Best financial gifts to give to your loved ones

Best financial gifts to give to your loved ones

Gifts are always special. More so, if they are thoughtful. We usually put in a lot of effort when it comes to giving something special to our loved ones.

However, the best way to show how much we care is by securing their financial future with gifts that aid in fulfilling their dreams and ambitions.

Sure, a handbag, a car, or even the latest phone sounds like a tempting gift.

However, these are depreciating assets that only hold a temporary value. They will be discarded after a few years, rendering the gift devoid of any financial value.

The idea here is to not get inclined toward materialism but look for a present whose value appreciates over time. So, let’s consider some of the best financial gift ideas that might add greater value to the financial aspirations of your loved ones!

1. Open a bank account One of the best financial gift ideas is opening a bank account for your child, younger sibling, and other loved ones. The best thing is that the account holder need not necessarily be 18 years of age. You can open a basic savings account in a bank for a minor as well, making this gift option available for a lot of people. This will help inculcate a saving habit in them from an early age.

Moreover, they can see all the gift money multiplied by earning the interest on the savings account. To go the extra mile, you can collect all the funds in this bank account and invest it in a Smallcase for better returns!

Wondering how to select a Smallcase for investing? Read our article on How To Select The Best Smallcase?

2. Create a Fixed Deposit A fixed deposit (FD) makes for another rewarding financial gift because of the many benefits it attracts. You can deposit a lump sum amount as a fixed deposit in the name of your loved one.

This is one of the best financial gift ideas for contingency benefits and shortterm financial goals. FDs also offer a higher rate of interest than a savings account. Although the interest earned on FDs is taxable, you can claim a deduction as per section 80C of the Income Tax Act, 1961. The best part is that the earnings come under the Exempt-Tax-Exempt category.

Furthermore, FDs qualify as safe investments and are risk-free. This is primarily because they are not market-driven. Unlike other investment tools, you get an assured amount of money at maturity.

Among other benefits, FDs are also liquid assets. Your loved ones can encash it as and when they want. However, there is a penalty for premature withdrawal.

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