You check Google and see the dollar at ₹83. Later, when you send money abroad, your bank charges you at a higher rate. The mismatch feels frustrating, especially when the transfer amount is significant. This difference usually comes down to the TT selling rate.
Banks apply the TT selling rate when you make outward remittances, such as paying overseas suppliers, SaaS subscriptions, or professional fees. Unlike the market rate shown online, this rate factors in the bank’s cost of sourcing foreign currency and executing the transfer.
In this article, you will understand what the TT selling rate is, how banks calculate it, and when it applies to your transactions. Knowing how the TT selling rate works helps you anticipate costs, compare options, and avoid surprises on your bank statement.
Key takeaways
- The TT selling rate is the exchange rate banks apply when you send money abroad, and it already includes the bank’s margin.
- It is always higher than the TT buying rate and is used mainly for outward remittances and clean import payments.
- The final rate depends on the live interbank spot rate plus a margin that varies by bank and transaction size.
- Checking margins and choosing transparent payment partners can help you reduce forex costs.
What is the TT Selling Rate?
The TT selling rate is the exchange rate at which a bank sells foreign currency to you for an outward remittance.
From the bank’s point of view, it is supplying the foreign currency, such as USD or EUR, and receiving INR from you. This is why the bank refers to it as a selling rate. Customers focus on sending foreign currency, while banks focus on selling it, this difference causes confusion.
The TT selling rate differs from the interbank rate you see on Google. Banks include a margin to manage forex risk, processing costs, and settlement. As a result, the TT selling rate is usually higher. Banks use this rate as the standard benchmark for clean outward remittances where no trade documents are handled.
TT Selling Rate vs. TT Buying Rate: What’s the Difference?
At a simple level, the difference comes down to the direction of money flow. When money moves out of India, banks use the TT selling rate. When money comes into India, they apply the TT buying rate. The gap between these two is called the spread, and it represents the bank’s margin.
From your side, the rule is straightforward. You always buy foreign currency at the bank’s selling rate and sell foreign currency at the bank’s buying rate. Because of this structure, the TT selling rate is always higher than the TT buying rate.
Quick comparison
| Aspect | TT Selling Rate | TT Buying Rate |
| Money flow | Outward (outflow) | Inward (inflow) |
| Bank’s role | Bank sells foreign currency | Bank buys foreign currency |
| Rate level | Higher | Lower |
TT Selling Rate (Outward Flow)
- Applies when funds leave the country.
- Used for import payments, overseas tuition fees, and gifts sent abroad.
- Bank converts your INR into foreign currency like USD or EUR.
TT Buying Rate (Inward Flow)
- Applies when funds enter the country.
- Used for export proceeds, freelancer income, and inward remittances.
- Bank converts incoming foreign currency into INR.
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When Is the TT Selling Rate Applicable?
Banks apply the TT selling rate to specific outward transactions regulated under FEMA and overseen by the RBI. In simple terms, whenever your bank needs to sell foreign currency for a permitted payment abroad without handling trade documents, this rate comes into play.
Outward Remittances
This covers wire transfers for education fees, medical treatment, travel expenses, family maintenance, and gifts. These are treated as clean outward remittances, where the bank does not examine shipping or trade documents.
Import Payments
The TT selling rate applies to advance import payments and to import settlements classified as clean payments, where no documentary bills are routed through the bank for scrutiny.
Other Financial Transactions
Banks also use this rate for:
- Cancelling an earlier foreign exchange purchase.
- Refunding a failed or returned inward remittance.
- Converting deposits, such as switching NRE balances into FCNR accounts.
How to Calculate the TT Selling Rate?
Banks do not pick the TT selling rate at random. They arrive at it using a simple formula that starts with the live market rate and adds a small markup. Knowing these components helps you understand where the extra cost comes from.
The Calculation Formula
TT Selling Rate = Spot Selling Rate + Exchange Margin
The spot selling rate is the real-time interbank rate at which banks trade currencies with each other. It moves throughout the day based on demand and supply in the forex market.
The exchange margin is the bank’s charge. It covers operational costs, settlement risk, and profit. Most Indian banks apply a fixed margin, often ranging from 0.025% to 0.15%, depending on the transaction type and customer profile.
Example Scenario
Assume the spot selling rate for USD/INR is ₹88.50.
Assume the bank applies a margin of 0.10%.
- Margin Amount: 0.10% of 88.50 = ₹0.0885
- TT Selling Rate: ₹88.50 + ₹0.0885 = ₹88.5885
After rounding, the bank would charge you a TT selling rate of ₹88.59.
Pro Tip: If you are processing large transactions (e.g., above $10,000 equivalent), you can negotiate the exchange margin closer to the lower end of the quoted range, which can meaningfully reduce your overall forex cost on high-value transactions.
Factors That Influence the TT Selling Rate
The TT selling rate changes because two forces work together: what is happening in the global currency market and how your bank prices foreign exchange. Looking at both makes it easier to understand why rates move from one day to the next.
Market Volatility and Spot Rates
- The spot rate forms the base of the TT selling rate and depends on global demand and supply for currencies.
- Factors such as inflation levels, interest rate decisions, and geopolitical developments influence how strong or weak a currency becomes.
- When major economic data or central bank announcements are released, spot rates can move sharply within a single day.
Bank Margins and Spreads
- On top of the spot rate, banks add a margin to cover costs and manage risk. This margin varies from bank to bank.
- During periods of high market volatility, banks may increase their spread to protect against sudden currency movements.
- The size of your transaction also plays a role. Larger transfer values often give you leverage to negotiate a lower margin.
TT Rate vs. Bills Rate vs. Card Rate: Understanding the Nuances
Banks quote different forex rates based on how money moves and the level of handling involved. The TT selling rate applies to clean wire transfers, while the Bills Selling Rate applies to documentary transfers where the bank verifies import documents before releasing payment.
Bills Selling Rate
- Used when an import payment involves physical trade documents, such as a Bill of Lading or invoice set.
- Calculated as the TT selling rate plus an additional margin.
- Slightly higher than the clean TT rate due to document checking and administrative work.
Currency Card Rate
- Used for forex travel cards and the purchase of physical foreign currency.
- Common for travel-related spending and short-term overseas needs.
- Carries a higher markup than TT rates.
- Covers inventory, liquidity, and handling costs for physical currency.
How to Optimise Your International Transfer Rates?
You cannot control market movements, but you can control how and where you convert currency. Small choices around timing, providers, and margins can materially reduce your forex cost over time.
Compare Bank Spreads
- Always review the rate card or card rate sheet of multiple banks before initiating a large transfer.
- Look beyond the headline rate and focus on the spread over the interbank rate.
- For high-value transactions, speak to your relationship manager and negotiate the exchange margin—banks often have flexibility.
Leverage Fintech Solutions
Traditional wire transfers are no longer your only option. Modern payment platforms often offer rates closer to the mid-market rate, with clearer pricing.
Razorpay International Payments enables businesses to collect money globally with transparent pricing and zero forex markup. For SaaS exporters, freelancers, and goods exporters, this reduces uncertainty and makes international cash flows easier to manage.
Pro Tip: Forex markets are more liquid when major markets operate at the same time. Transfers made during these hours often get better spot rates, which lowers the TT selling rate applied to your transaction.
How Razorpay International Payments Simplifies Global Transfers
Once you know how banks price foreign exchange for international transfers, the next step is choosing a payment setup that keeps those costs predictable and visible. This is where Razorpay International Payments fits naturally into the picture for Indian exporters, freelancers, and SaaS businesses. With this you can:
- Accept international payments from 180+ countries and 135+ currencies without opening a foreign bank account.
- Receive funds through multiple methods such as bank transfers, cards, Apple Pay, and Google Wallet, suitable for B2B, SaaS, and service exports.
- Get zero forex markup with fully transparent pricing, so you see exactly how much you earn on every international payment, with no hidden or surprise deductions.
- Ensure payments remain FEMA– and RBI-compliant, reducing friction with banks and auditors.
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Conclusion
The TT selling rate is the exchange rate applied when you send money abroad. Banks calculate it by adding their margin to the prevailing spot rate, which explains why it is higher than the rate shown online.
This rate is different from the TT buying rate and is used mainly for outward remittances and clean import payments. Because the margin varies across banks, checking the exact rate offered before each transfer is important.
Over time, even small differences in rates affect your overall costs. Choosing payment partners that offer clear and transparent pricing helps you plan international transactions with greater confidence.
FAQs
Q1. What exactly is the TT selling rate?
The TT selling rate is the exchange rate at which a bank sells foreign currency to you. It applies when you send money abroad for purposes like education, gifts, or import payments.
Q2. How does the TT selling rate differ from the TT buying rate?
The TT selling rate applies to outward remittances, while the TT buying rate applies to inward remittances. The selling rate is always higher than the buying rate.
Q3. How can I calculate the TT selling rate manually?
Add the bank’s exchange margin to the interbank spot selling rate. The margin is the bank’s charge over the live market rate.
Q4. When is the TT selling rate applicable?
It applies to clean outward transactions where banks do not handle trade documents, such as education fees, medical expenses, gifts, and advance import payments.
Q5. What is the difference between the TT selling rate and the Bills Selling Rate?
The TT selling rate applies to simple transfers without documents. The Bills Selling Rate applies when import documents are involved and is usually higher.
Q6. Why is the bank’s selling rate higher than the rate I see on Google?
Google shows the interbank rate. Banks add a margin to arrive at the TT selling rate, which increases your final cost.
