Mankind has evolved tremendously. The fact that all facets of human lives have undergone astounding changes cannot be denied. One of these changes is the use of money and how we trade with each other.

Once the concept of currency was established, the exchange of goods through the barter system collapsed. With time, the concept of currency shifted from coins to paper/plastic money, and eventually to cashless monetary transactions. Now, we have reached a state where a completely cashless society looks achievable.

You may think that a cashless society is something out of fiction, but it’s already on its way. Several financial ecosystem players such as the government and large financial institutions are working towards building a cash-free society. However, no society has gone completely cash-free, just yet. In addition to challenges in proper planning, several social issues need to be solved before cash can be given up totally.

As our country has started to move towards a cashless environment after demonetization, the confusion and awe have given way to a flurry of concerns. Will the emphasis on digital transactions provide tangible benefits and convenience or just add to additional charges and stress?

The list below can give you an idea of the myriad of benefits of going cashless. Before we jump into the benefits, let us understand what exactly is a cashless society.

What does a cashless society mean?

A cashless society is one where all or most financial transactions are executed digitally, without the physical exchange of bank notes. In a cashless society, electronic forms of payment such as debit and credit cards, payment apps, mobile wallets, internet banking, and other forms of digital payments are used.

The concept of a cashless society is being discussed widely, mostly because the world is experiencing an increasing and rapid use of digital methods of recording, exchanging, and managing money in an investment, commerce, and daily life. Historically, the transactions which would have been undertaken with cash are now undertaken electronically.

The beginning of the cashless society

The trend of non-cash transactions began during the 1990s with the popularity of electronic banking. By 2010, various digital payment methods were widespread in many countries, with examples including intermediaries like PayPal, contactless and NFC payments by smartphone or electronic card, electronic bills and banking, and digital wallet systems such as Apple Pay.

At this point, cash had become unfavorable in some kinds of transactions- the ones which would be very ordinary to pay with cash in the past. Larger cash amounts were even treated with suspicion because of its ease of use in financing terrorism and money laundering.

By 2016, the value of cash transactions started to decline. The move away from cash can be attributed to technology. With the advent of smartphones, everything has become convenient- from buying groceries to transferring money internationally.

Benefits of a Cashless Society

There is no denying the fact that we are already moving towards a cashless society. This brings us to the question ‘Why do we even need a cashless society’? Well, the answer is pretty simple – it has many benefits.

Primarily, cashless transactions are quick and very convenient when compared to cash transactions. Furthermore, the need to carry and count cash before every transaction is eliminated in a cashless society.

However, like all other things in life, a cashless society also has its pros and cons. But in this case, the pros definitely outweigh the cons. The benefits of going cashless are enormous and constructive.

We may feel content knowing there is cash in our wallets, but there are greater advantages of going cashless.

Convenience

The ease of conducting digital transactions can be considered the biggest motivator for going cashless. You will no longer need to carry cash, cards, or even stand in queues at the ATM for withdrawals. It is also an easier and safer spending option while you are traveling.

Going cashless gives you the freedom to transact whenever and wherever you wish to. You won’t have to be physically present for conducting a transaction or be forced to make a transaction during office hours only.

Discounts

The government provides incentives like a waiver of service tax on card transactions up to Rs 2,000 to promote digital transactions. There are several other cuts and freebies. So, it is the perfect time for you to increase your savings and take advantage of these. For instance, there is a 0.75% discount on the purchase of fuel through digital payment methods.

Similarly, paying through digital means can help you cut your costs and save on highway toll, purchase of insurance, or rail tickets. Add to these the cashback offers, discounts, and rewards offered by mobile payment platforms like PhonePe, Paytm, HOP as well as the loyalty benefits and reward points on credit and store cards.

Lower Crime Rates

People that carry cash make an easy target for pickpockets. Cash registers or tills have been a source of violent crime. It puts bank and shop employees at risk of hold-ups. This risk is substantially lowered by going cashless. It also means that businesses don’t have to employ security guards or cameras. Also, once the money is stolen, it becomes difficult to track that cash or prove that it was yours.

Automatic Paper Trails

Similarly, there are great chances that financial crimes will dry up as a result of going cashless. Illegal transactions like gambling or drug operations, mostly use cash as it leaves no record of the transaction, and also cash is easier to launder. Money laundering becomes difficult when the source of funds is clearly identifiable. It is also hard to hide income or evade taxes when there is a clear record of every payment made or received.

Tracking spends

When all the transactions are recorded, it becomes easier for people to keep track of their expenses. Going cashless also helps while filing income tax returns. It also makes it easier for people to explain their expenses during audits.

With the help of the apps such as ‘Hop-Money Matters’, people can track their expenditure at a glance. The expenses are categorized to make it even more convenient for its users. It helps them in understanding where their money is spent, where they need to cut down, and where they can spend a little more. Basically, it gives them the power to analyze and understand their expenses and develop useful habits like budgeting which is favorable for them.

Budgeting

As we already know, going cashless leads to records of each transaction you make. These records help you in keeping tabs on your expenses which gradually results in better budgeting.

When the amount of cash that flows out does not equal to what flows back in and people keep track of their expenses on mobile wallets and cards, it will result in budget discipline. Controlled spending may also result in higher investing.

International Payments

Going cashless seems to make everything so much convenient! While traveling, you need to exchange your Rupee for the local currency. However, if you’re traveling to a country that has moved towards cashless transactions, you won’t have to worry about the exchange rates or how much local currency you’ll need to withdraw. Instead, apps such as ‘Hop-Money Matters’ app, help you to use your mobile device for hassle free currency exchange.

Lower risk

Going cashless lowers the risk of theft and fraud. If stolen, blocking your mobile wallet or card is very easy. This is helpful while traveling, especially abroad, where if you lose cash, it can cause great inconvenience. Apps now a days allow you to block/unblock, freeze/unfreeze, and reset your pin with just a tap.

Besides, futuristic cards may evolve to use biometric IDs like fingerprints, eye scans, or others. This will make it extremely difficult to commit frauds, making it a very safe option.

Your money grows

Going cashless helps you earn a little extra. If you put your earnings in even a bare-bones savings account, you will earn some interest. Plus, you can also make investments in mutual funds, fixed deposits, and others which can get you good returns over some time. Also, the value of cash diminishes over time because of inflation and so, investing your savings is considered the best option. Example: Rs 500 will buy you fewer things today than it would have before five years.

What Does a Cashless Society Look Like?

Going cashless leads to electronic payments. In a cashless transaction, you authorize the transfer of funds from a bank account to another person’s account instead of using paper and coins to exchange value. The logistics are still under processing, but these are a few hints as to how a cashless society will evolve.

Debit and Credit cards are the most popular alternatives to cash that is used today. But, cards alone are not enough to support the cashless society completely. Mobile devices are likely to become a primary tool for cashless payments.

Electronic payment apps like the ‘Hop-Money Matters’ app, is very helpful in making person-to-person or person-to-business payments. Also, there are many bill-splitting apps that allow friends to split bills and pay very easily.

Mobile payment services and wallets like the Hop app wallet, GooglePay, Paytm, and many others provide secure, cash-free payments. Many nations that use cash sparingly have already seen mobile devices become a common tool for payments.

Cryptocurrencies have also been a part of the discussion. They’re already being used for money transfers, and they also introduce innovation and competition that helps in keeping costs low. However, there are some risks and many regulatory hurdles (in India) that make them impractical for many users, so they may not be available for widespread use, yet.

The bottom line

The Modi Government’s decision about demonetization for curbing the black money menace has proved that going cashless is possible in India. Post demonetization, India has seen a 55 percent rise in overall digital transactions, with mobile-banking rising by a whopping 122 percent. The government’s agenda in building a ‘cashless’,’paperless’ and ‘presenceless’ economy certainly seems to be taking shape.

Since the demonetization, the Indian Government has been encouraging going cashless like never before, giving the digital currency a new hope. Programs like Digital India and Pradhan Mantri Jan-Dhan Yojna (PMJDY) have been successful in getting more people under advanced banking.

Better internet speeds, increasing mobile usage, affordable data plans, and fast-spreading awareness are among other key drivers of going cashless in India. More helpful plans must be in the making to drive this going cashless trend in India, provided there is equal support from the regulatory bodies.

About HOP

Hop is India’s first cross-border neo-banking platform providing a mobile-first digital banking experience to Indians. Our ‘Hop-Money Matters’ app allows you to transfer, spend, save, budget, invest all on a single app via its:

‘ONE GLOBAL ACCOUNT’ – ‘ONE GLOBAL CARD’

Everything happens on the app: You are digitally onboarded and instantly issued a multi-currency bank account and the virtual card.
The Hop app comes with smart-card control features and on-app spend analytics. HOP card is an all-in-one card; Debit card + Credit card + FX card.
Smart savers account gets you to save with every transaction and invest in mutual funds with one click. You can also do on-demand 0% mark up currency exchange on the app.

Why go to a physical bank when you can fulfill all your banking needs anytime, anywhere?

Now you have ‘One app to do it all’.

Download our ‘Hop-Money Matters’ app and start making more out of your money!

Why is investing important?

Money is an essential part of everyone’s life. Usually, everyone earns and saves for their future. This is important since the savings from salaries and lump sum bonuses might not be enough to see one through their working and retirement life. Instead of investing, if these savings are left in your pocket, the money won’t grow. Investing is how money reproduces. Therefore, investment is very important for wealth creation. Here are a few other reasons why you should invest:

Opportunity Cost

Not investing now has an opportunity cost. It can make you lose out on the potential gains you could have made by investing. Investing your money involves a tradeoff where you refrain from spending the money now for a potential higher utility in the future.

Diverse sources of Income

Stock investment can get you returns in the form of dividends or capital gains. Investing in a bond can benefit you through regular payouts or coupons. Investments made in real estate benefits an investor through capital gains and/or rental income.

Retirement Plan

The majority of people invest in having a peaceful retirement. As most of the earning population depends on their salary for meeting their needs, it can be difficult to sustain their lifestyle after retirement in the absence of investing. Therefore, it’s a good idea to invest at least a part of one’s income during their working years. This ensures a nest egg during the retirement years.

Tax Efficiency

Investing is also known to help in saving taxes. There are accounts like the TFSA, RRSP, 401k, Roth IRA, and many others where the tax on investment is very low or non-existent. As the government has reduced its responsibility in offering funding for citizens during retirement, they have started these accounts so that the citizens can contribute and fund their retirement.

Overcome Inflation

Investing plays an important role in overcoming inflation. If you haven’t invested your money, the money’s purchasing power will decline as inflation eats away the value of money. Due to inflation, the real return on your bank deposits (interest rate adjusted for inflation) may even be 0% or negative. In order to insure yourself against such situations, one can start investing in a mix of assets to help beat inflation.

Reach Your Financial Goals

Investing is the best way to achieve your financial goals. New financial requirements come up as an individual grows through life. In most cases, it begins with buying a house. Even if you are funding the house through a loan, a substantial down payment is required. An individual can build up the down payment required through his investments. This is just a simple example and there are many other ways where investment can help you reach your financial goals.

Create Your Investment Goals

Learning how to set investment goals is very important. It helps the investors in keeping track of where they were, where they are, and where they are going. These investment goals help in building a long-term roadmap towards financial freedom.

Saving money to buy something is a tale as old as the hills. Doesn’t matter if you are a ten-year-old wanting a new bike or an adult seeking a new house, we all have experienced trying to save up for something. These early experiences promote beliefs and habits that last a lifetime, although the challenges may multiply.

Though investments are a natural extension to savings, an analogy can be drawn between savings and investment in how both start with a goal in mind. Savings and investment both are habits best inculcated as an early age. You start with setting a specific financial goal. What do you want to achieve? How long will achieving it take? What are the steps for achieving it?

Once you’ve understood what is important for you, you will need to find out which goals are achievable in a short, mid-range, and long term. After this, you will need to develop a Specific, Measurable, Achievable, Relevant, and Timely (SMART) strategy along with a set budget for achieving it.

What are the investment goals?

Investment goals can be of various forms, but they are more concrete and not just generic notions. In most cases, investment goals are spread into three branches, depending on income, age, and outlook.

Income is the natural starting point for investment goals as it is not possible to invest what you don’t have. The outlook is the playing field on which you operate during your lifetime, the choices you make that impact the way you manage your wealth. Family planning and career are at the top of this list for most people. Fortunately, it is never too late to start investing. You may be in your 20s or 40s when you realize that life is moving too quickly and you need to start thinking about your retirement.

All investments begin with the first rupee set aside for it, whatever your income, outlook, or age. A few reasons to set investment goals may be:

Preserving your money or for maintaining your net worth.
Generating enough income so that it can supersede or replace your working lifestyle (retirement).
Potentially increasing the amount of active return your investment generates.
Defining an explicit purpose for investments.

While it is always easier to figure out the broad goals, narrowing them down has its advantages. Therefore, it can be beneficial to translate a goal such as aiming for financial stability or putting your kids through college, into the expected outcome in number terms. This will give you a more realistic perspective.

Why are investment goals important?

Although there are several investment options where you can start investing online within minutes, hasty investment decisions may not bear the desired results. If you are looking to be a successful investor, you cannot skip tying your investments with your financial goals.

A goal-less investment is like a ship navigating in the wide sea with no idea of the route and destination. If you are trying to understand the importance of investment goal setting, here are some important reasons-

Provides a Clear Vision

When you have a clear vision of your financial and investment goals, it adds confidence and clarity to your investment decisions. It helps in better control and management of your finances, keeping you prepared for the various phases of life.

Building Investment Strategies
Understanding the importance of goal setting helps in building effective investment strategies. Your investment strategies can be customized as per your requirements, keeping your financial responsibilities and expenses in mind. You will be better prepared for making informed financial decisions once you are sure about your financial and investment goals.

Provides Motivation
Motivation plays an important role in life. There is a lot of motivation when you know your target. It also encourages you to work harder for it. Motivation also has a positive impact on your earnings and helps you in making better decisions when it comes to your professional life.

Makes Asset Selection Easier
Different investments types suit different risk appetites and time horizons. So, with a set investment goal, it is easier to select the best suitable form of investment for you, as you know what you want from the investment and how much time you have to achieve it. For instance, if you are planning to buy a house next year, you will know that direct equity investment is not right for you as it is slightly riskier and mostly recommended for long-term goals.

Steps in making an Investment Goal
These steps will help you in understanding your investment goal:

Assess Your Current Situation
The first step in making an investment goal is to define your present financial condition. You need to know how much money you have for investing. You can assess your current financial situation by making a budget for evaluating your disposable income after expenses and emergency savings (if you have any).
You must also consider how accessible, or liquid, you require your investments to be. This will help you in figuring out how much and where you can afford to invest.

Define Your Goals
The next step is to define your financial goals. This requires answering questions like why am I investing?, What do I want the extra income for? It can be anything from buying a car to retirement planning.

You also need to define a timeline – How quickly do you need to earn money from the investments? Define the time horizon over which the liquidity event needs to occur.

Your goals can be summed up in three main categories: short-term, mid-term, and long-term financial (Discussed in detail later on in the article). It is an important step toward financial security. If you are not working towards a specific goal, you may end up spending more than you need to.

Determine Your Risk Tolerance
The next step in crafting an investment goal is deciding the ability and willingness to take risk. Ability should always supersede willingness. Normally, you can take more risk the younger you are, as your portfolio has a lot of time to recover from the losses (if any). If you are older, it is advised to invest in less volatile instruments. Typically the portfolio weight shifts from equity to bonds with age.

Decide where to Invest
The final step is deciding where you should invest. Your budget, goals, and risk tolerance will guide you towards the best types of investment. Make sure to diversify your portfolio wherever you decide to invest.
For example, you do not want to put all of your money into stocks as it puts you at risk of losing if the stock market crashes. It is always best that you allocate your assets to a portfolio to variou instruments that match your goals and risk tolerance, as it maximizes your growth and stability.

Monitor Your Investments
Once you are done making your investments, it is not advised to leave them alone. You must check how your investments are performing and then decide if they need rebalancing. This will help you in determining if you are on track for reaching your goals or if the portfolio needs any adjustment. Depending on how the investment is performing, the expected risk-reward may get out of order and might need a revamp.

You must go through these assessment steps, preferably every quarter, to ensure everything is working according to your plan. You should make any necessary changes and adjustments to continue to work towards your goals.

Long, Mid-term, and Long term Financial goals
So how can you figure out investment goals which suit your needs? Putting yourself in the right frame of mind makes it easier to get started. In simpler terms, you must be proactive about the financial factors that influence your life.

Visualizing the future you need is the first step towards achieving it. Here are Short, Mid-term, and Long-term goals that financial experts recommend setting up for a systematic approach.

Short-Term Goals
Short-term goals are narrow in scope and have a very limited time horizon. However, short-term goals help in adjusting your spending habits and gaining control of your budget. Short-term goals include getting away from unnecessary spending. It can also give you a confidence boost and the foundational knowledge that you need for achieving larger goals that take more time.

Short term goals are relatively easy to achieve. Here are a few short-term goals that will help you right away, and get you on track for achieving your long-term goals.

Mid-Term Goals
Once your budget is created, an emergency fund is established, and the credit card is paid off, or at least you have made a good dent in your short-term goals— the time comes for working towards mid-term financial goals. These goals act as a bridge between short and long-term goals. These goals may take 3-5 years to achieve.

It is advised that you use SMART planning. You need to avoid setting your sight too high as it may lead to frustration and then failure. Examples of mid-term financial goals can be:

Long-Term Financial Goals
The supreme long-term financial goal is funding for a comfortable retirement. The rule of thumb is that you need to try and save 10-15% of every paycheck. This saving must be put into a tax-advantaged retirement account like a 403(b), Roth IRA, or 401(k). To make sure you are saving enough, you will need to find out how much you’ll need after retirement. This can be done by:

Other long-term financial goals can be:

Execution & Monitoring
Based on the specific investment goals defined, you need to select the appropriate asset allocation model which has the risk-reward profile in-line with the goals and the timely liquidity cycles to meet your requirements. It is also important to review the investments on a ongoing basis, measure the delta between the expected returns and realised returns and course correct.

The bottom line:
You may not always make linear progress towards achieving all your investment goals, but what matters is being consistent. You may get hit with an unexpected medical bill or car repair because of which you need to take some money out- don’t beat yourself up for it. All you need is to get back on track as soon as you can.

That’s the beauty of planning: You can always review and update your investment goals. You can monitor your progress and reach them through the ups and downs of life.

Also, keep in mind that it is best to set investment goals as early as possible. This is because waiting for too long may introduce complications that may be difficult to overcome. Investment goal-setting, planning, and it’s execution require a level of commitment and discipline that may make you uncomfortable. You can start small if you find the process to be overwhelming. Remember that investment is a lifetime event and it demands careful planning at every stage, but the payoffs are equally rewarding.

Are you wanderlust, an explorer, or an adventurer? Amidst the disparities of a global pandemic, do you still aspire to unveil beyond the horizon? Do you dream of witnessing the setting sun or gazing at the twinkling stars? Travelling isn’t a luxury; it’s a way to unwind your mind and break the monotony of daily life chores. The good news is that even when various countries are still openly fighting off this virus, the travel and tourism industry is gearing up for a fresh start. Will travel experience be the same as before, or Millennials will experience a whirlwind excitement as they voyage on their international trips in a post-COVID world? Let’s find out!

The after-effects of Covid-19 on Travel

 By now, all of us are aware that the fight with Covid-19 is a long battle. While we can’t put a complete halt to our everyday life, there are certain aspects that you can expect as an aftermath of this deadly virus. In the last six months, owing to the global pandemic, the travel, and tourism sector have witnessed significant changes, especially with the reduction of travel trips.

 With the increased number of work from home and online courses, Millennials incline to stay at home with families. This has resulted in fewer work trips, educational trips, or even hanging out with friends. As for those who are embarking on short or long trips across the globe, a new spectrum of travel waits for you!

 

Besides, several restrictions have been imposed on traveling to various countries to avert the risks of a pandemic outbreak. While the travel and tourism industry has undergone an unprecedented crisis with a 60% decline in international tourism, which is expected to increase to 80% if the recovery rate delays post-December, some countries are gearing up to embrace visitors from across the globe.

 

Countries reopening tourism amidst global pandemic

 With lockdown ending in most parts of the globe, it’s time to unwind from a sedentary lifestyle and explore nature. Here are a few countries that are opening their gates for international travelers.

 

 From July 1, 2020, Albania has opened its international borders to welcome tourists across the globe. Visitors traveling here need not undergo any test or mandatory quarantine, although a temperature check at the airport is still compulsory.

 

 The country reopened its international borders from July 29, allowing all nations but has varied entry requirements based on residence. While travelers from EU nations are allowed without undergoing quarantine, all other visitors need to undergo mandatory 15 days quarantine.

 

 From August 21, 2020, Anguilla is allowing international visitors, but travelers must have an online approval with a PCR test report before they arrive. They also need to undergo 10days mandatory quarantine in their accommodation upon arrival.

 

 Reopening its border for international tourism on June 4, the country welcomed its first international flight after the outbreak of Covid-19. Travelers have to undergo a PCR test upon arrival.

 

 From August 12, Armenia is welcoming tourists from all nations. Travelers, however, need to undergo a mandatory 14-day quarantine, which can be shortened if they opt for a PCR test upon arrival. If the results declare negative, you are free to explore the exotic beauty of Armenia.

 

 Officially opening its borders for tourism from June 16, Austria is extending its warm welcome to all European Union countries, except Spain, Sweden, Portugal, and the UK. Travelers from the EU nation need not undergo testing or quarantine while visiting Austria.

 

Plan your trip to the Bahamas’ exotic beaches as the country resumed international tourism from July 1. But you need to undergo a mandatory PCR test and quarantine procedure.

 

 Explore the human-made marvels at Dubai as UAE officially opened international borders from July 7. Before traveling to Dubai, travelers must carry a negative PCR test report, which must not be more than 96 hours old before arrival.

 

 According to the UK government guidelines, the country has started operating international tourism from June 8. But travelers and citizens returning overseas must undergo the mandatory quarantine of 14 days before starting their vacation.

 

 Leading in the world meters list of the most affected countries during a pandemic, the USA didn’t ban international tourism. However, it has suspended granting tourist visas for citizens hailing from China, Iran, Brazil, and Europe.

 While US Virgin Island had earlier opened its tourism border from June 1, allowing international and American travelers, owing to an upsurge in the Covid-19 cases, the country has levied a 30-day prohibition on tourism from August 19. Even Ukraine has shut its tourism gates from August 29-September 28 to curb the rising cases of Covid-19. However, in the first week of September, countries such as Zambia, Panama, Honduras, and Kyrgyzstan have added to the existing list of countries open for tourism. Statistics reveal that worldwide nearly 26.9 million people have been affected, out of which 17.9 million have recovered. The reopening of international tourism is solely dependent on each country’s government regulation. So before you embark is best to do due to diligence about the destination.

Things to remember before selecting your destination

 While there are still lurking fears of Covid-19, confinement in the four walls can take a toll on your mental and physical health. But before finalizing your travel destination, there are certain aspects you must ponder upon.

 

 Budget is one of the most crucial aspects while narrowing down on travel destinations. Accommodation, transport, and flights comprise the most expensive elements in a trip, and with the lurking fear of Covid-19, it is best to select accommodations that are maintaining all safety measures. So before you choose your destination, it’s essential to know your budget.

 

 The duration and timing of the trip affect the destination and budget of a trip. While longer trips are usually expensive, especially the flight rates, it can even turn out cheaper with added discounts on accommodation. Besides, the climate plays a pivotal factor in choosing a destination. This is because, during peak season, there is always a hiked up price than the rest of the year.

 

 Do you like the serene ambiance amidst the white snow or the sun-kissed pristine beaches of the Caribbean? The type of wanderlust you are determines your travel destination. While some prefer an exotic vacation amidst the Amazon rainforest, others prefer the glittering lifestyle and the skyline high-rises of New York.

 

 Your travel companion is also a determining factor when it comes to selecting a travel destination. If you opt for a vacation with family, you must not only prioritize everyone’s preference but also find the top-notch accommodation for their safety. However, embarking on a solo sojourn seems a feasible option for the adventurous minds who like to voyage on backpacking trips.

 

 It is imperative to consider the purchasing power of the chosen travel destination’s currency to bear food and transportation expenses. It is a key determining factor that can affect the budgeting of your entire trip. With the financial losses incurred amidst the pandemic, you can opt for countries with weak exchange rates that make them highly affordable.

 

 As your mind craves to break the shackles of confinement during the global pandemic, is there any specific destination you want to return? Or the explorer in you screams to unveil a new destination to add in your travel bucket list? Your preference takes precedence in determining your destination of travel.

 

Apart from these parameters, certain external aspects also play the determining agent for selecting a destination. While there have been existing norms of applied visa and visa on arrival for some countries, post-pandemic, some other travel regulations have also been imposed on the popular touristic hubs. Also, while selecting a place for travel, it is best to avoid the ones highly infected with Covid-19 for ensuring the health safety of you and your loved ones. Your travel destination is also characterized by the type of accommodation, transportation, and activity you opt for.

 

 Do you plan on voyaging for a road trip, flying, or driving? As most people are skeptical about taking public transport for traveling, there has been an increasing demand for adventurous road trips. Apart from seamless aiding you to reach your destination, you may explore numerous unnamed sightseeing spots on your way. Besides, road trips seem safer for those who want a secured traveling experience either solo or with family. Following the safety protocols, some countries are allowing international flights for tourism. If you plan to hop on one such flight to reach your dream destination, make sure to follow the guidelines set by the aviation industry and the tourism industry of the chosen destination. From getting mandatory Covid-19 testing before boarding, checking temperatures, and wearing masks throughout the flight trip, these are now some of the protocols travelers must abide by. After reaching your destination, if you plan to take car rentals to drive around and explore, select the ones with a high reputation in maintaining sanitation efforts during this pandemic.

 

 When it comes to selecting an accommodation type, there are a plethora of options that benefit every kind of traveler. So in a post-pandemic world, know what’s best suited for your requirement. If you want a luxurious gateway, select the top-notch hotels that offer every modern-day amenities, and follow stringent guidelines to maintain hygiene. Besides, post the outbreak of Covid-19, hotels have leveled up with the cleanliness or hygiene protocols. For those who want some relaxing time alone or with a family with minimal interaction with other staff or prefer contactless check-in, vacation rental apartments are increasingly in demand. If you are an outdoorsy type, let’s go camping and trekking on a voyage to the unknown. 2020 has proved to be one the best year to hit the trails and embark on solo camping trips.

 

 One of the imperative aspects of traveling is savoring the delicatessens of the local cuisine and selecting the perfect restaurant for dining out. To ensure health safety, it is best to opt for hygienic restaurants where you can choose a takeaway or choose an outdoor seating arrangement to minimize coming in contact with others. If you are going on camping trips, you must have a healthy meal, clean all your fresh fruits before consumption, and sanitize the area before you start to cook. Carry a lot of tissues, paper soap strips, and use disposable cups and dishes. It is a friendly gesture, but as you travel during the tough times of COVID, avoid sharing meals or using the same plates or cups.

 While some touristic hotspots offer limited capacity or are reopening at a different pace, it is necessary to plan your sightseeing activities based on availability. You must also have a backup sightseeing option in case your preferred one is unavailable. During this pandemic, it is also necessary to plan COVID conscious activities such as avoiding crowded places or heading places early having limited access.

 

Prepping for the trip

 While you have been diligently indulging in pre-travel prep all your life, for traveling in 2020, you might want to be extra cautious about what to pack to have proper insurance coverage and checking your finances.

 

 Having travel insurance is one of the best ideas while embarking on foreign destinations, but if you are purchasing insurance concerning Covid-19 impact, read the terms carefully as it differs according to companies. Before investment, also check for the coverage limit your credit card offers. There are also certain hotels and airlines offering flexible policy change and cancellation facilities if there are some last-minute adjustments to your trip.

 

 While hotels, airlines, and rental car companies are offering utmost priority in maintaining hygiene and sanitization protocol, here are some of the essential things you must carry on your trip.

 

 

 Are you stuck overseas with the sudden declaration of immediate lockdown? Or did your finances exceed your budget limitation? Falling in such a financial crux need not need a global pandemic to occur. To ease the peril of the international traveler’s MoneyHop, a new-age cross-border neo- bank, offers a one-stop solution for a seamless, economical way of exchanging money. MoneyHOP allows you to enjoy a delightful global banking experience by providing ‘One Global Account – One Global Card’. It offers you a multi-currency bank account with the ability to conduct on-demand currency exchange at near 0% mark-up on the app. Enjoy credit, savings, investments, FX – all on one account.

 

Introduction

Gold and the US Dollar have a historic relationship from way back when the gold standard was being used. In 1900, the gold standard started and it ended in 1971. During the time of gold standard, the value of a currency was tied with the amount of gold held as reserves. In the gold standard regime, the relationship between gold and the US Dollar was strictly inverse. Post the regime the relationship is not as precise as it used to be, but whenever the value of the US Dollar decreases, gold prices rise.

In 2008, the IMF estimated that since 2002, around 40%-50% of the movement in gold prices is related to the US Dollar i.e. whenever there is a 1% change in the effective external value of US Dollar; the gold price will change by more than 1%.

Gold is generally considered as a protection against inflation. High inflation and negative real interest rates in a country have led to a rise in demand for gold. This is because when the real interest rate is negative, inflation eats up the value of financial investments. This was the case in India a few years back when RBI targeted WPI (Wholesale Price Index) as a general parameter for inflation, which was lower than CPI (Consumer Price Index) at that point in time.

Gold Rush - moneyHop
infographics credit: canva.com

Although US Dollar and International Gold prices have an inverse relationship i.e. whenever USD strengthens; international gold prices fell. Gold prices quoted in Indian Rupee also have an inverse relationship with Indian Rupee, which in a way means a direct relationship with USD. India is a trade deficit country i.e. the country imports more than the value of what it exports. On Indian Rupee depreciation, the value of imports rises, which directly impacts inflation as production costs rise. For example, a company in India that imports its production supplies from the US at an exchange rate of 74 USD/INR. In order to buy one unit of production supplies, the company will have to shell out INR 74. If US Dollar appreciates by 10% and USD/INR is traded at 81.40 USD/INR, at this level of US Dollar to Indian Rupee exchange rate the company will have to shell out INR 81.40 to import the same amount of production supplies, which means the production cost for the company has increased by 10%. This indicates an inverse correlation of INR external value with inflation and as the inflation rises the demand for gold increases. In India, 81% of gold demand comes from jewellery and investment and just 9% is used for industrial purposes. There is also a case when the US Dollar and Gold follow a direct relationship. This happens when there is a crisis in countries other than the US, which increases the demand for safe-haven assets.

From India’s point of view, a crisis occurred in mid-2013, when India’s macros were weak as CAD (Current Account Deficit) touched record high levels of 4.7% of GDP, GDP growth rate slowed down to sub 5% level and inflation was on a steep upward trajectory. The US economy on the other hand was showing signs of recovery and the Fed was planning to taper its quantitative easing program. Slowing of the Indian economy and recovery in US-led to flight to safety as investors were looking for safe-haven assets, which increased the value of gold and the US Dollar simultaneously.

In the recent past since the spread of the novel coronavirus disease (COVID-19), we have seen a surge in the prices of gold from ~48,000 USD/Kg (16th March, 2020) to around 66,000 USD/Kg (6th August, 2020) which is a 37.5% hike. One of the primary reasons for this run could have been the near-zero interest rates on Government bonds and high volatility in the stock market. These two factors might have driven the investors to a safe-haven asset such as gold.

It’s apt to say that gold is an important instrument of wealth accumulation in India, either directly (through investments in mutual funds tracking gold indices) or indirectly (through the purchase of jewellery or bullion). However, one should keep in mind that there are various factors affecting the price of gold such as the state of the economy, macro-economic conditions, geo-political stability, exchange rate fluctuations amongst many others which should be given due consideration before investing in gold.

Introduction

An exchange rate (also known as conversion rate) between two currencies is the rate at which one currency can be exchanged for another. Exchange rates play an important role during a country’s level of trade, which is critical to almost every free enterprise within the world today. Therefore, exchange rates are among the foremost monitored, analyzed, and governmentally controlled economic measures. Exchange rate matters not just on the large macroeconomic scene but also on a smaller one. It impacts the real return of an investor’s portfolio, the profitability of firms, growth of specific sectors amongst various other determinants of the economy.

The Indian rupee, which was linked to British Pound, was at par with the American currency at the time of Independence in 1947. There was no foreign borrowing on India’s record. In order to finance development and welfare activities, with the introduction of the Five-Year Plan in 1951, the government started to borrow externally. This required the devaluation of the rupee. After independence, India chose to adopt a hard and fast rate currency regime. USD to INR was at 4.79 between 1948 and 1966. India faced a significant balance of payment crisis in 1991 and was forced to sharply devalue its currency.

The country was within the grip of high inflation; low growth and therefore the foreign reserves weren’t even worth to satisfy three weeks of imports. Under this situation, the currency was devalued to 17.90 against a US dollar. Indian Rupee has depreciated by a little more than 74 times against the greenback in the past 73 years. On July 22, 2020, USD to INR had gone down to 74.84 and is expected to fall further. This volatility became severe within the past few years affecting major macro-economic data, including growth, inflation, trade, and investment.

Factors that affect exchange rates

The foreign exchange rate plays an important role in the economy of a nation. Factors that affect the fluctuation and variation in the exchange rate –

  • Inflation Rates
  • Interest Rates
  • Country’s Current Account/Balance of Payments
  • Government Debt
  • Terms of Trade
  • Political Stability and Performance
  • Economic cycle (expansion, recession, peak or through)
  • Speculation by the market participants, banks, importers and exporters etc.

Effect of Crude Oil on the exchange rates

    Crude oil is quoted in US Dollars. So, each uptick and downtick within the dollar or within the price of the commodity generates an instantaneous realignment between the greenback and various forex crosses. These movements are less correlated in nations without significant petroleum reserves, like Japan, and more correlated in nations that have significant reserves like Canada, Russia, and Brazil. India imports its major share of petroleum from Iraq, Iran, and Saudi Arabia and pays for it in US dollars.

    Oil prices and imports are rising continuously. This pushes up the demand for the US Dollar, which strengthens the US Dollar against the Indian rupee, and therefore the Indian rupee is continuously depreciating. This erodes the purchasing power of the Indian currency within the international market. The domestic oil supply augmentation and control over oil demand seem to be a viable policy choice to overcome the rate of exchange depreciation and its consequences.


    Chronology of India’s exchange rate policies
    • 1947 (When India became a member of IMF): Indian Rupee tied to pound, INR 1 = 1 s, 6 d, rate of 28 October 1945
    • 18 September 1949: Pound devalued; India maintained par with the pound
    • 6 June, 1966: Rupee is devalued, $1 = INR 4.76 , after devaluation, $1 = INR 7.50 (57.5%)
    • 18 November 1967: the UK devalued pound, India did not devalue
    • August 1971: Indian Rupee pegged to gold/US dollar, international financial crisis
    • 18 December 1971: US Dollar is devalued
    • 20 December 1971: Indian Rupee is pegged to pound sterling again
    • 1971-1979: The Indian Rupee is overvalued due to India’s policy of import substitution
    • 23 June 1972: the UK floats Pound, India maintains a fixed exchange rate with Pound
    • 1975: India links Rupee with a basket of currencies of major trading partners. Although the basket is periodically altered, the link is maintained until the 1991 devaluation.
    • July 1991: Indian Rupee devalued by 18-19 %
    • March 1992: Dual exchange rate, Liberalized Exchange Rate Management System
    • March 1993: Unified exchange rate: $1 = INR 31.37
    • 1993/1994: Indian Rupee is made freely convertible for trading, but not for investment purposes
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    USD to INR Rates Table
    1991 – 2000’sIn 1991, India still had a hard and fast rate of the exchange system, where the rupee was pegged to the worth of a basket of currencies of major trading partners. At the top of 1990, the government of India found itself in serious economic trouble. The government was just on the brink of default and its exchange reserves had dried up to the point that India could barely finance three weeks’ worth of imports.

    Similar to 1966, high inflation was there along with large government budget deficits and a poor balance of payments position. At the beginning of 1985, the problem with the balance of payments began in India. Even as exports continued to grow through the last half of the 1980s, interest payments and imports rose faster in order that India ran consistent accounting deficits.

    Additionally, the government’s deficit grew to an average of 8.2% of GDP. As in 1966, there was also an exogenous shock to the economy that led to a pointy worsening of the already precarious balance of payments situation. In the case of the 1991 devaluation, the Gulf War led to a much higher import thanks to the increase in oil prices. The trade deficit of US $9.44 billion was incurred in 1990 and the current account deficit was US $9.7 billion. Also, foreign currency assets fell to US $1.2 billion.

    However, as is the case with the India-Pakistan war of 1965 and further the drought during an equivalent period, India’s financial woes can’t be attributed exclusively to events outside of the control of the government this time. Since the Gulf War had international economic effects, there was no reason for India to be harmed quite like other countries. Instead, it simply further destabilized an already unstable economic situation brought on by inflation and debt. In July of 1991, the Indian government reduced USD to INR value by around 18 to 19 percent. A change was brought in the national trading policy by the government where it went from being highly restrictive to freely tradable EXIM scrips.

    It allowed exporters to import 30% of the worth of their exports. In March 1992, the government decided to determine a dual-rate of exchange regime and abolish the EXIM scrip system. Under this regime, the government allowed importers to buy some imports with the foreign exchange valued at free-market rates and other imports might be purchased with the foreign exchange purchased at a government-mandated rate. In March 1993, the government then unified the rate of exchange and allowed, initially, the rupee to float. From 1993 onward, India has followed a managed floating rate of the foreign exchange system.

    Under the present managed floating system, the rate of exchange is decided ostensibly by the economic process, but RBI (Reserve Bank of India) plays a big role in determining the foreign exchange rate by selecting a target rate and buying and selling foreign currency so as to satisfy the target. Initially, the USD to INR was valued at 31.37 but the RBI has since allowed the rupee to depreciate against the dollar.

    Recent times

    The economic disruption due to the spread of the novel coronavirus disease (COVID-19) over the past few months has adversely affected various aspects of the Indian economy. To observe the impact, one could look at the growth rates of gross domestic product and gross value added. Or, in the absence of such data, one could treat other data like sales of automobiles, etc. as a proxy. In this regard, the exchange rate of the rupee can also be an apt marker on the state of the Indian economy’s competitiveness. Due to COVID 19 global pandemic, US Dollar to Indian Rupee exchange rate is at an all-time low. If the US dollar is stronger than the rupee, then it shows that the demand for US Dollars (by those holding Indian Rupee) is more than the demand for Indian Rupee (by those holding US Dollars).

    Typically, stronger economies have stronger currencies. For instance, the US economy is relatively stronger than India’s and this is reflected in one US dollar being equal to around 74 rupees. The Indian rupee has been losing value (or depreciating or weakening) against the US dollar over the past few months. But the US is not the only other country in the world; India trades with many other countries. The Reserve Bank of India tabulates the Indian rupee’s Nominal Effective Exchange Rate (NEER) in relation to the currencies of 36 trading partner countries.

    This is a weighted index, that is, countries with which India trades more are given greater weight in the index. A decrease in this index denotes depreciation in Indian rupee’s value; an increase reflects appreciation. In NEER terms, the rupee has depreciated to its lowest level since November 2018. The rupee has been steadily losing value, showing the Indian economy’s reducing competitiveness, since July 2019. The dip in March 2020 was likely influenced by the net outflow of foreign portfolio investments from the Indian equity and debt markets, they stood at $15.92 billion in March as against net inflows of $1.27 billion in February.

    There is one more measure that is even better at capturing the actual change. It is called the Real Effective Exchange Rate (REER) and is an improved version of NEER because it takes into account the domestic inflation in the various economies.

    After fresh escalation within the US-China trade tension, the Chinese government depreciating its Yuan, and therefore the US President Donald Trump levying duty on the Chinese imports, the emerging economies are expected to receive its impact and so do the national currencies of the emerging economies. As per the market experts, Yuan is that the lead indicator of emerging markets and India isn’t an insulated part of this. So, if the Sino-US trade war is hitting Yuan, so does the Indian National Rupee (INR). This may end in USD to INR at an all-time high and can hit India’s economy

    Until a few years ago, an international trip was a privilege and a luxury that few people could experience. In 2019, international travel is for everyone. Over the years, the number of outbound travels by Indians has increased drastically. In 2016, 21.9mn people travelled abroad and spent about $25bn, and in the span of next 6 years, by 2025, this number is expected to grow by a whopping 110.5%, to 46mn and around $45bn spent on outbound tourism-related expenses.

    Indians travel abroad for vacations, celebrations, education, escapism, business and of course to boost social media presence. As per Pacific Asia Travel Association (PATA), 40% of all outbound trips are for business purposes, while visiting friends and relatives (VFR) comes second with 31%, and travel for leisure, third, with 29%. Of late, Indians have also started travelling for the sake of exploration or to experience different cultures and traditions.

    Overall, the top foreign destinations are Dubai, Saudi Arabia and Bahrain. This is predominantly due to blue-collar workers travelling for employment. For tourism purposes, Thailand and France make it to the top three along with Dubai.

    The beautiful Krabi and Koh Phi-Phi island seem to be primary reasons for Indians to travel to Thailand, along with the Bangkok-style street food.

    Honeymooners and young couples tend to find France an ideal destination to soak up some culture and walk the cobbled pathways trodden by Hemingway himself. The big question, however, is: Why has outbound travel boosted so significantly?

    Outbound travel has exploded mainly due to the rise in the disposable income of the middle class. In the last decade, the economic activity in India has improved, leading to the expansion of income of high and upper-middle households.

    The economic surge has greatly boosted Tier II and Tier III cities, which will continue to increase demand for outbound travel and significantly contribute to the next phase of growth. Another key reason for growth from Tier II and Tier III cities is that the cost of internal travel in India is almost the same as foreign travels, especially to locations such as Bangkok, Thailand and Singapore.

    Further, the easy and tempting option of travelling with EMIs or travel loans. Though historically, India has been a savings economy and borrowing was shunned upon, Gen Y & Gen Z have now become comfortable with debt and are willing to enjoy immediate consumption when they can pay in the future. The acceptance for instant gratification started with housing loans and progressed to electronic consumables, furniture, phones and even high-value grocery purchases. So, taking a step beyond these and taking up an EMI for travel is a very tempting option.

    And of course, in a country of over a billion people, the youth is one of the most important steering factors in each and every course the nation takes. In today’s society where the world of Instagram, Facebook and Twitter have taken over the real world, sharing one’s experiences online has become a must. This does not come without a price tag. The total currency exchanged by outbound Indian travellers is around $22 billion, which is likely to grow to $28 billion by 2020.

    In the digital age, everything that is available online influences the decisions that a person makes, and this is especially the case for the digitally equipped Indian youth. Today, the digitalisation has finally led to India’s youth becoming more “confident, adventurous and wealthier, and more willing to spend”, hence booming outbound travel even more. Plus, the convenience of planning a trip in just a few minutes, and making travel bookings has contributed to this growth.

    CAPA provides some interesting statistics about the influence of technology in this sector:

    In 2016 there were 432 million internet users in India, which is estimated to have increased to 465 million as of the end of 2017.
    Mobile devices account for 77% of internet access by urban India14, and 92% of internet access in rural areas.
    In July 2017, India overtook the US to have the largest number of Facebook users. Social media plays an extremely influential role in fuelling the desire to travel and in the choice of destination and activities.
    Online travel agents (OTAs) have grown to become a major force in the distribution of domestic and international travel.

    Further, by 2022 around 830 million smartphone users in India are expected to be consuming around 18 GB data per month. This is further going to add to the digitization of the Indian economy.

    All these factors, right from an improving economy to the digital shift, have boosted outbound travel from India. The numbers are looking great, and they are only expected to get better in the coming years.

    What is your number one reason for travelling abroad?

    Someone once said, “Great things never happen from staying comfortable.” And surprisingly,

    Recap of Go Global India Program 2019
    A few weeks ago, I attended the Go Global India 2019 program.
    18 companies from India were selected in this month long programme.

    The goal of the programme was to provide early-age startups with the tools they needed to expand globally.
    Every week, we had various speakers from the UK come and mentor us about:
    Business Laws, Pitching, Negotiation, Sales, and more.

    The Demo Day took place in Bangalore on 18th November followed by a dinner reception, which was attended by various high profile people including the British High Commissioner to India, Sir Dominic Asquith KCMG, British Deputy High Commissioner, Mr. Jeremy Pilmore-Bedford, Deputy Chief Minister of Karnataka C. N. Ashwath Narayan, Mr. Mohandas Pai and many others.

    We then spent a week in London and Manchester where we met a host of VCs, fellow entrepreneurs, Angel Investors along with several bespoke 1:1 meetings including meetings with Alpesh Patel, David Fogel, Founders Factory and many others.

    The final pitch day took place in London on 4th December, where each startup delivered a 3-minute pitch to a panel of judges, Indian high Commissioners to the UK, representatives from DCMS, VCs and Angels.
    We also spent a day in Manchester to understand more about the startup ecosystem there and the support offered to early stage startups.

    It was truly an amazing experience and gave the startups a deep understanding of what it takes to expand globally and the support offered by the UK government to do the same. We also understood the deep nuances of raising funds from VCs and angel investors.

    Thanks to DCMS (Department of Digital Culture and Media) UK, UK-India Tech Hub, Enterprise Academy and TIE Bangalore, for this opportunity.
    Special thanks to Shoma Jamil, Sonal Patel, Mike Banders, Anthony Catt, Vijetha Shastry and Tulika Dasgupta for making all this happen.

    Lastly a huge congratulations to fellow entrepreneurs:

    Vikram Gulecha, OCEOWater

    Tridibesh Bandyopadhyay, InQube Innoventures

    Puneet Batra, Avrio Energy
    Srivatsa Sreenivasarao, TraceX Technologies

    Sivareena Sarika, Pregbuddy

    Nishant Kathpal, Ayati Devices

    Niraj Shah, Digi Agri

    Saras Ramamoorthy, Learning Matters

    Khushboo Aggarwal, Zyla Health

    Akash Murthy, Euprime

    Vinay Chataraju, Kritsnam Technologies

    Vijayadurga Koppisetti, ARCHITUDE

    Subramanian Ramvijji,Waymore Enterprises

    Divya Rathod, Divya Innovation

    Shravanth Donthi,Green Lantern Engineering

    Parul Aghi,Aerologiks

    Send Money Abroad via money Hop

    Do you often make an international money transfer but annoyed with the process which is high on cost but low on convenience? No worries, sending money abroad could have never been so easy. Now you can send money abroad via wire transfer with Money Hop at zero margin rate. Not just that, you can simply transfer money from your account to a foreign account online with the comfort of your home.

    Sounds super easy! Find out how?

    Best Ways of Sending Money Abroad

    There can be various reasons for transferring money abroad such as travel, education, maintenance of a closed relative, medical treatment, etc. Since these are usually high-value transactions, it becomes very important that the money is transferred at a low transfer cost and via a secure channel in a speedy manner. Ideally, you should opt for a secure medium which provides you with money transfer services at the most competitive exchange rates in the market.

    The two most popular ways to send money abroad are via wire-transfer or using a demand-draft.

    Wire transfer is the fastest way to send money abroad. The wire transfer mechanism works just like a domestic INR to INR transfer. It is also called as Telegraphic Transfer or TT which is an electronic means of transferring funds. In a typical wire-transfer transaction, money from an Indian bank account will be transferred to the beneficiary’s foreign currency account abroad. Your Indian bank account would be debited in INR and the recipient’s account would be credited in the respective foreign currency of your choice.

    Demand draft is also another popular option of sending money abroad. Foreign currency Demand draft is the physical paper currency that can be couriered abroad or physically carried if you are travelling abroad. However, the biggest limitation of the foreign currency demand draft options is it takes much longer than a wire transfer and also it is not as convenient as transferring money abroad online.

    Why Should you send money abroad via Money Hop?

    Steps to Make a Money Transfer Abroad via MoneyHop

    Step 1. Sign up at Money Hop using your email address and password if you are a first time user. Incase already a member then simply log in to the portal.

    Step 2.  Select the respective currencies and the amount that you want to exchange.

    Step 3. Upload your KYC documents online (only for the first time user)

    Step 4. Add or select the recipient’s account details

    Step 5. Make the payment online and that’s it!

    Documents Required to Send Money Abroad via Money Hop

    The following set of documents required to send money abroad from India. You can upload the documents online at Money Hop for KYC purpose which enables you to complete your money-transfer transaction online with the comfort of your own home

    Banks vs Money Hop: Which one is better for sending money abroad?

    International money transfer service providers charge you a fee for converting your INR to foreign currency and letting you transfer it. It is quite possible that in the lure of better foreign exchange rates, the service provider levies you various types of hidden charges including a high mark up fee. Therefore, it becomes important to enquire about all the types of charges involved in the transaction apart from the exchange rate.

    Besides that, you need to make multiple personal visits to the bank to transfer money abroad while at Money Hop you can do that online with the comfort of your home. The money gets credited to the recipient’s account abroad within the next 24 hours.

    Cost of Making International Money Transfer: A Comparative Analysis

    Money Transfer from IndiaMoney HopOther Wire Transfer Service Providers
    Service Charge0.25%1% to 3%
    Markup Fee0% MarkupUpto 2%
    Hidden ChargesNilUpto INR 25,00

    Frequently Asked Questions (FAQs)

    Q1. How much money can be sent abroad from India?

    Ans. As per the Liberalized Remittance Scheme (LRS) of the RBI, an Indian reside include education, travel, employment, medical, emigration, investment or on maintenance grounds.

    Q2.  What is the cheapest way of transferring money abroad?

    Ans. Making a wire transfer online is one of the cheapest ways to transfer money abroad.  However, the charges levied such a transaction can vary depending on the service provider you choose. Therefore, it becomes important to understand a different kind of charges levied by your bank or service provider.

    Q3. How much does it cost to send money abroad?

    Ans. The fee levied for an International money transfer request may largely depend on the chosen service provider and the amount you want to transfer. Usually, you are levied a fixed transfer fee and a mark-up fee over the exchange rate by your service provider but it is always better to check and understand all the charges involved with money transfer abroad.

     

    The United Kingdom has always been one of the most preferred choices for higher education by Indians and students from all across the globe. Institutions like Oxford University, London School of Economics, University of Cambridge, and Imperial College London are among the world’s most prestigious education centres.

    Oversea education can be quite expensive due to high university fee structures which gets further inflated when one takes into account the cost of living.

    The United Kingdom’s cost of living is generally much higher as compared to other countries. Let’s delve deeper into what your cost of living budget should be if you are an Indian student going to the UK for education.

    DetailsAverage Monthly Expenditure (GBP)
    Tuition Fee (Undergraduate)7000 to 10,000 per annum
    Tuition Fee (Postgraduate)15,000 to 25,000 per annum
    Visa Charges1015 to 1265 One-time
    Accommodation (Outside London)550 to 650 per month
    Accommodation (London)1000 to 1500 per month
    Utilities200 to 350 per month
    Sustenance150 to 300 per month
    Transportation (Outside London)100 – 150 per month
    Transportation (London)150 – 200 per month
    TaxesAs applicable

    Tuition Fee

    The tuition fee for your college or university is the highest contributor to the overall expenditure. Your overall cost of the living budget would significantly depend upon the type of degree you want to pursue and the college that you wish to enrol in. It’s a subjective matter and requires close evaluation of your lifestyle. In addition to this, the fee for your college also depends on the city where your college is located.

    College fees related to disciplines like humanities and arts are usually cheaper than specialised fields like engineering and medicine. If you want to pursue your postgraduate degree from institutions in the UK, the fee can be even higher. On average, an undergraduate programme can cost you in the range of 7000 GBP to 10000 GBP annually. The average range for a doctoral degree is in the range of 15000 to 25000 GBP per annum.

    Visa Charges

    The first expense that you’ll need to bear is Visa processing fees. For studying in the UK, you will need to have a valid student visa. Indian students have to obtain a Tier 4 visa in order to be eligible to study in the UK.

    As per the Tier 4 Visa requirements, students need to pay the tuition fee for the first academic year or will need to submit evidence that verifies financial security. In addition to this, documents showing sufficient funds for nine months’ worth of living expenses need to be provided. These charges come around 1015 GBP per month when accommodation is outside London and 1265 GBP per month when staying in London.

    Accommodation Charges

    Majority of colleges and Universities offer residential programs and have an on-campus residence to accommodate the students who enrol with the college. These facilities are known as Halls of Residence for international students. The Halls of Residence can be either self-catered or full board. It is among the most convenient option that you can opt for while pursuing your education in the UK. However, from the cost perspective, it can be a costly affair. This invites a lot of competition, and you need to apply beforehand to get a slot.

    If your college doesn’t have on-campus accommodation or if you fail to get a slot, you will need to secure private accommodation. You can either go for a room on rent or opt for a paying guest facility. If you find it difficult to search for lodging, you can contact your university’s accommodation office for help. They can help you find suitable accommodation in the vicinity of the college. The cost of private accommodations is contingent on the city and varies dramatically depending on whether the accommodation is in the city of London or outside.

    A one-bedroom accommodation can cost somewhere between 550 GBP to 650 GBP per month outside London and anywhere between £1000 – £1500 in the city of London.

    Utilities

    You will need to pay for utility expenses such as electricity, water, internet, etc. which can be in the range of 40-50 GBP each. In addition to this, you will need to pay for local community service charges, council tax, etc. In total, utilities can cost you anywhere between 200 to 300 GBP depending on your consumption and size of accommodation.

    Tip: As a student, you can submit your university enrollment letter to the council and get a council tax waiver.

    Sustenance

    The residence halls at the universities and the private accommodation are generally equipped with a fully functional kitchen and most students tend to cook themselves. There are several supermarket chains across the country such as Tesco, Sainsbury’s, Marks & Spencers, Co-operative and the Waitrose. Most of the supermarkets sell basic ingredients for the preparation of Indian food. They generally also have pre-cooked, frozen Indian meals. There are other areas in London with a higher concentration of south-Asian communities, such as Brick Lane, Harrow, East-ham etc., which have specific Indian supermarkets and one can purchase almost any Indian ingredients or utensils in these shops. Students generally tend to take a trip to these areas once in a few weeks to stock up on food and other items.
    Even the basic sustenance items are city dependent and can vary anywhere between £150 – £300 per month.

    Transportation

    In the UK, public transport is the most widely used means to get around. This includes the famous London Underground (called “The Tube”) and the iconic double-decker red buses.
    The other cities in the UK such as Manchester, Birmingham, Nottingham, Oxford etc. also have their own bus, tram or train networks. Students also tend to use bicycles to get around the campus in university towns such as Cambridge and oxford.

    For students, typically a monthly underground pass for the city of London varies between £180 – £250 depending on the zones selected. The rates are lesser for other cities.

    Tip: Students can get special discounts on monthly transport passes after they present their student ID card.

    Health Support & Insurance