Raksha Bandhan: Financial Gifts For Your Sister – Axis Direct
Aug 24, 2018 | Source: www.rediff.com
5 Financial Gifts You Can Give Your Sister This Raksha Bandhan
The Indian festive season kicked off on Monday with Raksha Bandhan. This festival signifies love, affection and bonding between brothers and sisters.
On this day brothers take a pledge to protect and take care of their sisters under all circumstances. Brothers usually give cash or other gifts to their sisters on Raksha Bandhan.
But think differently this time. And think of ways to protect your sister’s financial future by gifting a financial instrument. Here are a few options you can consider.
Systematic investment plan/blue-chip stocks
The first option you can consider is an SIP or systematic investment plan of a mutual fund. The domestic equity market is at an all-time high and there are expectations that it can grow manifold in coming years. Data shows that number of mutual funds have given better return than traditional form of investments and other saving instruments including gold over the past few years.
Small cap and midcap equity funds have delivered 29 per cent and 24 per cent annualized returns, respectively, over the past five years. Large cap equity funds have given an annualized return of 16 per cent during the same period.
An SIP is a specific amount, invested for a continuous period at regular intervals, generally on a monthly basis. Using this method, an investor buys units of a scheme at a pre-decided frequency. SIPs, which help investors take part in the stock market, obviate the need to time the market, and also bring a discipline to investment methodology.
Health insurance plan
Considering the today’s lifestyle and rising health issues, you can also pay premium for a health insurance policy on your sister’s behalf to protect her from uncertainties. There are several websites which can help you to purchase these policies within few minutes. However, you will not get tax benefit against the health insurance policy you gift to your sister.
Gold is another option to gift to your sibling on this day. The yellow metal will protect her from any economic crisis and will act as hedge during volatile times. It is advisable to gift gold ETF or gold mutual fund as physical gold carries risk of storage and holding cost. Gold ETFs are passive investment instruments that are based on price movements and investments in physical gold.
Bank fixed deposits
Lastly, on the conservative side you can also give fixed deposit to your sister to avoid market risk. With low risk, this asset class comes with less rate of interest. Short-term debt funds and fixed maturity plans can also be considered.