Understand how a telegraphic transfer works
The story of telegraphic transfers started decades ago. Back then, when someone wanted to send money to their loved one across the border, they would go to their bank. The bank teller would send a coded message to the recipient's bank over the telegraph system, informing them of the money transfer request. That is how a telegraphic transfer or telex transfer was done. Times have changed, and these transfers are now done electronically.
For instance, for a parent who wants to send money to their child studying abroad, they will initiate a transaction through the internet or mobile banking. This international money transfer will happen on the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network. Often, the transfer will be routed through correspondent banks before it reaches the child. The sending and receiving banks typically charge a fee to facilitate the transfer.
Let's jot down all the key facts related to a telegraphic transfer or TT.
Keep these critical takeaways in mind as we explore the benefits of a telegraphic transfer.
The telegraphic transfer service is a boon, especially for parents with children studying abroad. Let's see how-
Financial institutions charge a fee to help you send money to your loved one in a smooth, secure way. The fees differ from one financial institution to another. Other variables influence the amount of payment. Typically, international money transfers cost more than a domestic transfer. The financial institutions through which the money is routed will also charge a fee. Some financial institutions may not charge a fee for specific routes.
Financial institutions may allow the sender to choose how to charge the fees: Would you prefer to have the transfer fees levied on your account? Or would they prefer the beneficiary to get the funds after expenses have been deducted?
Whatever the case, an approximate cost is communicated to the sender when they decide the destination and amount of the electronic fund transfer.
In an international money transfer, the money has to be converted into the currency used in the recipient's country. For example, if a mother in India wants to send tuition money to her daughter in the U.S, the transferred funds will be converted from Indian Rupee to USD.
The currency is converted based on the prevailing exchange rate. The financial institutions involved will charge a specific markup on the exchange rate.
While the exchange rates at which the currency is converted will be uniform across all financial institutions, the markup will vary from one institution to another.
If you are a first-time user of telegraphic transfers, you may have questions. Here are the common ones and our answers.
You will need the recipient's name, address, bank account details such as account number, SWIFT code and bank's address.
You can find the SWIFT code on the bank's website, the passbook, or through a simple web search.
Yes, on specific routes same-day telegraphic transfers are possible provided the international fund transfer request has been submitted before the cut-off time. You can find out the cut-off times for various zones on the bank's website.
The banks that help facilitate the international money transfer between the sending bank and final beneficiary bank are called Intermediary or Correspondent banks.
In case you submit incorrect beneficiary details such as the wrong name or bank account number, your bank will reject your transfer request.
Thanks to telegraphic transfer, transferring funds to another account overseas has become much easier.
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