This holiday season consider skipping the gift cards, or one or two gifts, in favor of a gift that keeps giving. Give stocks, bonds and index funds as gifts; it is easier to do than you might think, and at an annual rate of return of 6%, a gift of $100 would more than quadruple in 25 years.
(An additional bonus: these gifts are perfect for last-minute shoppers and can be purchased electronically.)
Here are three different ways to consider giving investments as gifts:
Contribute to a 529 plan
Most 529 plans accept third-party contributions. The Ugift® program is a service that allows you to contribute to a 529 plan, using a unique code. The code is provided by the 529 plan account holder, so you would need to contact them about getting the code. Learn more at https://www.ugift529.com/content/home.html and https://www.ugift529.com/content/faqs.html.
Give the gift of stocks and index funds
Technology has made investing more accessible and easier to manage. In addition, there are now sites that allow you to buy investments for the sole purpose of giving them as gifts. You can buy as little as one share of a stock or index fund. Two popular sites are https://www.sparkgift.com/ and http://www.giveashare.com/.
Gift a savings bond
Savings bonds are treasury bonds from the U.S. government. They are discount bonds, meaning they do not pay interest; instead they are purchased at a discount and redeemed for the face value. To illustrate, a bond with a face value of $25 may be purchased for $24 and redeemed for $25 on the redemption date. You can buy savings bonds as gifts directly from the treasury website: https://www.treasurydirect.gov/indiv/planning/plan_gifts.htm.
Conclusion
Stocks, bonds or index funds are perfect gifts for any occasion. As with all investments, ensure you have done your research. The websites above are provided as resources only, there may be other sites that are better suited to meet your needs.
Happy Holidays!