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7 Financial Gifts For Your Sister This Raksha Bandhan - Outside View by PersonalFN

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7 Financial Gifts For Your Sister This Raksha Bandhan
Aug 7, 2017

With the start of 'Shravana', this 5th month of the Hindu calendar marks the beginning of the festive season every year. Nag Panchami, Narali Purnima, Krishna Janmashtami are the ones celebrated most commonly.

However, the most cherished festival celebrated is Raksha Bandhan 🙂

Do you reminiscence the celebration and excitement of this day?

It starts early in the morning, most often it's a rainy day. Sisters visit their brothers who make promises to protect them; siblings tease each other, chitter-chatter, exchange of goodies, sweets, etc.

Raksha Bandhan signifies the brother-sister bond. On this splendid day of sibling love, a sister knots a sacred thread, Rakhee, around her brother's wrist and wishes the best for him. The brother in return promises to protect her through every situation of her life.

It is common to see men flocking the market this weekend to get the best possible gift for their beloved sister/s. The usual things one thinks of are: accessories, jewellery, apparel, cosmetic kits, boxes of sweets or dry fruits, and so on.

This year, why not consider a unique gift for your sister? Something unconventional.

With a promise to protect her, this year you could ensure her financial security.

Yes, it's possible.

In this article, we have listed down seven financial gifting ideas that you could consider this Raksha Bandhan. These are as follows:

  1. Start a SIP

    SIP or Systematic Investment Plan in a mutual fund scheme can prove to be an effective medium to fulfil your sister's dream of travelling to a particular destination by planning in advance. Maybe, she always wanted to establish her own enterprise. And, helping her make that dream possible will bring her the utmost joy no other materialistic gift would. So, the way you can help her build that corpus systematically is vide SIPs.

    SIP is a contemporary and effective mode of investing in mutual funds, available at just one click. It allows you to invest a certain sum of money regularly-say monthly or quarterly-instead of all in one go, allowing you to simultaneously plan for many financial goals.

    And who says you need to do something big. You can start with a monthly SIP of Rs 500 and gradually increase the amount with a Step-up SIP facility.

    Selecting the right mutual fund to SIP in is crucial. Choose one that has a proven track-record of generating consistent returns across diverse periods and market cycles. Further, ensure the fund house follows robust investment processes and systems.

  2. Purchase a medical insurance in her name

    Your sister dedicates most of her life to her biological family before marriage, and continues to selflessly shower care and love on her in-laws as well. Often, she often ignores her own health while making things possible for everyone else.

    The threat of facing a major ailment is always present, considering today's lifestyle of long working hours, stress, lack of physical exercise, skipping meals, indulging in junk food, alcohol, and/or smoking. This lifestyle is the primary reason that a critical illness cover is required today as it takes care of the rising cost of healthcare.

    So, go ahead and buy a medical insurance for your sister and ensure she is adequately insured. You can purchase and renew the health insurance online, effortlessly.

  3. Introduce her to the power of online banking

    Another way to help your sister become financially independent is by introducing her to technology. Learning how to manage her accounts through online banking will save the time she spends on visiting the bank's branch for basic service requests. With the mobile applications and E-wallets, everything is possible with just a smart phone. She would be able to pay her utility bills online as well.

  4. Opt for a SWP

    Systematic Withdrawal Plan (SWP) is another smart way to provide a regular source of income for your sister. If she is on a sabbatical, maternity leave, change in marital status, etc. and needs a regular source of income, then SWP work as a smart gift for her. You can help her invest her savings along with your financial gift contribution, invest in a particular mutual fund scheme and opt for a SWP facility.

    Under SWP, your sister will be facilitated to withdraw a fixed sum of money from a mutual fund scheme regularly (say monthly, quarterly, half-yearly and annually) and hold the potential to clock returns on the remaining investments over a period of time.

  5. Consider investing in paper gold

    Gold as an asset class illustrates the trait of being a safe haven, a saviour in times of economic volatility. This can strengthen your sister's financial security over the long-term, and it is, indeed, a deserving gift for Rakhsha Bandhan. But, as far as possible, hold back from gifting physical gold as it carries a high holding cost. Instead, consider investing in gold ETFs and/or gold saving funds on her behalf.

    Gold ETF is an instrument that represents an ownership of gold assets. Gold is held on your behalf by an appointed custodian for the ETF. When you buy a Gold ETF, you get a contract indicating your ownership in gold equivalent to the rupee amount of your investment. They are open-ended funds that track gold prices, and each unit of gold in the fund that you buy is equal to 1 gram of gold.

    Gold saving funds (also known as gold funds) are another option. Generally, the 'fund of fund' schemes invest their corpus into an underlying Gold ETF that benchmarks their performance against the physical prices of gold. By doing so, they attempt to provide returns that closely correspond to the returns of its underlying Gold ETFs. Further, you can systematically invest into a gold fund. However, the expense ratio for a gold fund may be comparatively higher than for Gold ETFs (as it includes the additional fund management cost along with the cost of Gold ETFs). In this regard, gold ETFs have a higher advantage.

    Having said that, both, gold ETFs and gold saving funds are smart as well as efficient ways to invest in gold. Hence, consider presenting your sister with these paper gold investment avenues can safeguard her financial future.

  6. Help her pay-off liabilities

    Well, this can prove to be an unforgettable gift and a huge relief for your dear sister, to whatever extent you can. Besides, help her restructure liabilities, and if you don't possess the competence, guide her to a credit counsellor or a financial guardian. Pay the professional fee and he/she can then pave a corrective course for her to follow in the interest of her long-term financial wellbeing.

  7. Open a bank account for her

    If your younger sister does not yet hold a bank account, open one in her name. The money you wish to gift can be deposited in this account and can be invested in a term deposit. This will earn interest and provide her with an additional source of income. The bank's debit card can empower her to use the money in the saving account as per her wishes. Also, introducing her to online banking will bring along ease and convenience.

These thoughtful financial gifts for you sister will not only be cherished, but add to her financial security. This can eventually lead her to financial freedom, and as a loving, caring brother isn't that what you want for your sister?

If your sister is already financially savvy, all of the above gifting ideas may be redundant. In that case, help her achieve the objective of growing her wealth by gifting her access to PersonalFN's 7 High-Performing, Time-Tested Readymade Portfolios which have a decade-long market-beating track record. Don't miss out this Special Anniversary; it comes at a massive 75% discount!

PersonalFN is a Mumbai based personal finance firm offering Financial Planning and Mutual Fund Research services.


The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Please read the detailed Terms of Use of the web site.

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