4 financial gifts you can give this Christmas

Andrew Munro 15 December 2016 NEWS

financial gifts you can give this Christmas image

The best presents are easy, inexpensive and mean something.

Christmas these days is highly commercialised, but that’s doesn’t necessarily mean it’s lost its meaning. Financial gifts are proof of this in action. They’re about as commercial as it gets, but are also meaningful, important and can make a real difference.

As an added bonus, they don’t have to burn a hole through your credit card either. When you give financial gifts you can choose exactly how much to spend and what the money will eventually go towards. If you’re at a loss, try finding a brand you know someone likes and picking up a gift card or present at a discount.

If you want to go a bit further, here are four financial gifts you can give this Christmas, and what you need to know about giving them.

Invest on someone’s behalf

If you want to play the long game you might try starting a small investment fund for each child or grandchild, and then giving them access years later when the account, and the kid, have had some time to grow up.

If you’re planning on giving investments as presents, you might consider one of these robo-adviser accounts. They’re an excellent choice for gifting because you don’t really need to worry about managing the account yourself, and can select an investment style to suit the recipient.

If you really want to nail the gift-giving this Christmas, you can personalise investment gifts. You can give higher or lower risk accounts to someone to suit their personality, or might shares in a company that you know the person likes to give something that’s both useful and meaningful.

If the lucky recipient is still young or is only just getting started learning about investments you can also help them out by signing them up for an online share trading crash course.

What to know about giving investment gifts:

  • When you give away shares as gifts, you can treat them as a capital loss, and the recipient treats it as a capital gain, for tax purposes.
  • When giving investment accounts, make sure ownership can be transferred to the recipient, or check whether you can open it in someone else’s name.

Open a savings account

As the old Christmas story goes, the Grinch’s heart only grew when faced with the tragedy of a child without a fee-free interest-earning savings account. Or something like that.

This is because these accounts are only available for a limited time, and they can deliver some very desirable terms that adults simply can’t get. For this reason, parents and grandparents are increasingly giving children’s savings accounts as Christmas presents. Depending on how old the kids are, they might not be able to fully appreciate what they have been given. As the years go by and the savings grow, however, they’ll find it hard to forget what a great present it was.

You can also open an account for babies, which might not be appreciated by them at the time, but can be an exceptional gesture for the parents.

What to know about giving kid’s bank accounts as gifts:

  • You usually don’t need to worry about tax implications unless the account is earning truly exceptional amounts of interest.
  • Check the account terms and conditions and know what to look for.

Just give some cash

At the end of the day there’s nothing wrong with giving someone cold, hard cash as a present. If the recipient is overseas this might be the ideal financial gift, as they probably won’t be able to use the bank accounts, or get full use from some of the other options.

International currency transfer services mean you can now send money overseas a lot more quickly, easily and affordably than ever before. This lets you gift money to almost anyone, no matter where in the world they are. All you’ll need to do is choose a provider and set up an account.

This gets you better exchange rates, lower transfer fees, and means you don’t have to worry about cash mysteriously being “lost” in the mail. Once you have an account, you can keep using it for birthdays, graduation presents and all the other special occasions when you want to let grandchildren or other overseas friends and family know you’re thinking of them.

What to know about transferring currency:

  • It’s typically cheaper to set a currency transfer account than to keep using your bank
  • Consider exchange rates and any other costs when sending money overseas, and find ways to keep expenses down.
  • Setting up your own currency transfer account can also be preferable when sending money within Australia.

No matter who the present is for, financial gifts like these mean you can find something for everyone without spending a cent more than you want to.

Gift cards that people actually use

Some people strictly believe that Christmas presents should be fun luxuries that people won’t buy for themselves. Others rightly point out that there’s nothing worse than getting a gift card for things you just don’t want and knowing that it could have been cash instead.

The right gift card simultaneously shows that you care, and shows how cool you are. Supermarket gift cards are a great choice because everyone can find a use for them. The Woolworths WISH cards, for example, can be used at petrol pumps, supermarkets, home improvement stores and, of course, Dan Murphy’s and other bottle shops for a little more merry in your Christmas.

  • Supermarket gift cards: Can be spent entirely recreationally, on essentials only, or both. The perfect gift when you’re not sure of someone’s financial situation.
  • Online store gift cards: More personal and no less practical than supermarket cards, you can find online gift cards to suit almost any interest. Get cards from brands like Apple, Amazon, Macy’s, Booktopia, Urban Outfitters, Kitchenware Superstore, Dan Murphy’s and many others. The perfect present when you know what someone likes, but not what they need.
  • Netflix gift cards: Netflix gift cards are now available in Australia, letting you buy a card full of pure entertainment. If you want to know for sure that the present is going to be enjoyed, an entertainment-only gift card is the way to go.
  • Electronics gift cards: When you see some of the deals you can get with electronics gift vouchers, you might be tempted to pick one up for yourself as well. If you want to go above and beyond, you can even use these to pick up new computers, headphones, vacuum cleaners, appliances and more to give as major presents without breaking the bank. For full effect, try not to say how cheaply you were able to but them.
  • Prepaid credit cards: This is the gift to give when you know cash is the perfect present, but you can’t bring yourself to hand over a wad of bills and call it a present. Simply load up a prepaid card with however much you’d like to give as a present, and the recipient can use it as desired.

What to know about giving gift cards:

  • Be aware of expiry dates
  • Remember that you’re typically paying a bit more than the actual value of the card
  • Watch out for any fees and conditions which may apply

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