Recently, a friend asked me about the best forex cards available in the market. Although I was sure that Niyo Global is the best forex card but just to convince him I did a data comparison on forex cards of major Indian banks.
While the concept of forex cards is simple and straightforward. Their only benefit is the ability to lock the exchange rate. However, banks seem to be making money at every step in this very simple product.
What are the fees applicable on forex cards?
Forex cards issued by banks have fess for nearly everything under the sun.
Issuance Fees: All forex cards have issuance fees ranging from INR125 to 3,000, depending on bank and card variant.
ATM charges: In case one withdraws cash from an ATM, nearly all forex cards will charge USD 2 equivalent or a certain percentage of the withdrawn amount. This is over and above the cash withdrawal fees levied by the ATM in a foreign location.
Cross currency charges: This charge is levied when forex card is used to make payment in other currency. Let’s just say someone using USD forex card makes a payment of 100 Euros. Then, one will be charged USD equivalent to 100 Euros + 3.5% charge for converting the currency + don’t forget the share of the government (18% GST on 3.5%).
Wallet-to-Wallet Transfer Fees: This fees is applicable for multi-currency cards, where say you make payment in GBP, but you dont have enough GBPs on your cards, however, there is sufficient balance in other currencies. This is nicely explained here, courtesy Yes Bank.
Refund Charges: That’s not all. Once you return from abroad and want to convert your forex back into INR, banks will charge 75-100 bucks for converting foreign currency back into INR.
But forex rates from the banks are lowest, right?
All banks have their own treasury function who decides the buying and selling rates of various currencies depending on banks’ exposure in the forex market; they do publish these rates daily on their website. Below are the forex rates for forex cards of major banks as on 14th Feb. Rates for Niyo Global are Visa rates taken from here.
Clearly, not only banks charge higher rates compared to Visa rate but also charge high spread between buying and selling rates. Thus putting us consumers at a disadvantage.
Okay, tell me about various Forex cards available
First, let’s see the forex cards from banks
ICICI Bank’s Forex Cards
ICICI Bank offers 4 different variants in forex cards. Below is the snapshot of fees and charges applicable on using ICICI’s forex cards.
While most variants are available at joining fees of INR499+GST, ICICI Sapphiro card has joining fees of INR 2999 and annual fees of INR999. This is because it offers 0 cross-currency charges and no charges for the wallet-to-wallet transfer, which can be useful for someone who is constantly on the move across different countries and some other offers.
HDFC Bank’s Forex Cards
HDFC Bank’s has 3 major variants in forex cards space. While I could not get the annual fees, refund fees and inactivity fees for these cards; knowing HDFC Bank it is better to assume there will be some fees applicable for these too. 😀
Nonetheless, as always HDFC Bank’s offers on these cards are much better than other banks. Details are here variant wise HDFC MMT, HDFC Regalia and HDFC Multicurrency card.
Other Banks’ Forex Cards
Other major banks such as Axis Bank, Kotak Bank and Yes Bank too offer multi-currency forex cards. Below are the details on the same.
Niyo Global Forex Card
I have written about Niyo Global Forex card extensively here. Below is a brief recap
How does Niyo Global Forex Card works?
Niyo offers the card as a prepaid debit card and opens a current account in your name with DCB Bank. Therefore, it is your account where you transfer the money in INRs and can swipe it anywhere in the world. So, let us just say one happens to swipe the card in Singapore; you will be only charged SGD/INR. Later on, if one happens to swipe the card in Japan, you will be charged JPY/INR rate. There are no cross-currency charges too. One can use the card in India as a debit card too on any PoS machine. The same card can be used for online transactions too; this is useful in scenarios where one needs to book in foreign currency ahead of the travel.
- Joining Fees: NIL. Currently available absolutely free of cost.
- No charges on adding or withdrawing INR via NEFT.
- No currency conversion charges, cross currency conversion or forex mark up charges
- Worldwide acceptance
- Uses Visa network, thus has worldwide acceptance, both online and offline
- Doubles up as prepaid debit card while in India
- One can transfer leftover money back into any bank account in India (No charges again), can be even used to withdraw cash from nearest ATM.
- Mobile app to manage the card. One can track expenses, transfer money, block/unblock card easily using the app easily.
- Exposed to currency fluctuations.
- While using for an online transaction in Singapore, I didn’t receive email OTP but only an OTP on SMS (Read here, on how to get free SMS on your India number while travelling).
- Not possible to load money using a credit card.
Any sample comparison between Niyo Global and other forex cards?
I did a spend comparison between Niyo Global and other forex cards. Here for simplicity, I assumed buying 1,000USD and refund of 100USD later on. To keep it simple, I didn’t assume any ATM cash withdrawal, cross-currency payments or wallet-to-wallet transfer. The key takeaway is, for every USD spent abroad Niyo Global saves you ~INR2.
As mentioned earlier, the major benefit of prepaid forex cards is the ability to lock your forex rate beforehand. However, one has to understand that forex rates don’t change drastically overnight like stocks. Thus falling into the lure of savings on foreign exchange fluctuations, one ends up spending a lot more on fees and other charges.
Apply for Niyo Global card using the link THIS LINK and we both get INR500, on first international transaction of 1000.
In the interest of full disclosure, Credit Cardz may earn a referral bonus for anyone that’s approved through some of the links in this post. However, opinions and views expressed here are of the author's alone and not those of the bank, credit card issuer, or anyone else and have not been reviewed, approved or otherwise endorsed by any of these entities.
First of all Niyo Global by dcb is not free.. They charge 236 INR for joining and for next year annual maintenance 236.
2. There is TCS charges which they’ll deduct (5% of transaction amt) on every international transaction whether its cash withdrawal or pos. However its refundable but have to wait for next 7 to 12 days. (if your expense is under 7lacs inr per financial year.)
Are you sure about this? Almost every where on the internet, it is mentioned that it is free for lifetime without any charges. I don’t have this card yet but i am planning to get it soon.
What Ansh is saying is correct that now Niyo is charging 200 as annual fee. It gets reversed on spending a particular amount in the year.
The TCS thing appears more a government regulation, so i believe other prepaid card issuers would be doing the same.
5% tcs only if you exceed 7.5 lakhs per financial year. i suggest using multiple niyo accounts if you have that use
one of the major problem with Niyo card is “getting the card” 😀 They only do KYC in major cities. If you dont want to travel to major cities and get the same benefits as Niyo card i would recommend getting Thomas cook borderless card. (cons are : supports only nine currency and you will have to pre load the card)
can you please compare Amex platinum travel credit card With SBM Niyo global
do we need to provide any document for TCS refunds ? how will niyo dcb know that w e have spend less than 7 lakh if FY is just started ?