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How to choose the best financial gifts for your loved ones

Malini T
·2-min read

Like a financial shield, a monetary commodity whose value rises over time and remains secure even under unpredictable market conditions acts, and gifting your loved ones with such an asset is a thoughtful act.

The beneficiary will even bring your gift to good use during a time of need, aside from enhancing their savings.

But, it's crucial to pick the right asset. Take a look at those assets that are cherished over time to give a loved one an ideal present.

Fixed Deposits

The cash you give to your loved ones will make its way to their bank account. Parked there, the amount at 5-6% per annum would receive interest, which they are more likely to use when they desperately need cash. Today, you can potentially generate an asset in the form of risk-free deposits if you use this amount to give them a fixed deposit instead.

A 5.60% interest rate that goes up to 5.85 per cent for senior citizens can be earned through these fixed deposits. In comparison, fixed deposits are not related to market powers, thereby providing elevated flexibility. The recipient may still renew the fixed maturity deposit, which tends to establish an even bigger corpus in the long term.

Savings Bond

Savings bonds are bonds issued by the government, most of which are available from nationalized banks and their subsidiaries. At a rate of 7.75 per cent per annum, you will purchase these bonds and receive interest. The bonds are fixed for 7 years until bought. The best thing is that the amount you will spend is adjustable.

These are great gifts for kids when you pay at least Rs. 1.000, and as long as you do so, the money you will invest in these bonds has no limit. The total will rise every year with interest and become an advantage for your loved ones.

Mutual Funds

Mutual funds deliver better returns, but it is less expensive to invest in tax-saving mutual funds, unlike trading direct inequities. Via an investment management agency, you can contribute the money you wish to donate in a mutual fund offering. You will help a strategist understand the complexities of investing. Also, do your homework before deciding to sort out the top paying mutual funds.

To choose the most advantageous choice, perform a detailed review of deals from banks and NBFCs before you choose an investment as a gift. Be optimistic that with the time you will help them create a powerful asset by giving them to your loved ones.