Before we deep dive into the calculation process, let’s see how much Vested costs as compared to your other banking partners.
Before we understand the calculation, we need to understand a few terms:
Inter-Bank Rate (IBR) - These are the live currency conversion rates. This is what you would see as 1 USD = ₹88 on Google (this is just an example and not an actual rate).
FX Mark Up - All banks don’t use this IBR, they add a small markup.
Let’s say you want to deposit $100.
Let’s consider that IBR is ₹87 for the ease of calculation and the bank charges a markup of 2%. In that case, you would end up paying (100 x (87 x 1.02)), which is ₹8874, and an additional fixed fee, which is another ₹1,000.
If you do this on Vested, instead of 2%, the bank would charge 1.5% (this is again an assumption to signify that this would be less than what you end up paying directly with the bank), Vested may add a platform fees of 0.3% (this is another assumption and not the actual number).
So now, if we add 1.5% to IBR, it would be (87 x 1.015), which is ₹88.305, and with Vested adding another 0.3%, it would be (88.305 x 1.003) = ₹88.57. What we understand from this is 2 things:
When transferring directly from the bank, you end up paying ₹8874 + ₹1000 = ₹9874, while on Vested, you would only end up paying (88.57 x 100) = ₹8857.
Platform fees charged in this case is (88.57-88.305) x 100 = ₹26.5
Hope this clarifies how the platform fee is calculated and you can understand better from the comparison table above.