Last month, I posted about making my first $1,500 investment into international ETFs using direct IBKR and IDFC First Bank. (If you missed that timeline and cost breakdown, it’s here).

To try and bring the remittance costs down even further, I spent the last few weeks digging into every possible alternative - FX Retail, Bharat Connect on BHIM across different banks, you name it.

Today I’ve got a massive update. I managed to score a true zero-markup and zero-processing fees deal using AU Small Finance Bank, and to compare it against my previous direct IBKR setup, I routed it through Paasa this time.

Here is exactly how the process went, the snags I hit, and the final math.

Background:

I already had a fixed deposit with AU Bank, but no savings account.
On May 6th, I got a promotional email from them pushing a digital, zero-balance savings account with Zero Forex Markup and zero processing fees. Since they already had my KYC from the FD, I opened the account instantly online. I skipped the debit card to avoid any extra annual charges.

However, when I logged into their app/net banking to try an outward remittance, Purpose Code S0001 (Investment Abroad) was completely missing. The dropdown only allowed options for education, travel, or medical.

• May 7: Emailed customer care. Total radio silence for a week.
• May 14: Escalated to the Nodal Officer.
• May 15: Nodal office called back, asked for a screen recording of the missing option, which I sent.
• May 25: Finally got a response stating that because this is a capital account transaction, it requires offline processing at a branch.

The Branch Walk-in & Paperwork Hurdle

I headed to my nearest AU branch (about 2km away) on the same day (May 25). They confirmed that even with physical, offline processing, the promotional zero-markup and zero-fee deal would still apply.

I filled out the physical A2 form and handed it over. Because of the US trading holiday, it couldn't be processed that evening, and the bank came back asking for a bunch of extra documentation:

1. OPI Declaration
2. 1-year bank statement from my primary bank (or ITR)
3. Account Confirmation Letter from the broker to prove the overseas account exists.

On the morning of May 26th, I went back to the branch, dropped off the signed physical OPI declaration, and emailed the rest of the docs.

The Timeline & Ticking Clock (May 26th)

• 2:55 PM: Received two back-to-back SMS alerts. One for a GST debit of ₹218.83, and another for the core transfer of ₹1,43,145.00.
• 3:30 PM: Got the formal Debit Advice via email from their trade services team.
• 4:00 PM: Received the official SWIFT copy (MT103 message).
• 5:39 PM: Paasa shot over an email confirming the $1,500 was successfully credited and ready to deploy.
• 6:47 PM: AU Bank sent a final confirmation email explicitly acknowledging the transaction was booked under their "Forex First Initiative" with zero bank charges and zero markup.

The Raw Math ($1,500 Wire)

• Interbank Market Rate: ₹95.43
• AU Bank Rate Charged: ₹95.43 (Literally exact market rate)
• GST on Remittance: ₹218.83
• Total INR Outflow: ₹1,43,145.00

Compared to traditional retail banking bank spreads, saving the usual 20p–50p markup on the currency conversion makes a massive difference, especially as you scale.

Executing the Trades

At 8:40 PM, I placed 3 market orders via Paasa:

• IWDA.L (iShares Core MSCI World): ~$800
• EIMI.L (iShares Core MSCI Emerging Markets): ~$200
• CSNDX.SW (iShares Nasdaq 100): ~$500

Brokerage Costs: The estimated fee displayed was around $1.70 to $1.92 per order (the final calculation updates at EOD via IBKR). This is already a significant step down from the flat $4 minimum I accidentally swallowed last month on IBKR’s fixed plan before switching to tiered.

A Few Questions for the Sub:

1. Is anyone managing to get a true zero-markup FX rate like this through a completely online setup without having to run to a branch? Offline has a risk of a higher rate if the rate is volatile during the day, and the bank rate is out of our control.
2. Thoughts on this specific three-fund ETF allocation for a long-term horizon?
3. Any further optimisation tricks for the IBKR/Paasa fee structure to drag that ~$1.70 per trade lower?

Happy to answer any questions if you’re trying to set up a similar remittance pipeline!

Quick Guide: How to extract your Account Confirmation Letter

If your bank demands proof of the offshore account, here is how to get it:

For Direct IBKR Users:

1. Log in to your IBKR portal.
2. Go to Performance & Reports -> Statements.
3. Under Other Reports, look for Account Confirmation Letter and run/download the PDF. sample here

For Paasa Users (to get your underlying IBKR read-only login):

1. Call IBKR India support at +91-22-61289888 and state your Paasa account number (starts with a "U").
2. They will verify your identity and trigger a temporary password to your email.
3. Use that to log directly into the main IBKR portal, change your password, and follow the direct IBKR steps above to download the letter.

PS: This is a repost after the earlier post was removed by mistake. Do read the earlier deleted post comments.