HSBC Bank Forex Rates Explained | How to Save on Transfers

From sending money abroad to pay for a student's university tuition, sending funds to family, buying products from foreign suppliers, or receiving payments from foreign clientele, foreign exchange plays a massive role in our everyday lives. It allows businesses, financial institutions, and individuals to make international transactions with ease. 

Many banks and other platforms allow customers to facilitate international transactions. In this article, we examine HSBC's currency exchange rates and explore better alternatives for your forex needs. 

HSBC Bank, or the Hong Kong and Shanghai Banking Corporation Limited, is a popular bank with branches across the world. In India, its establishment can be traced back to Mumbai in 1853, when the Mercantile Bank of India was established. As the Mercantile Bank grew, it opened branches in London, Singapore, Hong Kong, Canton, and more. 

In 1959, the Mercantile Bank was bought over by Hongkong and Shanghai Banking Corporation Limited. It played an active role in developing the banking industry in India. In fact, it was responsible for establishing the first ATM in the country in 1987. 

HSBC Bank also offers foreign exchange (or forex) services. Before diving into HSBC India's forex rates, what exactly is forex?

Foreign exchange refers to the conversion of one nation's currency into another according to their current values. The value of a currency can have significant effects on a country's tourism, trade, investments, and more. 

For businesses, it's essential to keep track of the currency values of the nations they deal with, whether you have suppliers in Brazil or clients in Poland. It's also important to know which banks and platforms can facilitate forex transactions at minimal costs. 

TT buy/sell rates

Another essential concept in forex is the TT rate. TT stands for telegraphic transfer, and, broadly, refers to transferring funds from one bank account into another. It also involves sending money between countries and between currencies. 

The TT buy rate refers to the rate at which a bank converts foreign currency into the local one (so INR, in India). Conversely, the TT sell rate refers to the rate at which a bank converts your local currency into a foreign currency. For instance, when exchanging Indian rupees into US dollars, different banks may display varying rates (e.g., TT Buy/Sell (USD: ₹87.55 / ₹89.15). 

HSBC's exchange rates change depending on market factors, and can be checked on their website or by visiting their branches. Here are the exchange rates for some of the most widely used currencies, according to the latest update to their website:

Additionally, HSBC has the following outward foreign currency remittance fees: 0.3%, Cable ₹200, and "OUR" charges ₹1,200. 

Foreign exchange rates are usually quoted in pairs (for example, INR/USD) to compare the relative value of one currency to another. However, these values are subject to constant change due to external economic and political factors. 

For most industries (like trading or business), knowing the updated relative values is crucial. This is where real-time forex rates come in. Real-time forex rates refer to the up-to-the-minute updated information on currency pairs. 

This information enables your business to manage foreign exchange risk, identify the cost of international transactions, respond to market changes promptly, and minimize losses. 

In the foreign exchange market, currencies have a bid rate and an ask rate. The middle value between the bid and ask rate is known as the mid-market exchange rate benchmark. Often, this number differs from bank exchange rates, including HSBC's forex rates. This is because of several factors, which we take a closer look at below:

1. Bank fees and charges 

While banks trade currencies with customers, they also trade with other banks simultaneously. However, the rates at which they trade with other banks are different from those with customers. Generally, interbank rates are lower (like wholesale prices, since other banks buy in bulk). 

This means that if the interbank rate for buying AUD is 1.00, the rate for customers would be higher, maybe 1.05. Similarly, if the bank is buying AUD from the customer, then the rate offered would be lower, say 0.95. 

In both cases, the bank is earning about 5 cents, and this 10-cent difference is known as the spread. The bank charges this for acting as a middleman and facilitating the currency exchange. It helps them to earn a profit. It's important to note that the spread rate can change just like currency rates. 

Along with the spread, banks may also charge a certain percentage of the transaction, or even a flat transaction fee, when exchanging currency. These charges also help to drive profits. Since banks often have higher operational expenses, their costs are generally higher as well. 

Switching to other platforms, like Xflow (a fintech alternative), for your global money transfers (which offers real-time rates, no transfer fee) can help your business save on costs!

2. Market changes and volatility 

The forex market is extremely volatile. It is easily affected by macroeconomic factors, geopolitical fluctuations, supply and demand and more. To account for these changes, banks usually adjust their spread, helping avoid potential losses. 

3. Taxes and other regulations

Finally, banks in India are required to adhere to regulations set by the Reserve Bank of India, or the RBI. Indian banks must comply with the rules of the Reserve Bank of India. These typically involve risk insurance, bank rates, taxes, and more. Adhering to them often increases compliance costs, which customers then bear. 

The REER, or the Real Effective Exchange Rate, refers to the value of a nation's currency in relation to a basket of other foreign currencies. They take into account inflation and reflect the actual purchasing power of a currency. 

An increase in a country's REER denotes an increase in the value of the rupee. Conversely, a decrease in REER indicates depreciation in the currency value as well. 

For example, say the Indian rupee (INR) decreases in value compared to the euro. When European buyers buy Indian goods and services, they will convert euros into rupees. Because the value of INR has decreased, European buyers will get more rupees for every euro. This means they will be able to buy Indian goods for a cheaper price. 

HSBC's forex rates are generally displayed on their website. To check, visit the bank website and navigate to 'FX Services,' 'Foreign Exchange Rates,' or 'Currency Exchange Rates,' depending on your requirements. 

Alternatively, you could type in "HSBC forex rates" or "HSBC forex card rates" into your search engine. HSBC Bank also offers a Global Money Account, where customers can store up to 19 currencies in a single account. HSBC's Expat Mobile Banking App also offers FX services. 

While HSBC Bank offers FX services, the additional fees could significantly impact your business's cost savings. That's where Xflow comes in. Xflow revolutionizes the forex game by reducing costs and simplifying the process of navigating international payments. Here are some of our offerings:

• Transparent pricing: Xflow does not have any hidden fees, meaning you get enterprise-grade pricing directly tied to mid-market rates. Plan your business's finances better with Xflow.  

• Faster settlements: Xflow settles your funds in one business day and lets you track your funds throughout the journey. 

• Backed by the world's largest banks: All of Xflow's transactions are powered by JPMorgan Chase, one of the largest banks in the world. We ensure your money is safe and secure at all times. Xflow is also ISO 27001 and SOC 2 certified. 

• One-click eFIRA: We also offer you a one-click eFIRA for all international transactions within 24 hours. 

• Lower transaction fees: Xflow charges a flat 1% fee on transactions, or a minimum of $8. We also charge 0% FX markup on mid-market rates.

• Process large transactions with ease: Xflow allows your business to receive over $10,000 on a single invoice in compliance with all regulations. We streamline your payment process and eliminate any necessary complexities along the way. We help reduce manual effort while minimizing errors and accelerating payment deadlines. 

• Locked forex rates: To combat market volatility and protect your business's cash flow, Xflow allows you to lock the current forex rate for up to 45 days at no additional charge. Based on your requirements, you can lock in the FX rate or use the Guaranteed Live FX feature to customize your payment experience. 

• Leverage local payment networks: Xflow simplifies international payment transfers, particularly from the USA to India. We leverage local payment networks like FedWire and Automated Clearing House (ACH). FedWire allows for real-time gross settlements for instant bank transfers, and ACH enables same-day or next-day payments. 

Below is a comparison of traditional banks versus Xflow's rates for FX transactions:

If your business relies on international payments, understanding forex rates and their impact on your profits and cash flow is crucial. While forex rates are constantly fluctuating, using platforms like Xflow helps you protect your earnings. 

We help your international payments stay secure in the face of forex market volatility, ensure transactions are processed, provide settlements in one day, and help your financial teams focus on growth rather than the intricacies of foreign exchange.