Foreign remittance

AAA

DEFINITION of 'Foreign remittance'

A transfer of money from a migrant worker to their families or other individuals in their home countries. In many countries, remittance constitutes a significant portion of the GDP (up to a third in some cases). The United States is the leading source of foreign remittances, followed by Russia and Saudi Arabia. The top recipients are India, China and the Philippines. So much money is being remitted, the G8 and the World Bank are attempting to monitor and regulate remittance costs. 

INVESTOPEDIA EXPLAINS 'Foreign remittance'

According to social scientists, since it's so widespread, remittance has implications that extend beyond individual finance. For example, since remitting involves financial institutions, people who send and receive remittance are likely to have bank accounts, which promotes economic development. Remittances can be lifesaving in emergencies, such as natural disasters and armed conflicts, when the recepients' other sources of income disappear. Remittance payments are difficult to track, and there is some concern that they can be used in terrorist financing or money laundering.

RELATED TERMS
  1. Remittance

    The process of sending money to remove an obligation. This is ...
  2. Asian Infrastructure Investment ...

    The Asian Infrastructure Investment Bank (AIIB) is an international ...
  3. Asia-Pacific Economic Cooperation ...

    Asia-Pacific Economic Cooperation (APEC) is a 21-member economic ...
  4. Back Pay

    The amount of salary and other benefits that an employee claims ...
  5. Payroll Card

    A prepaid card onto which an employer loads an employee’s wages ...
  6. Lilly Ledbetter Fair Pay Act

    A federal law designed to ensure equal pay for all workers, regardless ...
RELATED FAQS
  1. What is the difference between a current account deficit and a trade deficit?

    The terms current account deficit and trade deficit are often used interchangeably but in fact they have substantially different ... Read Full Answer >>
  2. What are some risks a company takes when entering a currency swap?

    Currency swaps are commonly used to hedge loan transactions. Often, an American company and a foreign company exchange the ... Read Full Answer >>
  3. How does the always be closing (ABC) strategy benefit a salesperson's sales funnel?

    It is good practice in sales to always be closing, because it's common for a salesperson's sales funnel to be leaky. When ... Read Full Answer >>
  4. What does a positive capital account balance mean?

    A positive capital account balance indicates that more money is flowing into, rather than out of, a country. A country's ... Read Full Answer >>
  5. What does a negative balance in the capital account mean?

    A negative capital account balance indicates a predominant money flow outbound from a country to other countries. The implication ... Read Full Answer >>
  6. How does a capital account illustrate the strength of investment markets for a country?

    A nation's capital account can be a major indicator of how much interest the nation generates among foreign investors. A ... Read Full Answer >>
Related Articles
  1. Economics

    Introduction To Remittances

    Remittances are an important factor in the global economy, and help drive growth both at home and abroad.
  2. Savings

    Is A Premium Checking Account Worth It?

    Premium checking accounts give you free checking and other perks in return for keeping a certain balance in the bank. Is that the best use of your money?
  3. Savings

    Top Premium Checking Accounts of 2015

    Which banks offer the best deals for premium checking accounts – and what do you have to do to qualify for one?
  4. Economics

    Chinese Opportunities For A Changing Child Policy

    China's one-child policy is changing, and investors are looking for ways to cash in. The reform might not have the effects that many anticipate, however.
  5. Personal Finance

    Is University Prestige Really That Important?

    Getting into a top school doesn't hurt, but it's not the real driver of who goes on to do well in life, as some provocative research demonstrates.
  6. Savings

    20 Ways To Pay Less At Costco

    There are plenty of little-known Costco shopping hacks that can save you big bucks at the register, and help you avoid the notorious spending hangover.
  7. Budgeting

    10 Worst And Best Vacation Cities In The U.S.

    The many costs of planning a vacation will put a stress on most people’s finances, but where you choose to go can be what really makes your travel budget.
  8. Retirement

    Tips for Boosting Your Retirement Income

    Here are some best practices on how to generate as much retirement income as possible.
  9. Mutual Funds & ETFs

    The EMAG Emerging Mkts Bond ETF: Worth the Risk?

    The Market Vectors Emerging Markets Aggregate Bond ETF (EMAG) might offer long-term rewards, but is now the best time to jump in?
  10. Retirement

    What New Grads Need To Do On Their First Job

    It's never too early to start saving aside something for retirement. But what purpose could a retirement account serve when someone just started working?

You May Also Like

Hot Definitions
  1. Net Worth

    The amount by which assets exceed liabilities. Net worth is a concept applicable to individuals and businesses as a key measure ...
  2. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  3. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  4. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  5. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  6. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
Trading Center