Whether you are someone who travels abroad often or once in awhile, you should know how to manage the foreign currency. After all, you need that money to make your stay abroad a pleasant experience. Also, dealing with foreign currency requires you to understand the exchange rates and other charges. There are many different ways you can carry foreign currency that you will need abroad. They can be broadly placed under the categories below.

Cash – You can, of course, exchange Indian rupees for foreign currency and carry it with you. However, there are many restrictions to carrying cash abroad. The Reserve Bank of India says that travellers going abroad are allowed to purchase foreign currency notes/coins only up to USD 3,000 per visit. Need more money? Then, try other alternatives listed below.

Traveller’s Cheque – This is similar to the bank cheque that you use. This cheque can be used for purchases abroad or can be encashed. It is usually issued by banks. Now, forex agents are also offering these. A traveller’s cheque is almost like cash. It can be converted into foreign currency easily.

Prepaid Forex Cards – You need to load these cards with funds and you can use them just like your credit or debit card.  They are very similar to gift cards offered by retail outlets and online stores. You can use the card till you exhaust the funds loaded by you. The biggest advantage of a prepaid forex card is that you can use it like a debit card without incurring foreign exchange fees or charges when you make those purchases abroad. Since only a limited amount can be loaded, you need to ensure that you stick to the limit. Usually, banks and financial institutions that issue these cards charge a nominal fee for them.

Plan to visit more than one country? Use a multi-currency travel card. These cards have technology that allows you to choose the currency that you want to use. They are like mobile wallets where the currencies are stored in wallets. Your funds will be instantly transferred to that currency wallet that you wish to use. Banks such as ICICI Bank. HDFC Bank, Axis Bank and Yes Bank are offering these cards.

However, for the above methods (cheque and prepaid card), RBI has placed certain limitations. If you are carrying more than the US $ 10,000 using cheque or prepaid cards, you need to declare the same to customs authorities.

Credit Cards – There are several international credit cards available for those who travel abroad. They offer benefits such as low markup fees and high reward rates. However, the annual fees for such cards range between Rs 5,000 and Rs 20,000 (or upwards). This is best used for emergencies or by frequent travellers.

Debit Cards – International debit cards allow you to use the funds in your bank account. Here, you don’t have to pay interest like in the case of credit cards. However, foreign currency conversion fees are usually high and you cannot decide the rate at which your transaction will be converted into foreign currency.

So, which one should you go for? Carrying a single form of foreign currency might not be enough if you are going to stay abroad for more than a few weeks. It is best to carry cash, traveller’s cheques and prepaid cards while keeping credit and debit cards for emergencies or for essential purchases when you run out of cash.

Where to buy?


You can, of course, exchange your money for foreign currency at banks. Most of the times you might have to take the rate that is handed out by banks. Preferential foreign exchange rates are given to only customers who either have premium accounts with the bank or if they want to exchange huge sums of money. When you return to India, you can exchange unused currency at any of the bank’s branches.


You can also get foreign currency from agents such as Western Union and Thomas Cook. These agents might offer better exchange rates when compared to banks. However, watch out for the processing fees.


Another method is to buy foreign currency online. Websites such as BookMyForex and Centrum Forex allow you to exchange your rupees for foreign currency. These websites deliver the foreign currency at your home or you can collect it from any of their branches. There are charges if you want the foreign currency delivered to your home. Some of them even allow you to pick up the foreign currency at the airport once you have booked the rates and paid in advance or the whole amount.

Note that the rates might be different for cash, traveller’s cheque and prepaid forex cards on these websites. You must also understand that the exchange rates might differ based on the city in which you reside. These websites usually woo customers by providing them with shopping vouchers or cashback offers.

The best way to pick a forex agent is to compare a range of agents and banks. Also, avoid buying forex from airport counters or unauthorised agents. This could turn out to be either very expensive or fraudulent. Always approach authorised money agents or banks for your forex needs.

Staff Writer

This article is written by RupeeIQ editorial staff.