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4 Financial Gifting Ideas to Ensure Your Parents’ Financial Well-Being


While traditional gifts to our parents hold sentimental value and express gratitude for their past contributions, we have the opportunity to go beyond and provide them with the gift of financial independence and well-being. By carefully selecting thoughtful financial gifts, we can help secure their future and ensure their long-term stability.

Reputable financial institutions offer valuable options for purchasing financial gifts that can have enduring benefits. Consider Shriram Fixed Deposit as one such gift, which has the potential to yield rewards for years to come. By investing today, you can make a significant contribution to your parents' financial success in the future.

Here are four financial gifting ideas that you can consider for your parents:

1. Fixed Deposits

Unlike savings or current accounts where depositors are allowed to withdraw their money at any point, fixed deposit accounts have a sum of money locked during the deposit period.

Banks and financial institutions typically allow depositors to lock in their investments for periods that can be as low as 7 days or as high as 10 years. The rate of interest varies depending on the duration of the investment. Some banks may allow premature withdrawal options but at lower interest rates.

If your parents are senior citizens, they can avail of even higher interest rates. Fixed deposits can also serve as collateral for availing a loan at comparatively lower interest rate. Fixed deposits can also offer tax benefits under the current tax regime. If you want to withdraw a fixed deposit prematurely, you will need to pay a penalty to the bank or financial institution, which will be deducted from your interest. Unlike young investors, our parents are more likely to look for safer investment options that guarantee a stable return on investments.

Here are the three important advantages that fixed deposits offer:

Low Risk

Fixed deposits are renowned as low-risk financial instruments that provide a dependable source of stable income. They guarantee fixed returns upon maturity. Regardless of any subsequent decline in interest rates, the interest you earn will be based on the date you opened the account, ensuring consistent returns.

Ideal for Senior Citizens

If one or both of your parents are senior citizens, you can opt for a sole or joint account and get higher interest rates. Unlike mutual funds or stocks, fixed deposits offer stable returns. The best part about investing in a fixed deposit for senior citizens is that they can earn an additional interest benefit of 0.50%*p.a. in financial institutions like Shriram Finance.

Ease of Use

A fixed deposit can be opened online within minutes. There is very little paperwork involved and modern banks and financial service providers have mobile apps that can be used to manage an FD account. You can also take a credit card against a fixed deposit, which can allow your parents to make purchases and pay later. If you are getting an FD and a credit card against it, make sure that you properly educate your parents about the importance of repaying EMIs on time to avoid unnecessary interest.

Also read:3 Risk-free Tax-saving Investment Plans for Senior Citizens

2. Gold

Gold has always been looked up to as a safe asset that previous generations have invested in. It has stood the test of time and has shielded people against inflation and poor market conditions. Instead of gold bars or other gold products, there are modern ways to gift gold. You can do so through:

Sovereign Gold Bonds: They are issued by the government and can be purchased in denominations of 1 gram of gold. The tenure of these funds can go up to 8 years, with an exit option past the 5-year mark. They can also be traded in the exchange after 5 years.

Gold Exchange-Traded Funds: Gold ETFs are similar to traditional mutual funds and are typically cheaper than traditional gold investments. These financial instruments are based on gold prices and are sold in units representing 1 gram of gold, with some service providers offering smaller units of 0.5 grams. The gold is held on behalf of the investors by a custodian of the ETF and it can be purchased on the stock exchanges via a Demat or trading account.

Gold Savings Funds: They invest in an underlying gold ETF and benchmark the performance of ETFs against the physical price of gold. The returns are usually similar to Gold ETFs while also offering a lower cost of entry and lower associated risks.

The reason why you should invest in gold-based financial instruments over traditional gold purchases are:

  • No compromise or question on the quality of gold.
  • Cost of holding gold through financial instruments is low compared to gold purchases.
  • Risk-free experience with no storage or theft concerns.

3. Health Insurance

Health insurance is an essential asset that may not directly increase your wealth, but it plays a crucial role in safeguarding it. Regardless of age, it is imperative to have health insurance in place. If your parents lack access to health insurance, it becomes a top priority to secure an insurance plan for them promptly, providing protection against unforeseen medical emergencies.

Some medical emergencies can be very expensive and may force you to liquidate assets if you do not have cash in hand. Here are some reasons you should consider health insurance as a financial gift for your parents:

Quality Healthcare

The best insurance plans can get your parents a complete health check-up and full medical coverage in case of medical emergencies. Insurance providers are typically partnered with some of the best healthcare providers in the country. They can also offer cashless treatment in some cases.

Beat Inflation

Medical treatments and hospitalisation are getting more expensive over time and it can be difficult to keep up with the costs. Health insurance ensures that your parents receive timely and necessary medical treatment, guaranteeing their access to the healthcare they require.

Save Taxes

The premiums paid towards your parents' insurance plan can save them taxes under government provisions. Insurance not only helps you get sizeable medical coverage for a fraction of the cost, but they also help save a large portion of your annual income taxes.

An option you have when seeking medical insurance is a 'family floater plan'. It is an all-in-one medical insurance package that covers all of your family members under one insurance plan. That way, all family members will be protected under one plan and the total sum insured will be far bigger than an individual plan, which can be beneficial in case someone in your family needs expensive medical treatment.

Medical insurance requires a high level of research and you should spend time going through all the terms and conditions before picking a plan. It is important to have sufficient coverage for both treatment and post-treatment expenses. Ideally, the older your parents are, the higher the insurance coverage you should get. If you are getting a family floater plan, make sure that your insurance coverage takes care of any unforeseen medical expenses that your family might face.

4. Mutual Funds

Mutual funds are investment vehicles that allow individuals to invest their preferred amount in a diverse range of financial securities, such as stocks, bonds, and other assets. These funds often involve pooling a significant investment from multiple investors, each representing a portion of the overall holdings. A dedicated fund manager, appointed by the financial institution, oversees the investment and manages it in line with the specific objectives of the mutual fund scheme.

Here are the biggest reasons why you should invest in mutual funds for your parents:

Diversification of Risk

One of the biggest mistakes you can make is to put all investments in one place. Mutual funds typically diversify risk by investing systematically in different areas of a sector, or multiple sectors. Fund managers are well equipped to monitor the market conditions and make the best decisions possible under the given circumstances to boost investor returns.

Removes Need for Expertise

A mutual fund removes the need for expertise in various market sectors and trading. These financial instruments are managed by professionals who have the experience and expertise needed to keep your investment safe. Banks and other financial institutions typically have large teams of researchers who constantly monitor your funds to ensure you get the most returns possible. While there is still an element of risk involved, mutual funds can yield better returns than safer investment options like gold or fixed deposits.

Low Transaction Costs

Investors can save a lot of transaction costs due to the scale at which mutual funds operate. Since fund managers buy and sell securities in large volumes, it allows them to reduce the cost of transactions significantly. The savings also reflect on investors as they spend significantly less on mutual funds compared to trading through stock brokers.

To Sum Up In conclusion, by embracing the power of financial gifting, we can ensure our parents' financial well-being and provide them with a lasting sense of security. Whether it's through thoughtful investments like Shriram Fixed Deposit, the gift of health insurance, or exploring the potential of mutual funds, these four financial gifting ideas offer a timeless and classy approach to securing our parents' financial future. By taking proactive steps today, we can express our gratitude and love in a tangible way, empowering our parents to enjoy a life of financial independence and tranquillity.


1. Is income from financial gifts taxable?

Yes, income from financial gifts is taxable but they can also offer tax benefits in some cases.

2. Is health insurance necessary only for older citizens?

Health insurance is necessary for people of all ages as medical emergencies can occur to anyone.

3. Which gift should I choose for my parents?

Choosing the right gift for your parents depends on individual financial needs, goals, and preferences. However, here are a few gift ideas that can contribute to your parents’ financial well-being: Shriram FD, Health Insurance, Mutual Funds and Gold ETFs

4. Should I choose SGBs, gold ETFs or gold savings funds?

All three are good options. You should do your research and seek professional assistance before going ahead with one of the three options.

Key Highlights

  • Gold and fixed deposits are reliable investments that can yield stable returns.
  • Health insurance and other financial gifts can offer long-term value to your parents.
  • Mutual funds are subject to market risks and you should do your research before purchasing a fund for your parents.
  • Parents deserve financial security and you can help stabilise their future with a financial gift today that can benefit them for years to come.
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