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Wire Transfer Vs Forex Card which is the best option for students


For students flying abroad for higher studies, fund transfers from home country is one of the major concerns, especially in a country like India. The initial concerns for a student planning to study abroad is fund transfer for tuition fees, funds for daily expenses on initial days in overseas. Apart from this one big concern is what is the best and cheapest method for fund transfer & whom to trust as there are so many forex dealers in India. Recent studies on the above subject reveals that the most preferable methods for money transfer abroad are forex card and wire transfer.

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Wire Transfer & Forex Card:

A wire transfer is an electronic funds transfer made from one individual or entity to another. In India, wire transfer can be processed through one’s bank online or one’s local branch, or through a foreign exchange dealer category II. Once the order for wire transfer is place by the customer, the bank or dealer will forward a SWIFT message to its correspondent bank in the receiver’s country. The receiver or beneficiary usually gets the credit in his bank account within 48 hrs.

On the other hand, a forex card is pre-loaded with the currency of foreign nation where the person is travelling (or USD) & enables the user to use the card at merchant’s POS machines, online purchases or withdrawal from ATMs. It’s like any other credit or debit card in terms of usage but certainly much cheaper in terms of cost. Usually multiple currencies can be loaded in a single card and for that reason these are also called as multi-currency card. To buy foreign currency in the form of a forex card once has to purchase it before leaving the home country.

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Wire Transfer Vs. Forex Card

Here are some advantages & disadvantages of both payment modes.

  • Commission: Commission or fees are charges to both sender and receiver in case of wire transfer. Fee is charged to sender upfront and normally the beneficiary’s fee is charged at the time crediting the amount to its account. The commission may vary from bank to bank depending on their overseas arrangement and also on the number of correspondent banks involved in the process of transfer, but usually are high. On the contrary, forex card issuing commission or fee are very low and most of the forex dealers do not charge their customers any activation or issuing charges.
  • Convenience: Wire transfer is can only be initiated once you are in a foreign country & you have a bank account there; whereas, forex card can be issued without having an account with the dealer or overseas and can be re-filled by parents of the student when he is in abroad.
  • University Fees: Most universities accept only wire transfers and do not accept online payment using forex card. In case your university doesn’t accept online payment by Forex card, it is better to go ahead with wire transfer.
  • Withdrawal Limits: Usually there is always a restriction on the amount to be spent using prepaid cards within 24 hours. Be aware of your transaction limits.
  • TM Withdrawal Charges: A small fee is charged to the card by the card issuer when used in ATMs. User should be careful enough of not using the card in chargeable ATM machines, where fees are even more.

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