How Do You Receive a Foreign Remittance in a Savings Account

How Do You Receive a Foreign Remittance in a Savings Account
Rohit17 February 2024

When receiving payments in foreign currencies from clients, the first question is whether you, as a freelancer, can accept foreign remittances directly into your Indian bank accounts. 

The answer is yes, but freelancers must consider various other details and factors regarding receiving foreign remittances into their bank accounts. 

The Basics of Foreign Remittances

The Reserve Bank of India allows Indian citizens to receive foreign remittances into their savings bank account without any restrictions (apart from remittance under the Foreign Contribution Regulation Act, 1976). However, the receiving method may vary. 

1. Wire/Bank Transfers (SWIFT/IBAN)

The sender initiates an international wire transfer through their bank (correspondent bank). The process involves providing necessary details such as the recipient's name, account number, SWIFT code, and sometimes an IBAN. 

SWIFT code is a unique identification code assigned to banks and financial institutions worldwide to identify a specific bank when making international wire transfers between banks. 

IBAN is a standard international numbering system developed to identify bank accounts uniquely. 

2. Money Transfer Services

Money transfer services, like Western Union, allow individuals to deposit cash or use their debit/credit card to send money to someone in another country. 

You can visit their transfer outlet, give them cash, and they send the money to their foreign office. The recipient in the other country visits the local office to collect funds after providing the necessary information. 

3. Online Payment Platforms

Online payment platforms like Skydo, PayPal, and others allow users to send and receive payments digitally through a virtual currency account. The users can deposit the funds into their bank accounts by converting the currency per the foreign exchange rate and paying the applicable conversion fee. 

Can You Use Your Savings Account? 

Yes, the Reserve Bank of India allows Indian citizens to use their bank accounts to receive foreign remittances. 

Under the scheme for foreign remittance, there are no restrictions on the number of remittances and the remittance amount. However, trade-related transactions have an upper cap of Rs 15 lakh. 

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Should I Use My Savings Accounts For Foreign Remittances?

In India, income earned through business activities is subject to taxation under the Income Tax Act. Mixing personal and business transactions in a savings account can complicate tax reporting and may lead to difficulty in calculating business income and deductions.

Businesses in India must file various tax returns and reports, including income tax returns, Goods and Services Tax (GST) returns, and annual financial statements. Receiving business funds in a savings account can make compiling accurate financial records and reports more difficult, leading to potential compliance issues and penalties for incorrect or incomplete reporting.

Receiving the Remittance: Step-by-Step Guide

Here is the detailed process to receive foreign remittances into your savings bank account.

Receiving the Remittance: Step-by-Step Guide

Step 1: Provide Your Bank Account Information

Provide the sender with all the bank account information, such as your bank name, account number, branch name, IFSC code, SWIFT code, and IBAN (if applicable). 

Step 2: Transfer Confirmation 

Wait for the sender to initiate the fund transfer and send you a payment confirmation with the reference number and the expected amount. 

Step 3: Credit Confirmation

Depending on the chosen method, the funds may take some time to reflect in the bank account. Ensure you get a credit confirmation for the funds, which you can communicate with the sender. 

Step 4: Foreign Inward Remittance Advice (FIRA)

Once you receive the amount in your bank account, contact your bank and provide them with all the necessary information to obtain the FIRA. It is a required document that acts as a proof of inward remittance. You can send a copy of this certificate to the sender. 

Documents Required For Inward Remittance

The timeframe for the overseas money transfer depends on the mode of payment chosen by the sender. For example, express remit money transfers take 1-3 business days, international wire transfers take 1-2 business days, and demand drafts take 7-28 business days. Furthermore, there may be delays in executing the payment because of currency conversion or bank verification processes. Depending on the payment urgency, you can request the sender to choose a specific mode to transfer funds into your savings account. 

Skydo: An Alternative to Savings Accounts 

Foreign Currency Accounts, Non-Resident External Accounts (NRE), and Foreign Currency Non-Resident Deposits (FCNR) are savings account alternatives to receive foreign payments. 

Since these accounts are specially designed for executing cross-border transactions, they offer higher interests and protection against exchange rate fluctuations. 

However, opening and maintaining such accounts can be time-consuming, complex, and prone to higher regulatory and taxation compliance. If you are a service provider or a business owner with frequent inward remittances, a digital global transaction platform such as Skydo is advisable. 

With Skydo, you can create instant virtual currency accounts to receive international payments in various foreign currencies in your savings account.

International Accounts

Furthermore, you can create professional GST-compliant Invoices effortlessly and share them with the sender. 

Finalising the invoice

Once you receive the remitted money in your bank account in INR, the income is treated as taxable and is added to your taxable income for the assessment year. 


Receiving foreign remittances in a savings account may offer convenience, especially for those who have recently started to receive foreign funds with lower frequency. However, if the inward remittance is frequent, there are better alternatives to choose and receive funds, such as Skydo. You can visit Skydo for consultation and opening an instant virtual currency account

Analyse and compare all the available foreign currency transfer options based on individual or business preferences, conversion fees, and the nature of the transaction. 

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Q1. What are the limitations on receiving business funds through a savings account?

Ans: The limitations include limited business banking features, regulatory compliance issues, processing delays, limited transaction and withdrawal volume and lower interest rates. 

Q2. How long does it usually take to receive the remittance after it's sent?

Ans: The remit money timeframe entirely depends on the communication between the sender’s and the receiver’s bank and the chosen payment methods. Overall, the remittance may take 1-5 business days in case of digital transfer. 

Q3. How much money can I receive through my savings account under the LRS?

Ans: As of the latest guidelines (subject to change), the limit for international money transfers under the LRS is USD 250,000 per financial year per individual. This limit applies to all outward remittances, including through savings accounts, for purposes such as education, travel, investments, and maintenance of relatives abroad.

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