Rakshan Bandhan is a symbol of the bonding between brothers and sisters. It is that time of the year when brothers renew the pledge of protecting their sisters. It is celebrated by the sister tying a symbolical ‘Rakhi’ on the brother’s wrist, who in return showers her with gifts.
So, why not give her some real security this Raksha Bandhan that may not only prove to be a financial asset in future, but also carries the potential to multiply? It may not sound as attractive as a fancy gift neatly wrapped, but, it will surely keep your sister in good stead and will also guide her to be on a smart saving/investment path.
Let us take a look at five financial gifts this Raksha Bandhan that your sister will treasure for a lifetime.
Systematic Investment Plans
Systematic Investment Plans (SIPs) have, for quite long now, been touted as safe investment options. SIPs are an investment route, which requires you to commit a fixed amount every month. You invest this fixed sum in predetermined basket of Mutual Funds or let your company do it for you.
So, if you buy your sister a SIP worth Rs. 5,000, you are initiating her in a monthly discipline/habit of investing Rs. 5,000 for an extended period of time. Of course, you have to make sure that your sister is ready for such a commitment. Although they can be redeemed anytime, it is generally better to stick to them for long periods to reap substantial gains. You can start a SIP with an amount as low as Rs. 500 a month. In short, SIPs could be a great gift this Raksha Bandhan.
Post offices Monthly Income Schemes (MIS)
Post Offices in India don’t just deliver Rakhis. They offer attractive investment options too in the form of Monthly Income Schemes (MIS), which guarantee a fixed monthly income. The maximum investment is Rs. 4.5 lakh per person and the minimum investment is Rs. 1,500.
This can be a great gift to a sister in college or school who needs regular monthly income for studies, tuitions, books, etc.
Another unique gift that you can give your sister is a Health Insurance policy in her name. This gift will be in line with your pledge of protecting her.
You can buy a Health Insurance policy with an adequate cover. This gift will take care of her during any kind of hospitalisation and will help her meet the skyrocketing medical expenses.
Equity Linked Savings Scheme (ELSS)
Equity Linked Savings Scheme or ELSS can be a fantastic gift too. The scheme would create a saving that your sister will treasure forever. It is a diversified Mutual Fund that invests most part of your corpus in equity market. It has a lock in period of three years and requires a minimum investment of Rs. 500. An interesting aspect of this scheme is that these investments save you tax under Section 80C of Income Tax Act, and at the same time it has a potential of providing handsome returns.
Low Cost ULIPS
Another splendid gift option for your loved one can be low cost Unit-linked Insurance Plan. This plan serves the twin purpose of being an investment as well as an insurance instrument. With significant reduction in premium allocation charges post 2010, you get good value for money. Also, since your money is invested in a judicious mix of units pertaining to Equity and Bond, you can afford to invest and forget it for a while .
There are several other financial investments that can double up as Rakhi gifts for your sister; all you need is a little understanding of the financial products available in the market.