This Mother's Day, what are you planning to gift her?
While a flowers bouquet, a dress or an evening out with her would surely make her happy, you can use the opportunity to gift her a financial product that will provide her long-term security. We list here some ideas that you can explore as a gift for her immediate financial security and also for old age income security.
You can start a systematic investment in mutual fund, preferably in an equity fund that generates good returns. A SIP would not just provide good returns over the long term and help build a kitty for later, but can also provide liquidity if needed mid-course.
An investment in a monthly income plan would provide regular income that could come handy. These plans are invested largely in debt and are safe. Also, their returns could be higher than fixed deposit of banks, though such high returns are not guaranteed.
You can consider gifting her a unit-linked insurance plan (ULIP) that has the benefit of providing good market-linked returns in the long term. However, there are market-related risks in Ulips and there is no guarantee of high returns.
But because of the risk, there is a potential of higher Demat. For the conservative investor, one can consider a traditional insurance plan, which also has returns inbuilt along with insurance cover. Single premium policies could be considered since that would do away with the tension associated with paying the premium on time year after year.
The government's Sovereign Gold Bond scheme is one of the options that could be much appreciated. This could be a better alternative than buying physical gold for her. SGBs offer the twin advantage of capital appreciation linked to the price of gold and also an interest income of 2.5% per annum. Since this is issued by the government, there possibility of default is zero. The instrument can also be later used as collateral for availing loans in your mother is in need of cash.
If you and your mother have high risk-taking ability, you can consider opening a Demat Account for her for equity trading and provide some initial corpus to start off. It will help her build a stock portfolio of her own. Besides giving returns that could beat inflation in the long run, it will also keep her gainfully occupied.
Note: This article is brought to you by moneycontrol