How Festival Seasons Affect Money Transfer Rates to India

It's Diwali, and the air back home is thick with the scent of sweets and the glow of diyas. Or maybe it's Eid, and everyone is rushing to the store for their last-minute shopping.

And you are thousands of miles away, unable to celebrate it with your family. But you can help them celebrate the occasion to the fullest extent by sending them funds

Thousands of people abroad send extra funds for gifts, feasts, and even those last-minute gold purchases (because no Indian festival is complete without a bit of bling).

But do these festival seasons affect money transfer rates to India? Let's explore it in this read.

Do festivals cause remittance jumps?

Yes, festivals like Diwali, Eid, and Holi trigger a significant surge in remittance activity. The numbers prove this happens every year.

In 2013, UAE Exchange reported a 27% increase in remittances from January to September, with even larger increases during major festivals such as Eid, Diwali, and Christmas. Why? Expats were sending more money home because of better exchange rates and festival expenses.

Recently, India received $129 billion in remittances in 2024, making it the world's top recipient. And here's something interesting. The Diwali spending index among urban Indians reached 117 in 2024, up from 96 the previous year.

Transfer costs typically increase during these festival seasons because the spike in transaction volume leads to higher operational demand for money transfer services.

State Bank of India's Trust Exchange in Dubai saw 10% more remittances during Diwali and Eid compared to the previous year.

Even though the Indian rupee got stronger (which usually means worse rates for senders), customers still paid higher fees to make sure their families got money on time for celebrations.

With the rise in volume, many service providers adjust their pricing structures, often resulting in higher effective costs for consumers despite promotional campaigns.

Moreover, it's a cultural thing. People living abroad often send money to their families to reinforce the cultural practice of "sending home money for the occasion."

These transfers carry a more profound socio-cultural significance, strengthening family bonds and helping people uphold tradition.

What factors influence transfer costs during festivities?

Several factors contribute to the increased transfer costs during festival periods:

Increased transaction volume

Millions of families overseas send money home for gifts, feasts, and celebrations during major festivals.

When more people want to send money at the same time, companies can't handle the rush without spending more on operations. They usually pass these extra costs to customers.

Digital payment data backs this up. Before Diwali 2021, UPI, debit, and credit card transactions went up significantly. This shows people spend much more during festivals, which means more money gets sent from abroad, too.

Recent surveys found that Indians spent around Rs 1.85 trillion during Diwali 2024 alone, with 70% buying pooja supplies and festival groceries.

Currency market dynamics

When more people want Indian rupees during festivals, the currency gets slightly stronger. This means you get fewer rupees for your dollars or euros, making transfers more expensive.

But don't worry too much about this. The effect is usually small and doesn't last long. Bigger economic factors, such as inflation, oil prices, and global markets, have a much greater impact on exchange rates than festival remittances.

For example, in 2023, remittances increased 12% during Diwali, but this barely moved exchange rates compared to other economic factors.

In 2022, despite more festival money coming in, the rupee actually got weaker because of global inflation and rising oil prices.

Transfer cost adjustments

Money transfer companies change their prices when demand goes up.

Even when they advertise special deals with lower fees or better exchange rates, the total cost usually goes up by 2-3% during busy festival times like Diwali.

This isn't just companies trying to make more profit, though. They genuinely have higher costs from handling more transactions.

Special promotions and incentives offered during the festival rush

During festival seasons, money transfer companies use several strategies to manage increased demand while maximizing revenue opportunities.

Promotional campaigns

Many money transfer providers run festive campaigns during high-demand periods such as Diwali and Eid.

These campaigns often feature discounted fees or improved exchange rates for specific customer segments or transfer amounts.

Companies like the State Bank of India (California) offered 20 paisa higher exchange rates during Diwali to attract customers. Western Union and ICICI Money2India also run special festival promotions.

However, these promotional rates usually only apply to specific situations and may not be what most customers actually get.

Loyalty programs

To retain customers during high-demand periods, money transfer providers often introduce loyalty programs offering cashback rewards, bonus points, or discounts for multiple transactions within specified periods.

These programs are particularly common during festivals when families may send money for multiple purposes, such as gifts, food, and festive expenses.

Fee structure adjustments

Companies offer deals like "zero fees on large transfers" or "cheaper rates for bigger amounts."

But be careful, as when they waive fees, they often make up for it by giving you worse exchange rates. So you might end up paying the same or even more overall.

Digital-first services like RemitBee maintain transparency by showing fees and exchange rates upfront, allowing customers to understand the total cost before completing transfers.

How do money transfer service providers handle the festival rush?

When festivals like Diwali and Eid arrive, money transfer volumes explode overnight.

The best providers prepare behind the scenes to keep your money moving smoothly when millions of families send funds home.

Hiring additional staff

Support teams grow temporarily to handle your questions, verify identities faster, and process more transactions without delays.

Extending operational hours

Customer service and processing teams work longer shifts, with many offering 24/7 live chat sessions to help you whenever you need it.

Allocating extra funding and liquidity

Companies secure more money in key areas (especially Indian rupees) to prevent bottlenecks when demand peaks.

Reinforcing tech infrastructure

Servers, payment systems, and mobile apps get upgraded to handle massive traffic while keeping your transfers fast and secure.

Partnering with local banks and payout networks

Companies work directly with Indian banks to speed up delivery and make sure pickup points stay well-stocked and responsive.

Why timing matters for festival transfers

Festival money transfers follow predictable patterns similar to increased pricing in other industries. Understanding these patterns can help optimize transfer costs:

Send early to avoid peak pricing

Send money 1-2 weeks before festivals, and you'll usually get better rates and lower fees.

Companies like ACE Money Transfer from Australia report that sending money early during festivals is crucial, allowing families to receive funds on time for last-minute preparations.

This shows just how crazy the demand gets during festival season.

Monitor exchange rates

Using apps like XE or Google to track INR rates daily can help identify favorable exchange rate windows.

Some applications offer rate alert features that notify users when rates reach specified thresholds.

last-minute transfers

Waiting until 2-3 days before festivals coincides with peak demand periods when providers implement their highest pricing. Planning ahead can result in savings on transfer costs.

Instant money transfer services highlight the operational challenges and demand spikes during these periods.

Choose efficient providers

Traditional banking institutions often charge higher fees compared to digital-first money transfer services.

Modern apps typically offer more competitive rates with faster processing times, making them more cost-effective for festival transfers.

How RemitBee optimizes transfers during peak seasons

RemitBee offers cost-effective solutions for transferring money to India during busy festival seasons such as Diwali and Eid:

• Competitive exchange rate margins
• Fee-free transfers for amounts over CAD 500
• Fast, secure transfers with real-time tracking and 24/7 support
• Send money to India with RemitBee and save this festival season.

Frequently asked questions

Here are some frequently asked questions related to this topic:

How do festival seasons impact money transfer rates to India?

Festival seasons, such as Diwali and Eid, create surges in remittance activity, which typically leads to higher transfer costs due to increased operational demand and adjusted pricing structures by service providers.

Why do money transfer rates increase during Indian festivals?

The rise in transaction volume during festivals increases operational costs for providers and creates higher demand for transfer services, resulting in adjusted pricing that typically leads to 2-3% higher costs during peak periods.

How can I save on transfer fees during the festival season?

Plan transfers in advance, compare total costs (not just advertised fees) across providers, and consider digital-first services that offer transparent pricing. Sending money 1-2 weeks before festivals and monitoring exchange rates can result in significant savings.

How can I ensure my money reaches India quickly during peak seasons?

Use money transfer services that provide real-time tracking and have proven capacity to handle high transaction volumes. Avoid waiting until the last minute, as processing times may be longer during peak periods.

Does RemitBee offer better rates during festival seasons for transfers to India?

RemitBee maintains competitive exchange rates and offers fee-free transfers for amounts over CAD 500 year-round, including during peak festival periods, with fast processing times and transparent pricing.