What is a value date?

Bank advices for foreign payments often show two dates: the date the message was processed and a "value date". For a freelancer, consultant or agency receiving money from abroad, the value date tells you when the money is treated as yours, and it also matters when you book a currency conversion with your bank.

What does value date mean in simple words?

The value date is the date on which incoming funds are agreed to be placed at your disposal, which can differ from the date your client paid.¹ The European Central Bank (ECB) defines it as "the date on which it is agreed to place a payment or transfer at the disposal of the receiving user".¹

• Availability: The value date says when the money is usable.¹
• Interest: The ECB notes that the value date is the reference point for calculating interest on funds held in an account.¹

In short, the value date is the "money is yours from" date.

Why does the value date matter for Indian exporters and freelancers?

The value date matters because it fixes when funds count as received, when a currency deal settles, and when a delay starts.¹²

• Bank compliance: FEDAI Rule 4.5 says banks should endeavour to credit inward remittances received during forex market hours on the same business day, and pay interest at 2% over the savings bank rate for delays beyond the set limits.²
• Interest: If interest is paid or charged on the account that receives your export proceeds, the value date is the date the bank counts from.¹
• Currency conversion: The value date sets when an agreed conversion with your bank is delivered.²

A translator paid by a client in Japan, or an architect paid by a developer in the UAE, can use the value date on the bank advice to check whether a delay happened before or after the money reached the Indian bank.

How does the value date work in forex deals with Indian banks?

The Foreign Exchange Dealers' Association of India (FEDAI) sets standard delivery dates for foreign exchange contracts in Rule 5.2:²

For example, a SaaS company booking a forward contract to sell dollars in three months is fixing a value date beyond spot, and FEDAI says the duration of a forward contract is computed from the spot value date.²

How do you check the value date on a payment?

You check the value date on the bank's credit advice and compare it with the client's payment confirmation.¹²

1. Read the advice: Find the value date next to the processing date on the bank advice.¹
2. Compare dates: If the value date is much later than the client's debit date, ask where the gap arose.
3. Check weekend dealing: FEDAI Rule 1.2 allows banks to deal with individuals, including proprietary firms, on Saturdays, Sundays and holidays, including value cash transactions, as per each bank's internal policy.²

For typical timelines, read how long an international wire transfer takes to reach India.

What is the difference between a value date and a settlement lag?

The value date sets when funds should be available, while the settlement lag is the gap between a payment being accepted and finally settled.¹³

For more on the second term, see settlement period.

What do people get wrong about value dates?

The usual mistake is reading the value date as the date the client paid.¹

• Client's date: The value date can be later than the day the client's bank debited the client.¹
• Late bank-to-bank delivery: FEDAI Rule 8.3 lets a bank that delivered funds late offer them "on value dated basis", meaning credited with the original value date.²

Keep both dates when you chase a delayed payment.

Which terms are related to value date?

These terms come up with the value date:

• Settlement period: how long a payment takes to complete.
• Forward contract: a forex contract with a value date beyond spot.
• TT buying rate: the rate your bank uses to convert a wire.
• Inward remittance: the payment the value date applies to.
• Wire transfer: the bank-to-bank route that carries the payment.