Before we deep dive into the calculation process, let’s see how much Vested costs as compared to your other banking partners.

Calculation

Before we understand the calculation, we need to understand a few terms:

1. 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). 

2. 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 via our partnered banks, due to bulk deal arrangements we have, instead of 2%, the bank would charge ~0.5% (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 ~1% (this is another assumption and not the actual number). 

So now, if we add 0.5% to IBR, it would be (87 x 1.005), which is ₹87.435, and with Vested adding another 1%, it would be (87.435 x 1.01) = ₹88.309. What we understand from this is 2 things:

1. When transferring directly from the bank, you end up paying ₹8874 + ₹1000 = ₹9874, while on Vested, you would only end up paying (88.309 x 100) = ₹8831.

2. Platform fees charged in this case is (88.74-88.309) x 100 = ₹43

Hope this clarifies how the platform fee is calculated and you can understand better from the comparison table above.