Three Tips for Giving Investments as Gifts
Sign up for our FREE Monthly Email Newsletter
In addition to keeping in the financial know, you may be interested in checking your credit score and report.
¹The credit scores provided under the offers described here use the Equifax Credit Score, which is a proprietary credit model developed by Equifax. The Equifax Credit Score and 3-Bureau scores are each based on the Equifax Credit Score model, but calculated using the information in your Equifax, Experian and TransUnion credit files. The Equifax Credit Score is intended for your own educational use. It is also commercially available to third parties along with numerous other credit scores and models in the marketplace. Please keep in mind third parties are likely to use a different score when evaluating your creditworthiness. Also, third parties will take into consideration items other than your credit score or information found in your credit file, such as your income.
²The Automatic Fraud Alert feature is made available to consumers by Equifax Information Services LLC and fulfilled on its behalf by Equifax Consumer Services LLC.
³Equifax Credit Report Control™ is only available while you have a current subscription to Equifax Complete Premier. Locking your credit file with Equifax Credit Report Control will prevent access to your Equifax credit file by certain third parties, such as credit grantors or other companies and agencies. Credit Report Control will not prevent access to your credit file at any other credit reporting agency, and will not prevent access to your Equifax credit file by companies like Equifax Personal Solutions which provide you with access to your credit report or credit score or monitor your credit file; Federal, state and local government agencies; companies reviewing your application for employment; companies that have a current account or relationship with you, and collection agencies acting on behalf of those whom you owe; for fraud detection and prevention purposes; and companies that wish to make pre-approved offers of credit or insurance to you. To opt out of such pre-approved offers, visit www.optoutprescreen.com/.
4We will require you to provide your payment information when you sign up and we will immediately charge your card $4.95. After that, we will charge the card $19.95 for each month you continue your subscription. You may cancel at any time; however, we do not provide partial month refunds.
Equifax® is a registered trademark and Equifax Complete™ Premier is a trademark of Equifax, Inc. © 2014, Equifax Inc., Atlanta, Georgia. All rights reserved.
Thoughts of gift-giving often run to gadgets, homemade items, food, books, and gift cards. While these ideas are great and can be thoughtful and unique, they are consumable to some degree. Another option is to give something that has the potential to really keep giving: investments.
When you prepare to give investments as gifts, here are some things to keep in mind:
1. Make it tangible. If you are giving an investment for a child, find a way to make it tangible. It’s a little more fun if there is an item to unwrap and hold. Consider buying stock in something that the recipient really likes, such as a video game company or a company that makes the child’s favorite snack. Then, find out if you can get a framed stock certificate. Many companies and brokers offer this service for gift-giving purposes.
You may also want to consider getting the recipient a bond that can be redeemed later. These are considered a little safer than stocks, especially if you get a Treasury security. Think about bonds that adjust for inflation for an even better gift. Although you can no longer get paper bonds issued from TreasuryDirect.gov, you can still get a certificate for gift purposes.
2. Consider a fund. Another option is to invest in a fund. Even if the recipient never adds to it, there is still the potential for growth. It’s often possible to start small, so you don’t need a large amount of money to make this gift. Choose a low-cost index fund or ETF (exchange-traded fund) so the fees seen with managed mutual funds don’t eat up the returns.
You can also find out if the minor recipient has a 529 plan or a Roth IRA. If he or she does, make a contribution to that account. Many brokerages make it fairly easy to contribute these accounts.
3. Talk with parents about custodial accounts. If you want to give the gift of investment to a minor who isn’t your own child, and you aren’t just giving a stock or bond or adding to a 529 plan, you will need to check with that child’s parents in order to coordinate the account.
It’s fairly easy to open a custodial account with most brokerages, and the money in this type of account is considered the child’s; he or she gains control upon reaching the age of majority. However, these accounts normally have to be managed by the parent or legal guardian, so you will need to coordinate your gift.
The gift that continues to give
Giving an investment can be a great way to provide a gift that continues to give. You can help the recipient build a stronger financial foundation, and you can also help him or her learn the importance of investing in building wealth.
Carefully consider the possibilities. Thanks to the Internet, discount brokerages, and other companies and options, it is possible to help a recipient get started with any amount.
Miranda Marquit is a freelance writer and professional blogger specializing in personal finance, family finance and business topics. She writes for several online and offline publications. Miranda is the co-author of Community 101: How to Grow an Online Community, and the writer behind PlantingMoneySeeds.com.
Equifax maintains this interactive forum for education and information purposes in order to allow individuals to share their relevant knowledge and opinions with other members and visitors. We encourage you to participate in discussions about personal finance issues and other topics of interest to this community, but please read our commenting guidelines first. Equifax reserves the right to monitor postings to the forum and comments will be published at our discretion. Do you have questions or comments about your Equifax credit report or customer-service issues regarding an Equifax product? If so, please contact Equifax directly. All opinions and information expressed or shared in blog comments are solely those of the person submitting the comments, and don't necessarily represent the views of Equifax or its management.