How Is Bank Remittance Different From A Transfer?

[Shashank Bhaskar]

Knowing and having a clear understanding of how money transfers work is essential. If you have made a money transfer to India before, we are sure you must have heard the terms Bank Remittance and Bank Transfer. People confuse these two and consider them the same. They do work on similar lines. However, they are not the same and have a thin line of difference.

Here are the concepts that will help you understand and differentiate between transfer and Remittance.

Bank Remittance

It refers to a way to remit to India between two different Bank Accounts where the bank account holders reside in other countries. The word remittance is derived from the term remit, which means to send back. To help you understand this better, here is an example: If you are child is working abroad, and he wishes to send some money home. This transferring of funds is called remittance.

This gets done to fulfil both personal and professional obligations. However, the money transferred should have proper documentation to support the same. The foreign exchange rates play a significant role in any remit you make. There are many ways you can send money to India to your loved ones residing anywhere worldwide. There are dedicated Remittance partners and agencies that offer specialised Remittance Services.

Bank Transfers

It is the money transfer that takes place between two accounts, usually held by the same individual. Bank transfers are also popularly known as Wire Transfers. It is a standard transfer from one Bank Account to another. But make a note that such transfers happen locally and internationally.

In the case of a local bank transfer made to a Foreign Bank Account, an intermediary organisation gets involved that operates between the sender and the receiver. The role of this intermediary organisation is like that of a Credit Union. It is responsible for keeping the entire transfer mechanism clear of hassles and ensuring secure money transfers. You can make bank transfers via the Internet or Mobile Banking services.

These transfers are known as Electronic Fund Transfer. EFT are a suitable alternative to traditional Wire Transfers as they offer fund transfers in the shortest time frame.

Point of commonality

Timing, the volume of transfer, and the cost involved are the three essential factors in both Remittance Transfer and Bank Transfers.