provide the recipient's details, and fund the transfer through your Indian bank account, debit card, or credit card. Some services, like Western Union, also allow the recipient to pick up the money in cash, while others, like PayPal, are primarily for online transfers to bank accounts or other PayPal accounts.

Time taken

Transfers through online platforms are often faster than bank transfers. Depending on the method you choose, the money can be received in the recipient’s account in just a few hours or within 1 to 2 business days.

Costs

These services usually charge a flat fee plus a margin on the exchange rate. Fees can be lower than traditional banks, particularly for smaller amounts.

Foreign currency demand drafts

Process

A demand draft is a type of cheque issued by a bank in a foreign currency, such as US dollars. You can request a demand draft from your Indian bank and send it to the recipient in the USA, who can deposit it into their US bank account.

Time taken

The recipient will need to deposit the demand draft at their bank. This can take anywhere from a few days to a couple of weeks, depending on postal services and clearing times at the recipient’s bank.

Costs

Banks charge a fee for issuing the demand draft, and you may also need to pay a currency conversion fee. Postal or courier charges may apply.

International debit/credit cards

Process

You can use an international debit or credit card to load the required amount in Indian rupees (INR) and then use it for online purchases or ATM withdrawals in the USA. Some banks also offer prepaid travel cards for such transfers

Time taken

Transactions are instant, so the recipient can start using the card as soon as the funds are loaded.

Costs

There may be fees for card loading, foreign exchange conversion, and ATM withdrawals. These charges can add up if the recipient needs to withdraw a significant amount of money.

Foreign exchange brokers

Companies like Instarem, CurrencyFair, and OFX specialise in currency exchange and money transfers internationally. These services are best for larger transfers, as they offer competitive rates.

Process

You can register on the platform, provide recipient details, and fund the transfer from your bank account or debit/credit card.

Time taken

Transfers can take 1-3 business days, depending on the provider and payment method used.

Costs

These platforms typically offer lower fees and better exchange rates for larger sums, although they still charge a fee based on the transfer amount.

Documents required to transfer money from India to the USA

When sending money abroad, there are specific documents you may need, depending on the transfer method:

• Proof of identity: A valid government-issued ID such as a passport, Aadhaar card, or voter ID is usually required.
• Bank account details: In some methods, you must provide both your and the recipient's bank details, such as account number, routing number (if applicable), and SWIFT/BIC code. Always double-check the recipient’s details to avoid errors or delays in the transfer process.
• Purpose of transfer: Some services may ask you to specify the reason for the transfer, such as paying for education, medical expenses, or investment purposes.
• Source of funds: Depending on the amount you’re sending, you may need to provide proof of where the money is coming from, such as a payslip or business income.

Factors to consider before you transfer money from India to the USA

Transferring money internationally involves several important factors that can affect the amount received by your recipient. Here’s what you need to consider:

Exchange rates

Exchange rates fluctuate daily, and the rate you get can have a big impact on the final amount received by the recipient in the USA. Always compare rates from different providers, such as banks and online transfer services, to ensure you're getting the best deal. Some providers might offer more competitive rates, especially for larger transfers.

Transfer fees

The fees for transferring money can vary depending on the method and service you choose. Some use a fixed fee, while others calculate charges based on the transaction amount. Keep an eye out for hidden charges like conversion fees, processing fees, or additional costs for urgent transfers.

Regulations

The Reserve Bank of India (RBI) limits the amount you can send abroad under the Liberalised Remittance Scheme (LRS) to USD 250,000 per financial year. This limit covers all types of transfers, including investments, gifts, and remittances.

Taxes

International money transfers above a certain limit can result in taxes. If you want to know how to send money from India to the USA without tax, here are some things to remember:

• International money transfers above ₹7 lakh in a financial year may attract Tax Collected at Source (TCS), which can be claimed as a tax credit when filing income tax returns. 
• 0.5% TCS for education funded by a loan from a financial institution
• 5% TCS for education without a loan or medical treatment
• 20% TCS for other purposes such as investments or travel.

Speed of transfer

Some services offer instant or same-day transfers, which are useful for emergencies but may cost more. Bank wire transfers and other methods may take 2–5 business days but often come with lower fees. Choose a service based on how quickly you need the money to arrive.

Security

Security is critical, especially for large transactions. Opt for services that are well-regulated, reliable, and have strong security features like encryption and fraud protection. Trusted providers often display their credentials, such as licences or certifications, on their websites.

Customer support

Good customer support is very important in case you encounter any issues, especially in matters related to money. Choose services that offer 24/7 assistance via phone, email, or live chat. A responsive support team can help resolve problems quickly and provide peace of mind.

Tips to save money on international transfers from India to the USA

Now, coming to the most important part, transferring money internationally can create a hole in the pocket, so here are some tips to help you save on fees and get better exchange rates:

Transfer larger amounts

Many providers charge lower fees for larger transactions. If you plan to send money regularly, consolidating smaller amounts into one larger transfer can help you save.

Time your transfer

Exchange rates change throughout the day and week. If you have the flexibility, monitor the rates and make your transfer when they are favourable to get the most value for your money.

Choose low-fee services

Look for services that are transparent about their fees and have lower charges for smaller amounts. There are multiple options in the market, and comparing them will help you find the most economical choice.

Use online services for better rates

Currency exchange through digital platforms can often be more economical than using traditional banks due to better rates and lower fees. Many also offer quicker transfers and user-friendly apps, making them a convenient and cost-effective option.

How can Native Teams help?

Native Teams, a global platform for work payments and EOR (Employer of Record) services, offers a multi-currency wallet feature that can be used to transfer money internationally, including from India to the USA. This method combines ease of use with competitive rates and is especially suitable for freelancers, remote workers, and businesses managing international payments. Here are some of the features:

• Multi-currency support: The wallet supports multiple currencies, allowing seamless conversions and transfers.
• Transparent fees: Competitive rates with no hidden charges.
• Ease of use: Simple and intuitive platform, ideal for frequent international transactions.
• Integration with payroll services: Perfect for freelancers, remote workers, or businesses using Native Teams to manage their global payroll needs.
• Quick setup: No need to visit a bank; everything is managed online.

To understand step-by-step how our virtual wallets work, check out our full guide.

Conclusion

In summary, transferring money from India to the USA has never been easier, with plenty of methods to suit different needs. It’s important to compare the available options carefully before deciding so you can find the best deal for your situation. Make sure you have the required documents ready and choose reliable services to ensure your transfer is safe.