How is this Platform Fee calculated and how much am I charged?

How is this Platform Fee calculated and how much am I charged?

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


Remittance

HDFC

ICICI

Other Banks

Vested

Fixed Fees

Upto ₹1,000 + GST

Upto ₹1,500 + GST

Upto ₹1,500 + GST

₹0

Real-Time Fund Tracking

Not Available

Not Available

Not Available

Available

Ease of Transfer

Moderate

Moderate

Moderate

Easy

FX Markup (over IBR)

1.6%-1.9%

2%

Upto 2%

1.5%*






* Fees may vary slightly during the date as rates move





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, 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:

  1. 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.

  2. 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.