Travelling abroad for the first time? Here are 10 currency exchange tips from an industry insider, George Zachariah*
April 15, 2023:Travelling abroad is an adventure that most of us look forward to. Whether you're planning a backpacking trip through Europe or a beach vacation in Southeast Asia, buying foreign currency for your trip is a crucial aspect to remember. The last thing you want is to end up paying a lot of money on conversion fees or exchanging currency from unlicensed money exchanges which could lead to potential legal complications.
Here are 10 tips to help you get the most out of your currency exchange.
1. Exchange currency before flying abroad
The Indian Rupee is not a global currency, i.e., it is not accepted abroad for exchange. You can convert it to a foreign currency safely and at a reasonable exchange rate only within India. So do the currency exchange before flying abroad.
2. Buy only from licensed money exchanges
Only buy forex from money exchange companies that possess RBI's Authorised Dealer-II or Fully Fledged Money Changer license. Although unlicensed agents or stores may offer cheap rates, there is a risk of getting counterfeit foreign currency notes from them. If you are caught with counterfeit currency by law enforcement agencies abroad and that too without a valid bill of exchange, you may face grave legal consequences which will surely ruin your trip.
3. Research options online and choose the best deal
Online websites can assist you in locating RBI-licensed money exchanges near your location with favorable exchange rates. ExTravelMoney is an online aggregator of forex services in India. The website has tie-ups with leading banks and reputed money exchanges such as Axis Bank, Thomas Cook India, Unimoni (formerly UAE Exchange), and Ebix Cash etc. Compare exchange rates across different licensed vendors, choose the best deal online and save money on your currency conversion.
4. Buy foreign currency in various denominations
When buying foreign currency for your trip, request for it to be split into various denominations. Having a variety of denominations allows you to make purchases more easily and can help you avoid overpaying for small items due to a lack of change.
5.Know the required KYC documents
Every resident Indian needs to have KYC documents to purchase foreign currency in India as per RBI rules. Indian Passport, Valid Visa (if applicable), Confirmed Air Ticket (showing travel within 60 days), PAN Card and a Government-issued photo ID proof (Aadhar Card, Voter's ID, Driving Licence etc.) are required. For a hassle-free transaction, make sure to bring along these documents when exchanging currency.
6. If you are low on time, order foreign currency home
Get foreign currencies delivered to your home just like groceries or other shopping items through online websites like ExTravelMoney.com, which offers same-day delivery. Opting for doorstep delivery can save you time and ease your travel preparations.
7. Avoid exchanging currency at the airport
Avoid exchanging currency at the airport as it may turn out to be a costly mistake. If you have ever bought coffee at the airport, you know how costly it is. The reason for this is that airports impose high rental fees on the shops operating within their premises. In turn, shops charge higher prices for their products in order to make up for the expensive rent. The same holds true for currency exchange outlets in airports. One may end up paying an extra 10-15% for currency exchange at such places. Meanwhile, online currency exchange websites like ExTravelMoney generally charge a margin of only 1-2% for the complete transaction.
8. Don’t rely on currency exchange at your hotel abroad
We talked about how the Indian rupee is not a global currency and is rarely accepted for an exchange abroad. However, some hotels abroad may accept the rupee for exchange but here is why you should avoid it. Exchanging currency at your hotel may seem convenient, but they typically charge higher exchange rates and fees than banks or currency exchange offices. They also may have limited amounts of currency available, so you may not be able to exchange a large amount of money if needed.
9. Follow the 30/70 rule
Carry 30% of the required foreign currency as cash in different denominations and the remaining 70% in a Forex travel card. It is a prepaid card that can hold multiple foreign currencies. Forex cards can be used abroad to withdraw cash at ATMs, pay at hotels and restaurants, make purchases at shops, and malls, and for online transactions, such as booking flights, hotels, and other travel-related services. Carrying some cash is helpful in situations where card payments are not accepted. With the Forex card carrying 70% of your travel money, security features like a chip and PIN ensure the safety of your funds. You can order a Forex card online via websites like ExTravelMoney. Forex cards are usually more economical than purchasing foreign currency notes because their exchange rates are quite lower.
10. Keep your international debit/credit card as a backup
Here's one last tip to keep in mind. Make sure to have your international debit/credit card as a backup option with you. This ensures that you'll have access to funds in case your primary card is lost, stolen, or declined. Also, many international debit or credit cards come with additional perks, such as access to airport lounges. These lounges can provide a comfortable and relaxing space to wait for your flight, with amenities like free Wi-Fi, snacks, drinks, and even showers. However, before going on your trip, be sure to activate international spending on your card. This can be done either through your bank's mobile app or by contacting customer care. Notify them of your travel plans and request that the card be enabled for international transactions.
The process of exchanging foreign currency in India can be daunting for someone without much experience. However, with the right resources and adequate knowledge, it is possible to successfully navigate this process with flying colours.
*The Author is the CEO of ExTravelMoney.com, an online marketplace for retail forex services in India.