Father’s Day is just round the corner, which means you have little time to find your dad a gift he will love. There are many traditional ways to go about it but if you want to gift your father something that truly helps him in the long run, you should consider a financial gift. It is our fathers who shape our financial habits. This Father's Day, why not thank him with the best financial gift.
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Make an investment to fund his retirement
Most middle-class Indian parents do not plan for their retirement as they put everything into raising their children. However, it is never too late to introduce your parents to the habit of investing. This Father’s Day, you can start a Systematic Investment Plan (SIP) in mutual funds for him — it will create a disciplined and long-term investment strategy to help create wealth over a period for him. The stocks in most of these plans are liquid and can get your dad funds in times of need, or in case of an emergency. SIPs can also help to create wealth for your dad’s retirement.
Buy high-dividend shares for him
Shares of companies that pay a good dividend is a great way to safeguard against capital erosion. Since blue-chip companies are generally the ones that pay a higher dividend, most of these shares are safe to invest in.
You can also buy him a high-dividend-yield stock. Look for companies with a dividend yield of 5 percent and above to give him an added source of income through dividends. This way you will ensure income from possible appreciation as well as a bonus high-dividend pay-out.
Open a fixed deposit account for him
Several public and private banks have recently revised their interest rates. And if your dad is a senior citizen, he can get an additional 50 bps or 0.5 percent interest on FDs. Fixed deposits are one of the safest investment options and during retirement most elders prefer to keep their capital safe and grow it over time.
Open a Senior Citizens’ Savings Scheme account
For dads above the age of 60, you can start an investment in the safe, government-backed retirement benefits programme, the Senior Citizen’s Saving Scheme. It offers assured returns and has a tenure of five years. The current interest rate offered is 7.4 percent, which is higher than what most banks offer on FDs.
PM Vaya Vandana Yojana
Another government-backed retirement benefits programme is the Pradhan Mantri Vaya Vandana Yojana. It is designed to provide regular income to retirees and has a tenor of 10 years. It offers assured returns on the monthly option at the end of 10 years, and the principal amount accumulated is returned to the policyholder.
