Providing a thoughtful monetary gift can be a meaningful way to celebrate the special bond between siblings.
Consider giving your sister a term deposit, setting up a Systematic Investment Plan (SIP) in mutual funds, signing her up for a financial planning workshop, or scheduling a meeting with a financial adviser to create a customized investment strategy.
Instead of simply gifting cash to your sister this Raksha Bandhan, consider a different approach this year. How about empowering her with financial independence? A thoughtful financial gift can be a meaningful way to honor the special bond between siblings. Whether it involves investing in her future or contributing to her financial goals, a financial gift is a modern way to not only give a present but also something that can have a lasting impact.
Setting up a bank account and making a deposit
For instance, if you have a younger sister who doesn't have a bank account yet, it's a good idea to take her to the bank.
Opening a bank account is the initial step to introduce her to financial services and products. The money you intend to gift can be deposited into this savings account and then invested in a fixed deposit, which offers a secure investment option with a fixed return and a sense of financial stability. This will generate interest income for her future endeavors.
"Encourage your sister to consider investing in fixed deposit schemes, especially government-backed ones or those designed for women like the Mahila Samman Savings Certificate, 2023, which provides a 7.5 percent interest rate compounded quarterly. The minimum investment amount is Rs 1,000, and the tenure is two years.
Consider gifting an SIP
If you are looking to plan for the long term and help in building her wealth, consider initiating a mutual fund systematic investment plan (SIP) for her. You can begin with a lump sum investment and then set up the SIP on her behalf.
An approach to this could be to start and maintain the SIP under your name with your sister as the nominee. You can start with as little as Rs 500 per month. Share the folio account number and product details with her. Over time, the SIP can develop into a significant financial asset for your loved one.
For example, by investing just Rs 500 per month for her for 10 years starting today, assuming a 12 percent rate of return, you would have invested Rs 60,000. As per the SIP calculator, you would have earned around Rs 1.16 lakh in returns. This sum could support her future educational or career aspirations.
Empower your sister with financial knowledge
Support your sister's education or skill development by equipping her with financial literacy. Encourage her to explore resources on financial planning, investor behavior, and investment products through books, e-books, audibles, or learning subscriptions. This will help her become financially literate and self-assured.
"Consider enrolling your sister in a program or workshop to enhance her financial understanding and familiarize her with different financial instruments and their calculations," advises Vikas Singhania, CEO of TradeSmart, an online stock trading platform. Be cautious of financial influencers or social media personalities who may offer stock market courses with dubious intentions or promise high returns through their services.
Secure adequate insurance coverage
A comprehensive health insurance policy is essential to prioritize your sister's well-being. In the face of escalating medical expenses, such a policy ensures access to quality healthcare without straining her finances.
This holistic approach shields her from medical emergencies through early acquisition of health insurance coverage. Singhania emphasizes that providing a health insurance plan is one of the most significant ways a brother can protect his sister. It will grant her the stability to navigate financial challenges arising from health issues effectively.
Create a customized financial strategy
Support your sister in establishing an emergency fund to safeguard her financial well-being. Additionally, offer assistance in developing a tailored financial plan or investment approach. Take into account her financial objectives and schedule a meeting with a financial advisor to outline these objectives. This will not only enable her to reach financial stability but also nurture emotional bonds and a sense of assurance in life. "Furthermore, you can regularly supervise her financial strategy and provide guidance if adjustments are necessary."
Connect with gold investments
If you are considering purchasing gold, we recommend opting for a gold mutual fund, an Exchange-Traded Fund, or a sovereign gold bond (SGB) from the available options. While jewelry holds significant aesthetic appeal and may be appreciated as a gift by your sister, if she prefers using or wearing gold, then physical gold options may be more suitable. On the other hand, if she views gold primarily as an investment, presenting gold ETFs or SGB could be a wise choice.
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