When I was much younger, my mom, Sally, now a retired accountant, would go to the bank to send money to my cousins living in Hong Kong for Lunar New Year, also known as Chinese New Year. It was a fairly lengthy process and my mom would sometimes grumble about the fees or the exchange rate markups.
Luckily, it’s easier now to send monetary gifts for Lunar New Year, from Vietnam to China and beyond. In many instances, it’s also much cheaper, thanks to money transfer apps like Remitly.
Why Do We Send “Lucky Money” for the New Year?
Lunar New Year is a huge, multi day festival and one of East Asia’s biggest holidays. Often called the Spring Festival, it marks the end of winter and ushers in a new year—the Year of the Ox, for 2021. In Chinese culture, it means a fresh start. It’s a time for honoring ancestors, for feasting, and for exchanging gifts.
Elders also give younger family members money for good luck. This Chinese tradition, called “lucky money,” or hongbao in Mandarin, is symbolized by the red envelope.
For instance, during Vietnamese New Year (Tết), families also give red envelopes. Elders give money to younger people along with advice and words of wisdom. The lucky money in Vietnamese is known as li xi.
Nowadays, digital “red envelopes” have become more common. This is thanks to the rise of mobile wallets and mobile payment platforms like Vimo and MoMo in Vietnam, and Alipay and WeChat Pay in China. China is the world’s largest mobile payment market, in fact.
If you can’t be with your loved ones to shower them with gifts or red packets, you can still send them virtual red envelopes. We’ll walk you through the steps to sending money for Lunar New Year from overseas.
How to Send a Digital Red Envelope
Are you planning to give digital hongbao or li xi this year? Since the weeks leading up to Chinese New Year or Tết will be extremely busy, it’s a good idea to prepare in advance.
Starting early helps you avoid delays. Depending on the country you’re sending money to, banks may close on the first day of Lunar New Year. Some close for multiple days following the official holiday.
My mom would go to the bank at least two weeks before the start of the holiday so she has plenty of time. She’d tell my cousins to expect her gift by the first day of Chinese New Year.
Planning ahead also gave her a chance to compare exchange rates to get the best deal.
Researching Exchange Rates And Fees
You’ll need to pay to make a transfer, whether in fees, in exchange rate markups, or both.
Most banks and money transfer companies will charge what’s called a transfer fee. It’s either a flat rate, depending on the transfer method and final destination, or a percentage or the total amount sent.
Exchange rate markups will vary. Our guide to exchange rates will help you understand just how exchange rates are determined. Use the mid-market rate for the currency as a way to compare the exchange rates for each financial institution.
Keep in mind that money transfer companies may offer a promotional exchange rate for first-time users or as part of a marketing campaign. Lunar New Year could be a good time to take advantage of such promotions.
What’s more, some services may waive fees if you send larger amounts, or provide a discount based on the number of times you send money.
Choosing the Right Service for You
Cost isn’t the only consideration, however. Lorelie L. sends money to her family during holidays like Lunar New Year to her family living in the Cagayan Valley in the Philippines.
She focuses on the reputation of the money transfer service. One of her preferred methods is Remitly, for this reason.
If you’re not sure, research online reviews and ask around.
“I used to receive money from my mom when I was still in the Philippines and it arrived quickly,” she says. “So, I trusted the company my mom chose and used them when it came time to send money to my grandparents for the holidays.”
In Lorelie’s case, she was looking for a service that was not only reliable but also fast.
While there may not be one company that ticks off all your desired qualities, look for one that will offer you the majority of what you want. For example, you might trade off a slightly higher exchange rate for very quick transfer speeds.
Whichever option you choose, we recommend skipping the bank this year. Most of them offer international wire services, but they tend to come with high fees and unfavorable exchange rates. Instead, consider switching to a money transfer app like Remitly.
Using an App to Send Lunar New Year Gifts
The COVID-19 crisis has accelerated growth of money transfer apps, and this year is no exception. Because of pandemic-related restrictions at home and abroad, it may be easier to transfer money online.
Not only is sending with an app more convenient, but it tends to be faster. Just think of the time you’ll save driving to and from your home.
When you use apps like Remitly, you can easily see their fees and that day’s exchange rate. In most cases it’s one of the cheapest ways to transfer money since digital companies tend to have less overhead costs.
Most of these apps will allow you to transfer money to Asian countries like China and Vietnam, but check before you create an account.
What Information Do I Need Before I Send?
In all cases, you’ll need to include your name and address and your recipient’s full name and phone number. If you’re transferring to their bank account, you’ll also need details such as the account number and the name of the bank.
To use a money transfer app, you will also need your own debit or credit card information if paying for your transfer via card.
If sending to a mobile wallet, you generally need only your recipient’s name and the phone number and/or email associated with their digital wallet account.
Once you review the information, you can send the money in time for Lunar New Year’s Eve.
Further reading: Lunar New Year traditions
The Bottom Line
Sending money can be as easy as downloading an app. That way you’ll be able to save money on your transfer and ensure it arrives on time for our loved ones.
Then you can sit back, relax and give yourself some time to celebrate the Lunar New Year, however that looks for you.
Make offerings to your ancestors. Set out peach and apricot flowers. Watch the CCTV Spring Festival Gala. Enjoy dumplings and sweet rice cakes. Whatever your traditions, it’s a great time to embrace a fresh start.
Happy New Year!