Invest in your mother's future: 5 of the best financial gifts for Mother's Day

Many people wonder what to give their mothers as gifts on Mother's Day. Typical traditional gifts include taking the family out to dinner, dresses, personal accessories, flowers, chocolates, etc. Do something different this Mother's Day. Give your mom a monetary gift that increases in value over time and can help her in times of need. In this article, we will discuss some of the best financial gifts for mothers.

Financial gifts can help improve a mother's financial well-being in the long run. These gifts will not only provide financial security but also empower mothers. The type of financial gift you give depends on whether your mom invests regularly or is just starting her financial journey.

Some of the best monetary gifts you can give your mom this Mother's Day include:

savings account

Does your mother save cash from her monthly budget? If yes, you can open a savings account for her. She can deposit her monthly savings in that account. Savings accounts come with many features such as anytime deposits and withdrawals, quarterly/monthly interest on maintenance balances, debit cards for ATM withdrawals, swipes at participating merchants, and online transactions. Banks usually pay interest. In the range of 2% to 7%, depending on the balance being maintained.

In addition to banks, you can also open a savings account at a post office. The interest rate paid is 4% per annum and the minimum amount to open an account is Rs. 500.

fixed deposit

In the previous section, we explained how mothers can open a savings account where they can deposit their monthly savings. If your mother has already saved up a large amount of cash or a savings account balance, you can open a term deposit for her.

As of May 2024, fixed deposit interest rates are at multi-year highs. Most banks offer interest rates in the range of 7-8% per annum. Some small finance banks offer interest rates in the range of 8-9% per annum. There are good interest rates that are higher than the inflation rate. If your mother is a senior citizen, you can receive an additional benefit of 0.25% to 1%.

If your mother is a senior citizen, you can consider opening an account for her under the Senior Citizens Savings Scheme (SCSS). Her contract term is 5 years, and the current interest rate paid is 8.2% per annum. At maturity, the account can be extended for an additional three years. Interest rates are announced each quarter before the start of that quarter. For example, the interest rate applicable for the quarter from April 1, 2024 to her June 30, 2024 is 8.2% per annum.

SCSS pays interest quarterly. Therefore, it can create a stable source of income for the mother.

Gold Investment Trust SIP

If a mother likes to accumulate money regularly through savings, she can start a systematic investment plan (SIP) with gold mutual funds. Monthly Her SIP allows you to donate a specified amount on a specified day of each month for a specified period of time. She will benefit from the rise in gold prices during her investment period.

Gold mutual funds take care of purity, storage, insurance, etc. at no additional cost to investors. She can redeem her gold mutual fund units whenever she wants to buy physical gold. With the proceeds from the redemption, she can buy her favorite gold jewelry.

Saving up retirement funds

Retirement funds provide financial freedom during your golden years. A mother can start her SIP and build a retirement fund. If the investment period exceeds her 7 years, you can choose equity funds for investment. You can explore funds with a variety of market capitalizations, including large-cap and mid-cap funds.

If your investment horizon is 5-7 years, you can consider hybrid funds. If your investment horizon is less than five years, you can also consider debt funds. Having a retirement fund in place for her retirement could give her the peace of mind she craves.

In the long run, stock investments can benefit from the power of compound interest and create wealth for mothers. After retirement, you can invest your corpus in fixed income instruments to generate a regular income stream on a monthly/quarterly basis.

financial literacy

In addition to the financial gifts listed above, you can also add the gift of financial literacy to your mother. Financial literacy can help mothers manage their own investments. There are many websites, TV channels, magazines, books, etc. that talk about financial literacy. One of the books she can consider gifting to her mother is “What Indians Should Know Before Investing'' by Vinod Potile. This book provides detailed information on all the major investment options available in India in simple language that all investors can understand.

Before investing in any financial product for your mother, sit down with her and explain the features and benefits. Investing is not a one-time process. If you need to make monthly contributions, walk her through the process so she can take over after her initial investment. Show her how to track her progress from time to time.

For example, if you are starting a SIP, walk the mother through the process such as performing the initial setup, tracking regular monthly investments, checking the performance of the scheme every 6-12 months, and how to redeem. In the case of her stock fund, she advises her to keep investing for the long term so that she can reap its benefits in the future. Investing like her monthly SIP inculcates the discipline of regular investing over a long period of time.

This Mother's Day, give her the gift of financial empowerment. You may also give your mother various gifts every year. However, this year, gift her something that will give her financial security and the strength to build a brighter tomorrow. You can express her love and appreciation for your mom with a monetary gift. At the same time, you can help accelerate her path to financial freedom with financial gifts.Gopal Gidwani is a freelance personal finance content writer with over 15 years of experience. You can contact him at: LinkedIn.