A Guide to Smart Financial Gifts That Keep on Giving

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Financial gifts are generally not at the top of your mind when you think about giving presents. But they are indeed the most loving way of showing care and affection to your loved ones. Not only do financial gifts secure the future, but they also help in accomplishing one’s life goals. This makes them an ideal gift on occasions like Mother’s Day, Father’s Day, Raksha Bandhan, New Year and so on. This blog discusses the different financial gifts that you can consider gifting to your near and dear ones.

Fixed Deposit (FD)

Life is full of surprises and unexpected events can happen at any time. Therefore, having a financial safety net is important. And since FDs provide a safe and steady return, they can be a reliable investment option. For this, you can deposit a lump sum amount of your choice in the name of your loved one as a fixed deposit. This fund is helpful in meeting short-term financial goals as well as during emergencies.

FDs offer a higher rate of interest, which can help the receiver of the gift to grow their money. They are further risk-free, which makes them one of the safest investments. Also, FDs are liquid assets, which means your loved ones can encash them anytime. However, it is important to note that a penalty is charged for premature withdrawal.

Insurance policies

These are great to protect your loved ones. It provides a sense of security, which is a great feeling that you can give one on their special day. You can either buy individual or family health plans. Usually, group policies help you get coverage at a cost-effective price. Mediclaim insurance could also be a good choice, seeing the rising costs of hospitalisation. These plans not only safeguard your loved one but also offer tax benefits that further add to your savings. This gesture showcases your commitment to their well-being, which is sure to bring a smile to their face.

Mutual funds

Mutual funds offer you the opportunity to grow your money by making investments in diverse instruments. They appreciate value, which is great for supporting the long-term financial goals of your loved ones. You can invest in a mutual fund either in debt or equity category at just ₹500.

Systematic investment plans (SIPs) are one great option to imbibe disciplined savings habits. They further help stay invested across market cycles. You can open SIP in the name of your child and deposit regularly till the age of 18. This way, you can make the most of the power of compounding interest and multiply the initial sum into a substantial amount over time.

Stocks

They are an excellent way to introduce your loved ones to capital markets. Stocks basically signify ownership in companies. They offer returns that can handle inflation and build a corpus for long-term goals, such as a child’s education, marriage, etc. All you have to do is choose the quantity of stocks and transfer them into the receiver’s name. Historically, they have outperformed most other investments, which makes them a compelling gifting idea.   

Gold

This one is a bit of a traditional financial gifting idea that you can give to your loved ones. Gold is more than just a symbol of luxury, it’s a wise investment that can increase over time. Gold coins, bars, jewellery, ETFs (Exchange-Traded Funds) and savings plan are the different options you can choose from.

Enrol in a financial literacy course

If it’s someone younger and you want them to learn about money management early in life, then this is the option you can go with. There are financial literacy courses available both online and offline that can impart knowledge and help them get insights into various investment alternatives. Choose a course that can aid your loved ones in managing risk and strategising for the future. This will empower them to make well-informed decisions about their finances.

Endnote

Financial gifts can indeed be a meaningful way to contribute positively to someone’s financial well-being. They offer benefits that extend well beyond the immediate joy of receiving a present.

Gift cards, for instance, are another option that provide a flexible option that allows recipients to decide how best to utilise your gift. You can consider purchasing gift cards with Kotak811 cards and enjoy the added benefits of digital banking convenience.

To further elevate the value of financial gifting, you can also introduce someone to the concept of a zero balance savings account. They can also empower recipients and encourage sound financial habits without the worry of minimum balances. These gifts are valuable investments in financial well-being and education, they truly keep on giving.

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This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empanelled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees, and contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.