Best way to Transfer $100K USD to India?

#1 Mar 5th, 2012, 23:24
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  • AmericanGuywithOCI is offline
#1
Hello. Iím a USA citizen with an OCI citizenship of India on my U.S. Passport. This June 2012, I will be relocating from the USA to Mumbai. I plan on living in Mumbai for 25 years or longer. I will purchase real estate to live (apartment flat or condo) in Mumbai shortly after arriving in June. I currently have liquid cash savings of $120,000 USD (60,00,000 INR) to invest in a Mumbai property residence.

However, I donít have any bank accounts in India yet. Before leaving the U.S., should I try to set up an Indian bank account in Mumbai??? This seems tricky since I donít yet have any Indian Identifcation (besides my OCI) or a residence address in India.

What is the best way for me to take this large sum of money into India:

1. Should I do a currency exchange of the $120K USD into INR in the United States. Then, wire the INR from the U.S. to my Indian bank account, before I leave the United States? OR...

2. Take a cashierís check or travelerís checks of $120K USD from my United States bank with me on my plane trip? OR...

3. Go to India with just a little cash. Open a bank account in Mumbai. Then contact my bank in the United States to wire the $120K USD to my Indian bank account?

Please share your advice. Thank you.
#2 Mar 5th, 2012, 23:42
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  • JagguDada is offline
#2

AmericanGuywithOci

Welcome to IndiaMike.

I would go for option #3.

Open an NRi/NRE account in a bank in Mumbai and then get the money transferred.

By the way...Rs.60Lakhs ain't much for buying property in Mumbai.
The prices of flats in Mumbai have skyrocketed in recent years.
#3 Mar 5th, 2012, 23:56
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  • AmericanGuywithOCI is offline
#3
Quote:
Originally Posted by JagguDada View Post Welcome to IndiaMike.

I would go for option #3.

Open an NRi/NRE account in a bank in Mumbai and then get the money transferred.

By the way...Rs.60Lakhs ain't much for buying property in Mumbai.
The prices of flats in Mumbai have skyrocketed in recent years.
Thanks for your reply! The 60Lahks is what I have in liquid cash savings. I could sell off financial assetts/stocks, or apply for a mortgage to cover the rest. Approximately how many Lakhs is a decent flat in Mumbai nowadays?
#4 Mar 6th, 2012, 00:11
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  • JagguDada is offline
#4

Cost of a decent flat in Mumbai

Depends on the location.

Suburbs of Bandra, Khar, are very expensive...starting around one crore and more.

Further away in Kandivali maybe around 50 Lakhs.

Central suburbs like Matunga, Sion, Dadar...starting around 70/80 Lakhs.

These are only in the older buildings....the new developments with pool etc cost even more like the Hiranandani complex in Powai.

Maybe some Imikers from Mumbai will chip in with their two cents worth.
#5 Mar 6th, 2012, 01:13
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  • Nick-H is offline
#5
Once you have an Indian bank account, it will be a normal international banking transaction.

It may take a little ground work, to establish your "resident" status so that you can open a resident account. The exemptions on registering for PIOs is a double edged sword, as that registration certificate is very useful for such things.

You also need to know that your USA will accept the instruction by fax (or however) to make the transfer. You may need to set this up in advance, if you wish to avoid a trip back there to do the transfer instruction in person.

You should probably get yourself a PAN card, if you do not already have one. You won't want to miss out on the interest, even short-term, on such a sum, and banks are going to want to see a PAN card for large fixed deposits etc. You might find it useful to consult a chartered accountant.
#6 Mar 6th, 2012, 03:09
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#6
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Originally Posted by JagguDada View Post Maybe some Imikers from Mumbai will chip in with their two cents worth.
Thanks for the info. I posted a thread about this housing topic in the Mumbai discussion page. Seems more appropriate to discuss it over there.
#7 Mar 6th, 2012, 03:23
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  • carcorodoncarcharias is offline
#7
Dude, open a NRE account in any Indian bank that has operations in the US (SBI, Citi, BofA, HSBC..to name a few) and move the money to the NRE account and keep the money in USD vs Indian Rupees. That way, if the INR takes a dive against USD or other major basket of currencies while you are looking for a house, you'll benefit on the exchange rate. As an American citizen and OCI, you can open a NRE acct and you can later convert it to a resident acct (after a year or so when you start filing for Indian taxes).

Opening a NRE acct is pretty simple and you need proof that you are of Indian origin who is not resident there at the time of opening the account and your US passport and OCI card can both prove that. And you can do this from the US (or for that matter any country you are residing).

Don't jump the gun and open a resident Indian account until you have settled there and start filing taxes in India as a resident. Keep your money in a NRE account and that way, 6 months down you want to get the hell out of dodge for some reason ( quite a few people I know have done this. They move back to India thinking it is all fun and games and then learn the hard way they cannot readapt and even if they did, their kids cannot and then come running back), you can transfer it back to US easily or leave it in the NRE account without getting taxed on interest.
#8 Mar 6th, 2012, 04:51
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  • JagguDada is offline
#8

Golden Advice

"Don't jump the gun and open a resident Indian account until you have settled there and start filing taxes in India as a resident. Keep your money in a NRE account and that way, 6 months down you want to get the hell out of dodge for some reason ( quite a few people I know have done this. They move back to India thinking it is all fun and games and then learn the hard way they cannot readapt and even if they did, their kids cannot and then come running back), you can transfer it back to US easily or leave it in the NRE account without getting taxed on interest"

Thats a golden piece of advice. I, with my family, tried to go back in 1998 and it did not work out for various reasons.
#9 Mar 6th, 2012, 11:28
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  • Nick-H is offline
#9
I would have said, compare interest rates before choosing the NRE USD account ... but the rest of carcorodoncarcharias's advice might well override that consideration.

Repatriating cash brought into India from abroad is said to be a great deal easier than it was fifteen years ago, but hey, I haven't actually tried it!
#10 Mar 6th, 2012, 12:09
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#10
Nick-H, the NRE foreign currency accounts pay a handsome interest and better than what you'd get for a term deposit or CD in the respective home country banks. And keeping your money in USD/GBP/EURO in a NRE acct hedges you against exchange rate fluctuations and the INR is expected to further weaken against the dollar and sterling and euro.
If I were in OP's shoes, that would be the only way I'd park my money in India, in a foreign currency NRE account. I would not convert my savings into INR unless on a needed basis. And even NRE rupee accounts in India now pay interest in par with the resident accounts but I would much rather prefer a NRE foreign currency account. And for argument sake, I am not including dividend yields from stocks or interest yield from bonds and it is purely bank term deposits and Cds/Money Market accts.
#11 Mar 6th, 2012, 12:47
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  • paramiyer is offline
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I would suggest option 3 as well. If your accounts in US are with banks having Indian presence (like Citi, BankAm, etc.), your life would be a bit easier as their counterparts in India might be more helpful.
Arrange with your bank in US to Wire Transfer your funds to India after your local account is setup.
Just a tip: Please do not declare to the bank staff in India upfront that you have 'liquid' cash of 120K$ - they will setup some Variable Insurance plan to deplete all your reserves
In my case, I just filled up a Foreign Currecy Cheque deposit with the bank in India - it took about a week to get the payment in India (would take less for Citi/BankAm & like) & the bank will convert at a reasonable rate to INR. Other option is to do the same thing, but retain it as FCNR deposit in USD & change to INR as and when needed. In general, SBI has better exchange rates than foreign banks in India.
Also, for moving small funds (say 5K$), ICICI Bank has a service called M2I, which I have used in the past- rates are not very good, but credit takes 2-3 days max.
#12 Mar 6th, 2012, 12:51
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  • praks is offline
#12
AFAIK, the interest of about 9.5% per year on an NRE account is also tax free as per HDFC Bank's advertisements. I would also not jump the gun and purchase an apartment in Mumbai immediately upon arrival. It would be better to lease for a while and get a feel of the place before investing in real estate. Leasing a place per year costs about 5%-6% of the purchase price, so a tax free return on Rs.60 lakhs should give you a sum of Rs. 47,500/- per month to spend on rent, which will allow you to get a much better apartment or a better location than if you were to buy. Once you get used to Mumbai and decide to stay permanently, then you could choose to buy an apartment in a locality of your liking.
#13 Mar 6th, 2012, 13:32
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  • JOHNLORD is offline
#13
All good advice, but remember if you are in India for more than six months, you are supposed to covert your NRE/NRO account into a normal resident account.

60 lakhs will not buy you anything decent ( over 1300 square feet).

Even in kerala 1200 square feet flat would cost over 45.
Lord, Grant me the Serenity to accept the things I cannot change, the courage to change the things I can, and the wisdom to hide the bodies of those people I had to kill because they pissed me off.
Last edited by JOHNLORD; Mar 6th, 2012 at 13:33.. Reason: spelling
#14 Mar 6th, 2012, 21:36
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  • bombayboy is offline
#14
Quote:
Originally Posted by JagguDada View Post Central suburbs like Matunga, Sion, Dadar...starting around 70/80 Lakhs.

I don't think you can get anything good in Matunga, Sion or Dadar at 70/80 lakhs (2BHK). You can a decent flat at Mulund at that price, though. Even Chembur would be more.
#15 Mar 9th, 2012, 15:43
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  • a_f_d is offline
#15
I agree with the bank account advice ( or leave your money in the US and just bring a Visa card).
ALSO I strongly suggest you try renting for a least a year before you commit.

AndyD 8-)#

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