Instead of giving the same gifts as usual this Christmas, consider giving a gift that will last beyond the holiday season. Choose financial gifts that have the ability to increase in value over time. Listed below are some examples of gifts that you can give that will last well beyond the holiday season.
You can give a savings bond as a gift to a younger family member. Savings bonds make an excellent gift because they will continue to increase in value over time. Also, they are income tax free until redemption or maturity. Savings bonds can be purchased in paper form or electronic form from the United States government website TreasuryDirect. The bonds can be purchased in the children’s names. The treasury direct website also enables you to open an account in your own name and buy bonds for the children as gifts. Savings bonds are available in 25 dollar denominations and accrue interest monthly.
Gift of Stock
Another great gift to give this Christmas is the gift of stock. You can buy a young person one share of stock in a company that they love. For example if your child loves Mickey Mouse, one share of Disney stock would be a great gift. For the child that loves computers, one share of Apple computer stock would suffice. Websites such as Oneshare and Giveashare are a great way to purchase stock for young people. These sites allow you to purchase a framed stock certificate with an engraved plague. A gift of stock can also help them become familiar with investing concepts at an early age. Each stock certificate comes with an owner’s manual that explains exactly what it means to own stock in a publicly traded company.
529 Plan
This Christmas you can give the gift of an education by establishing a 529 plan for grandkids or nieces and nephews. A 529 plan is an educational savings plan that is designed to help families set aside money for college tuition. This qualified tuition plan can provide special tax advantages such as state income tax deduction and tax deferred growth. This plan allows you to name yourself as the account holder and the child as the account beneficiary. This allows the account holder to ensure that the money will be used for the educational costs of the beneficiary. Websites such as College Savings MD and Saving For College offer a wealth of information about 529 plans and all of the options that are available to you.
Certificate of Deposit
A custodial certificate of deposit is a good gift to teach your child the benefits of saving money.
All funds in a custodial certificate of deposit are managed for the benefit of the minor. Custodial account certificates of deposit typically require much lower minimum balances than traditional certificates of deposit. Most major banks will allow you establish a custodial account with your child. Some banks even offer add on certificates of deposit which allow the account holder to make additional contributions to the certificate over the term of investment. Other financial gifts that may be of interest are gold and silver coins for the individual that enjoys collecting coins.
Photo by sociotard
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