TT Buying Rate: What It Is and How It Works

The TT buying rate is the rate at which your bank converts an incoming foreign payment into rupees when the money arrives by wire. TT stands for telegraphic transfer, and this rate applies whenever funds move into India: export proceeds, service invoices, or any inward remittance credited to your account. Because the bank is buying foreign currency from you, it pays a rate that sits just below the live mid-market rate, and that small gap is the margin you carry on every payment. This guide explains how the rate is built, why it differs from the number you see on Google, and how it is used for income tax.

For Indian exporters and services businesses, the TT buying rate quietly decides how many rupees actually land in your account. Two banks can advertise the "same" dollar rate and still credit you different amounts, because each loads its own margin. Understanding the mechanics is the first step to keeping more of what you earn.

The TT buying rate is the price a bank offers to buy foreign currency from you when it arrives as a clean, ready-to-credit inward payment. The classic case is a telegraphic transfer: a client abroad wires dollars, the money reaches your bank in foreign currency, and the bank converts it to rupees at the TT buying rate before crediting your account.

It is called a "buying" rate because the transaction runs from the bank's point of view, not yours. When money comes in, the bank is buying forex; when money goes out, the bank is selling it. So an exporter receiving a foreign inward remittance is always quoted the buying side, while an importer paying a supplier is quoted the selling side.

The word "telegraphic" is a historical hangover from the era of cabled instructions between banks. Today the settlement is electronic, but the terminology stuck, which is why "TT buying rate" and "telegraphic transfer buying rate" mean exactly the same thing.

Banks publish a daily card with several rates for the same currency pair, and mixing them up is where confusion starts. The direction of the money, and the form it arrives in, decides which one applies to you.

Two points are worth holding on to. First, the selling rate is always higher than the buying rate for the same currency, and the difference between them is the bank's spread. Second, the bill buying rate is usually the least favourable of the three, because a bill or cheque carries collection risk and time that a clean wire does not. If your money arrives as a straightforward credit, the TT buying rate is the one that matters.

The TT buying rate starts from the interbank spot rate, the wholesale price at which banks trade currency among themselves, and then a small deduction is applied. That deduction is the exchange margin, and it is what the bank keeps.

The exchange margin is guided by conventions from the Foreign Exchange Dealers' Association of India (FEDAI) and typically runs in the region of 0.025% to 0.15% for a TT purchase, though each bank sets its own figure within that band. The margin covers the bank's operational cost, settlement risk, and profit. It is rarely shown as a line item on your statement, which is why the interbank rate and the rate you actually receive are worth comparing side by side.

Because every bank chooses its own margin, the TT buying rate is not uniform across the market. This is exactly why a payment of the same size can credit different rupee amounts at two banks on the same afternoon.

When you check a currency pair on Google, you see the mid-market rate, the midpoint between the global buy and sell prices. It is the fairest reference rate, but no bank credits inward money at it. The TT buying rate always lands below it.

The reason is structural. A bank has to fund the conversion, hold the risk between receiving the currency and settling it, and make a return. It does that by buying your dollars a few paise under the mid-market rate. On a single small payment the gap looks trivial. Across a year of export invoices, those few paise per dollar add up to a meaningful sum that never appears as a fee.

Numbers make the margin concrete. Suppose an exporter receives a $10,000 payment on a day when the mid-market rate is an illustrative ₹88.00 to the dollar.

• At the mid-market rate: $10,000 × ₹88.00 = ₹8,80,000
• At a bank TT buying rate of ₹87.55 (about 45 paise below mid-market): $10,000 × ₹87.55 = ₹8,75,500
• The FX margin you absorbed: ₹4,500 on this one payment

Now add the flat charges. Many banks also deduct a wire or handling fee and, on the sending side, correspondent banks may clip the amount before it even reaches India. The headline rate looks close to fair, but the credited amount tells the real story. Run your own figures below.

There is a second, non-banking reason the TT buying rate matters, and it catches many exporters and salaried professionals off guard at filing time. Indian tax law uses it as the official conversion rate for foreign income and assets.

Under the Income-tax Rules, 1962 (Rule 115), foreign income is converted to rupees using the telegraphic transfer buying rate adopted by the State Bank of India on a specified date, which varies by the type of income. For reporting foreign assets in Schedule FA of the ITR, and for several perquisite and capital-gains computations, the SBI TT buying rate on the relevant date is the figure the department expects, not a bank's own card and not the mid-market rate.

This is why searches for the SBI TT buying rate spike around ITR season and around 31 March. People are not shopping for a transfer; they need the exact historical SBI figure to fill a form correctly. If you are converting foreign income or valuing a foreign asset for a return, use the SBI rate for the date the rules prescribe, and confirm the specific date with your chartered accountant, since the correct rate depends on the income head. Tax treatment is a matter for a qualified professional; this section explains the rule, not your filing.

Every authorised dealer bank publishes a daily forex card rate sheet, usually on its website and often updated more than once a day as the market moves. That sheet lists the TT buying rate, TT selling rate, and bill rates for each currency it handles.

If you bank with a large private lender, the HDFC bank forex rates card is a good example of how these sheets are laid out, with separate columns for buying and selling. Comparing a few banks' cards on the same day is the quickest way to see how much the margin varies between them.

For a broader view of how these rates are set and read across lenders, a general explainer on bank foreign exchange rates is a useful starting point, and if the underlying idea of a buy-sell spread is new to you, the basics of forex rates are worth a read before you compare cards.

You cannot remove the margin on an inward payment, but you can shrink it by choosing where the currency is converted. The core lever is which reference rate the conversion is priced against. Banks typically mark up a hidden interbank rate; a purpose-built cross-border platform marks up the live mid-market rate instead, which usually leaves more rupees in your account on the same payment.

Xflow is built for Indian businesses receiving money from abroad, and it prices conversions off the live mid-market rate rather than a hidden internal one. It holds final Payment Aggregator-Cross Border (PA-CB) authorisation from the Reserve Bank of India (RBI) for both exports and imports, as of February 2026, settles on the next business day (T+1), and issues the electronic Foreign Inward Remittance Advice (eFIRA) automatically, so your compliance trail stays intact. On average, businesses save up to 50% on FX costs compared with traditional bank wires.

Timing helps too. The FX AI Analyst lets you set a target USD/INR rate so a conversion executes when the market reaches it, rather than being forced to accept whatever the card shows the moment your money lands. For services exporters who receive international payments regularly, small improvements on each conversion compound across the year.

The TT buying rate is the number that decides how much of a foreign payment survives the trip into your bank account. It is built from the interbank rate minus a margin you rarely see, it always sits below the mid-market rate, and the SBI version of it doubles as the official rate for converting foreign income at tax time. For a business receiving regular export income, the margin is not a one-off cost but a recurring leak. Knowing how the rate works, comparing your bank's card, and choosing where your currency is converted are the practical ways to keep more of what you have already earned.