Best Financial Gifts You Can Give to Your Sister on this Raksha Bandhan

How about taking a step further this year from the usual gifts and invest in a financial gift that enhances her financial independence. What occasion could be better than Raksha Bandhan to protect your sister's financial future by gifting her a financial gift.

Recently, I got a call from my friend Vicky. He said, "Hi Mitali, I need your help to select gifts for my two sisters. I am confused as what to gift them. I was thinking of gifting them handbags and some cosmetics. I am not good at selecting gifts, so I thought if you could help me out."

I replied, "Sure, I will help you to select best gifts for your sisters. So Vicky, in my opinion all these gifts such as handbags, smartphones, cosmetics, etc. are common and I believe you should gift something special and enduring. Have you ever thought of gifting a financial gift to your sisters?"

Vicky replied, "A financial gift? What exactly should I plan as a financial gift?"

To which I responded "A financial gift will provide your sisters with financial security for long-term. Considering the uncertainties of COVID-19 pandemic, where everyone is trying to gain financial stability, what could be a better gift than a financially secured future."

Vicky excitedly asked, "I did not even think about it this way, according to you what will be the best financial gift? Please guide me through..."

I explained further, "You may consider gifting or investing in your sister's name in a financial instrument that could protect and support your sister's financial future."

Here are some financial gifts you can plan to gift your sister on this Raksha Bandhan:

1. Gift her an SIP

The first option as a financial gift you may consider is a Systematic Investment Plan (SIP) of a worthy mutual fund scheme. SIP in mutual funds will prove to be an effective gift, which can support your sister's goals of planning an exotic vacation, saving for her wedding, purchasing her dream car, etc.

SIP in a mutual fund will allow you to invest a certain amount regularly with monthly/quarterly intervals and help her build a large corpus systematically. You can invest in a SIP with an amount as low as Rs 500 or Rs 1,000 a month and may even gradually increase the amount with 'Step-up SIP facility'.

However, mutual funds are market linked and they do carry risk, ensure your risk appetite and select worthy mutual fund schemes with proven track record. You may consider investing in large cap schemes that can assist your sister in accumulating handsome wealth in a long run. So this Raksha Bandhan gift your sister an SIP in her name to fulfil her dreams.

2. Open a savings account

You can open a savings account in her name, where she can save a portion of her hard-earned money. Instead of gifting her some cash on Raksha Bandhan, deposit the same in the savings account. She can benefit from the interest earned through this account.

This will make her more independent and help her instil the habit of saving regularly. For her convenience, introduce her to online banking as well. Teach her how to transfer money online, pay her bills and shop online using mobile applications and E-wallets.

If your sister already has a savings account, you can open a new account in her name and ask her to maintain this as an emergency fund. In these times of crisis, it is essential that one builds an emergency fund as a safety net. You as a brother have promised to protect her in every situation. This account can be effectively maintained for her financial security.

3. Get a medical insurance policy in her name

With increase in medical expenses and rise in threat to one's health amidst the pandemic, it is crucial for an individual to hold a health insurance policy that covers the cost of healthcare. Buying a health insurance plan in your sister's name, will be helpful for her during medical emergencies.

Considering today's lifestyle and rising health issues, a health insurance policy will help your sister get good timely medical treatment, without any hassles or worry about medical bills. You can buy a health insurance plan, if she doesn't have one; or you may renew her existing health insurance plan, if she already has one.

Make sure to evaluate all the conditions and features before selecting the health insurance policy that best suits your sister's needs. You can easily purchase medical insurance online within few minutes.

4. Invest in Gold ETF

Gold is a very popular asset class in India and considered as a most auspicious gift on such occasions. So, gifting your beloved sister a gold this Raksha Bandhan is a very good idea, as the value of the gold keeps increasing with time. How about instead of gifting her physical gold, you invest in gold ETFs and/or gold mutual funds in her name.

You can gift her gold in a unique way, by investing in these paper gold investment avenues, which are efficient ways to invest in gold. It can secure her financial future. Physical gold carries high holding cost, including making charges etc. and the risk of storage.

Gold as an asset class is saviour in times of economic crisis and volatile market conditions. This gift will ensure your sister's financial security in long-term.

5. Assist her to clear debt burden

If your sister may be under a debt burden, you can help pay-off her debt burden. It can prove to be a memorable practical gift and a relief for your loving sister. You can help her pay off the debts (if any) to whatever extent.

Instead of expensive materialistic gifts, paying-off her debt burden could prove to be a worthy financial gift for her. It can be a huge relief for your dear sister.

6. Invest in her financial knowledge

If you want to gift your sister a special gift that will help her in the long run, make her financially secure to face any uncertainties in future. You must consider enhancing her financial knowledge. Once she is financially literate, she can plan her finances independently and even be a financial guardian to her family to make informed financial decisions in life.

To understand the money management and nuances of financial planning one needs to be financially literate with adequate financial knowledge. You can simply present her a financial gift that empowers her with financial knowledge, by enrolling to an e-course that guides her with the technical aspects of money management and improves financial awareness.

So, what are you waiting for...? Raksha Bandhan is on its way start planning a special gift for your dear sister.

Yes, you can consider gifting your sister any of the above mentioned financial gifts this Raksha Bandhan! It can be a great way of expressing your brotherly love and care, this festive season.

PS: PersonalFN understands that not everyone holds adequate financial knowledge. We encourage you to gain and enhance your financial knowledge and become a 'Financial Guardian'. You should understand the financial planning elements to become your own financial planner and guide your family through these challenging times.

And in case you are wondering how to become a financial guardian for your family, PersonalFN's latest special initiative, the "Certified Family Guardian" offers you an exclusive opportunity to learn the finer nuances of money management.

Organised into eight modules with 24 extensive videos, the "Certified Family Guardian" will help you with all the relevant tools and learning modules needed to get better at money management. It also offers a host of other benefits to help you make informed investment decisions. Read here for complete details.

So, if you wish to improve your financial knowledge, enrol to "Certified Family Guardian" course today!

Happy Raksha Bandhan!

Warm Regards,
Mitali Dhoke
Jr. Research Analyst

Join Now: PersonalFN is now on Telegram. Join FREE Today to get ‘Daily Wealth Letter’ and Exclusive Updates on Mutual Funds