What Is a Remittance?
It's just money you send internationally. Nothing more, nothing less. But for Nepali Americans, it is also one of the most financially significant decisions you make every single month — and most people make it without a plan.
In this module: What a remittance actually is (no jargon), why Nepali Americans send so much, how the money physically moves from your U.S. bank to Nepal, the vocabulary you need, and why this matters for your own finances — not just your family's.
Nepal's remittances exceed the combined total of all foreign aid and foreign direct investment the country receives. The money Nepali families abroad send home is the backbone of the national economy.
What a Remittance Actually Is
The word sounds formal. The reality is simple. Let's clear up the confusion before anything else.
A Remittance Is Just Money You Send Home
A remittance (pronounced "reh-MIH-tense") is money that a person living abroad sends to someone in another country — usually a family member. That's it. If you work in New York and send $300 to your mother in Kathmandu, you just sent a remittance.
The word is used by banks, governments, and economists because they track these flows globally. But for you, it's simply: money you earned in the U.S. that you're sending to Nepal.
Remittances are perfectly legal, widely used, and supported by licensed services regulated by the U.S. government. There is nothing unusual or risky about sending money home — the method you use is what determines whether it's safe and smart.
Is This the Same as a Wire Transfer?
Not exactly — but there's significant overlap. A wire transfer is a specific technical method of moving money between banks. A remittance is the broader concept of sending money internationally to family. Remittances can be sent via:
- Wire transfer: Bank to bank, using the SWIFT network — typically $25–$50 fee plus an exchange rate markup.
- Money transfer apps: Wise, Remitly, Western Union, Xoom — usually cheaper and faster than banks.
- Mobile wallets: eSewa and Khalti in Nepal — recipients receive directly in their phone wallet without a bank account.
- Cash pickup: Sender pays online; recipient collects cash at a local agent in Nepal.
- Hundi/Hawala (informal): Operates outside the banking system — no legal protection, not recommended.
Why Nepali Americans Send
So Much Money Home
The reasons are layered — cultural, emotional, financial, and practical. Understanding why you send is the first step to sending more strategically.
Family Support — Daily Living
The most common reason. Parents, siblings, or grandparents depend on this money for food, rent, utilities, and everyday expenses. For many families in Nepal, a single worker in the U.S. is the primary income source for an entire household.
Healthcare Emergencies
Nepal's public healthcare is limited and often expensive for serious conditions. When a family member gets sick, the money needed arrives from abroad. Medical emergencies are unpredictable — and one of the most urgent remittance triggers.
Education — Children & Siblings
Funding school fees, uniforms, tutoring, and university for children or younger siblings left in Nepal is a major remittance motivation. Education is seen as the investment that breaks the poverty cycle for the next generation.
Building or Buying a Home
Owning a home in Nepal is a major cultural milestone. Many Nepali Americans are systematically sending money to construct a family house over multiple years. 13.2% of Nepali Americans have already invested in Nepal, primarily in real estate.
Cultural & Social Obligation
Festivals (Dashain, Tihar), weddings, funerals, and social ceremonies carry financial expectations. The person abroad is often expected to contribute — and declining can carry social costs within the family and community.
Investment in Nepal's Future
Some Nepali Americans are building long-term assets: funding a family business, investing in land, or preparing a return. For others, remittances are part of a dual-country financial strategy — saving here, building there.
How Your Money Actually
Travels from NYC to Kathmandu
Most people assume the money "teleports" from your account to Nepal. The reality is a multi-step process — and understanding it explains why fees exist, why it takes time, and where things can go wrong.
The 6 Vocabulary Terms
Every Sender Must Know
These words appear every time you send money. Once you understand them, you can compare services accurately and stop losing money to terms you didn't read.
Why This Matters for
Your Financial Future
Remittances are not just a family obligation. They are one of the largest recurring expenses in a Nepali American household — and most people have never given them strategic thought.
$720 a Month Is a Major Budget Line
The average Nepali American sends $8,633 per year — that's $720 every month. For a household earning the median Nepali American income of $45,500, that's nearly 19% of gross income going to Nepal. That is larger than most people's car payment, credit card bill, or monthly grocery budget. Yet most people sending this amount have never formally included it in a budget or asked whether the amount is sustainable long-term.
Fees and Bad Rates Cost
Hundreds of Dollars Per Year
If you send $720/month through a bank that charges $40 per wire plus a 2% exchange rate markup, you're losing approximately $726 per year in fees and markup alone — money that doesn't reach your family, and doesn't stay with you. It simply evaporates. Switching to an optimized service like Wise or Remitly for the same transfers could recover $400–$600 of that annually. Over 10 years, that's $4,000–$6,000 — real money. This module series will show you exactly how.
Sending Without
Destroying Your Own Future
The defining challenge for Nepali Americans is this: your family in Nepal needs support now, and you need to build financial security in America simultaneously. These goals are not incompatible — but they require a plan. Without intentional budgeting, many Nepali Americans find that years of sending have left them without an emergency fund, without retirement savings, and with growing credit card debt in the U.S. — even as the family in Nepal is doing better. This module series gives you the tools to do both.
What You Need to Know
About U.S. Rules
Sending money home is legal and common. But there are rules worth knowing. Under the U.S. Bank Secrecy Act, transfers of $10,000 or more in a single transaction must be reported to the federal government (this is done automatically by the service — you don't file anything separately). Multiple smaller transfers specifically designed to avoid the $10,000 threshold ("structuring") is illegal. For most people making regular monthly transfers of a few hundred dollars, none of this applies — but it's important to know where the rules are.
Nepal's Remittance
Economy in Numbers
These aren't abstract statistics. They are the economic context your transfers live in — and they explain why your family depends on this money, and why you need to send it wisely.
In May 2025, the U.S. House of Representatives passed a bill that would impose a 3.5% tax on all international remittances sent by non-U.S. citizens (including green card holders and visa holders). If signed into law, sending $1,000 to Nepal would cost an additional $35 in taxes — on top of existing fees. The bill would exempt U.S. citizens. As of 2026, the Senate has not yet passed this legislation, but it remains active. Stay informed — this directly affects every Nepali American who sends money home.
Sources: World Bank 2023 · IIDS / Embassy of Nepal / Asia Foundation 2024 · IOM Nepal · Nepal Rastra Bank FY2024-25 · NEPYORK / NepYork.com
Remittances Are Love — and
They Deserve to Be Sent Smartly
Sending money to Nepal is one of the most generous things you do. It keeps families fed, children in school, parents healthy, and dreams alive. It also powers an entire national economy. But generosity and strategy are not opposites. Every dollar lost to unnecessary fees, poor exchange rates, or informal channels is a dollar that doesn't reach your family. In the next module, we show you exactly how to send money — step by step — so more of it arrives, faster, and for less.
Next: How to Actually
Send Money — Step by Step
You now understand what a remittance is, why you send it, and how the money moves. In the next module, we walk through exactly how to send money to Nepal: which services to use, how to compare rates, step-by-step instructions, and how to avoid the most common — and costly — mistakes.