Is it best time to Send Money to India from USA?

In 2016, After Donald trump's victory and historic decision on Rupee demonetization in India, many of my friends working in living me asked the question whether now is the best time to send money to India from the USA? Well, it certainly looks so at that time. The USD/INR exchange rate was at an all-time high of 68.34 and very likely to go to 70, so it definitely sounds like the best time to send money from India to the USA but look at now? Where are we? Rupee is now close to 83, I mean USD INR rate is close to 83, which means 1 USD is equal to almost 83 INR which is highest so far and that's why I think now is probably the best time to send USD to India. 

The US dollar or USD, in particular, is rising for the last 9 years against INR, particularly after the Indian election in 2014, and appreciated against INR, which has lost more than 50 to 60% since then. 

After the victory of Donald Trump in the US presidential election, the US dollar has become even stronger against many currencies like GPB, JPY, SGD, and AUD and it is expected to continue to become stronger and stronger given Trump's campaign of "America First".

With Joe Biden and increasing interest rate, everyone is putting their money in USD and why not? if you can almost 5.5 interest per annum without risk then why would you put your money into risk. Equities and risky asset make sense when interest rate is very low like the zero interest rate period we have seen where money flowed to all kind of startups and business. 

Btw, If you are looking to send money abroad consider TransferWise. It’s a great tool for sending and receiving money internationally with low fees — much cheaper than using your local bank. You can also get your own local bank account details in Europe, the UK, the US, Australia, and New Zealand with the TransferWise Borderless account

By the way, the reason for sending money to India may not be just the exchange rate but the long-term view of where you want to settle and which currency you consider as home currency. Since many NRIs, consider INR as their home currency and prefer to keep their money in an NRE account rather than keeping in USD in the local American bank, the current high-interest rate of USD/INR 68.34 seems the best opportunity to send money to India from America.


However, if you want to settle down in the USA and already bought a home and enrolled your kids in USA schools you should not excite with this momentum in the exchange rate as in the long-term, it's better for you to keep money in the USA itself.

Another thing, I would like to point that even though NRE fixed deposits seem the best option to keep the Indian currency as interest earned on NRE account is tax-free in India, you must remember that NRE fixed deposit is not safe from bank defaults. 

RBI or Government doesn't ensure NRE fixed deposit, hence it is better to diversify money in multiple NRE account with different banks, one of the most important reasons to open multiple NRI accounts.



On India's side, due to demonetization, all the banks have got a huge deposit of cash, and the interest rate on FD is fallen down as low as 6.5% for 1 to a 2-year term. The longer-term fixed deposit rates are still close to 7% which is not bad.

So, if you plan to send US dollars from the USA and want to invest in NRE fixed deposit, now is the best time because the interest rate on NRE fixed deposit will go further go down and may outweigh the profit you make in USD/INR upward movement which I don't believe will cross 90 because that would be a big headache for Government and opposition will directly link that to demonetization. So, RBI will try everything to keep the USD/INR rate under 70 at least for the next six months.

Oil is also a big factor in the USD/INR exchange rate because India imports 80% of Oil and make payment in USD. When Oil prices will go down India will need more USD to pay which will further take the rupee down. Oil is trading in a range in the last six months but you never know.

In short, given the excellent USD/INR conversion rate touching 68 it seems a great opportunity to send money to India from the USA and invest in NRE fixed deposit. 

The interest rate has gone down in NRE fixed deposit but it is still better than what you can get in local banks e.g. Citibank, Bank Of America, or Wells Fargo. Given the money in the NRE account is fully repatriable, if you want to keep some of your savings in Indian rupees, this seems to be the best time.

Btw, don't forget to revise these tips while sending money to India, remember "a penny saved is a penny earned". Always compare exchange rates and transfer charges before zeroing in any money transfer service for sending money to India. 

You can use ICICI Money2India, Xoom, Remitly, Remitly Express, Transferwise, Ria, Transfast value+, Transfast Fasttrack, Axis bank (Fixed), Remit2India (fixed), and Western Union for transferring money from the USA to India.

P. S. - If you are looking to send money abroad consider TransferWise. It’s a great tool for sending and receiving money internationally with low fees — much cheaper than using your local bank. You can also get your own local bank account details in Europe, the UK, the US, Australia, and New Zealand with the TransferWise Borderless account

P.  S. S. - If you are sending a large amount of money, I suggest you check the CurrencyFair website which generally offers a much better exchange rate, and also the first 3 transfer is free for all new customers. If you want to avail of this here is the link to get the first 3 free transfer money from overseas including the UK, USA, and Australia.