5 investment options to consider for your mom this Mother's Day

Mother’s Day is a time to express your gratitude for everything she's done for you. While flowers and lavish meals are always thoughtful ideas, a novel gift idea for your mother would be to help her choose how to invest her money wisely. 

Explore some of the most effective investment options to give her short-term and long-term financial security. For example, a monthly interest-paying fixed deposit can help with her monthly expenses, whereas a long-term SIP in an equity mutual fund can create wealth for her in the long run. 

Read on for some of the best investment gifts that will help your mother achieve financial independence.

1. Health insurance

As your mother's age increases, so does her vulnerability to illnesses; correspondingly, so does the cost of her health. In these times, having a comprehensive health insurance policy that covers OPD expenses, hospitalisation, critical illnesses, etc., is vital.

Several health insurance policies provide preventive health check-ups at specified intervals (annually, once every two years, etc.). This check-up is helpful for detecting life-threatening diseases in their initial stages, making it one of the best investment options for your mother's overall well-being. The cover amount must be adequate to keep pace with medical inflation. 

2. Life insurance

The best investment option after health insurance is life insurance. In her absence, it provides financial security for the family. There are a variety of types of life insurance policies, including endowment, whole life, money-back, and more. When it comes to high coverage at low premiums, term plans are among the best investment options.

3. Gold

A timeless investment choice, gold is a popular investment option among all age groups in India. There are many ways to buy gold for your mother, including:

• Jewellery/ornaments

One of the oldest and most popular choices.

• Bullion

If you want to invest in physical gold other than jewellery, coins/biscuits are among the best investment options to consider

• Gold exchange-traded funds (ETFs)

Investing in physical gold involves storage costs, insurance, etc. However, you need not worry about these costs when investing in a digital/electronic format. During market trading hours, you can buy gold ETF units from the stock exchanges (BSE, NSE).

• Gold mutual funds

If you want to invest a specified amount in gold with a specified frequency (monthly) for a specified period, you can start an SIP in a gold mutual fund.

• Sovereign gold bonds (SGBs)

The RBI issues SGB units on behalf of the government. If you apply online, you get a discount. SGBs pay 2.5% interest p.a. and are exempt from long-term capital gains (LTCG) tax when redeemed on maturity. They are also one of the best investment options when considering low-risk products.

While gold is one of the best investment gifts, check with your mother to see what works best for her.

4. Fixed deposits

To truly ensure your mother's financial independence, you must look at financial products that provide good returns and are safe and easy to liquidate when required. Among the best investment options within this category are fixed deposits (FDs).

You can invest in an IDFC FIRST Bank Fixed Deposit and earn up to 8.00% interest p.a. If your mother is a senior citizen, she will get an additional 0.5% interest. Also, there is no penalty for early withdrawal for senior citizens. Deposits of up to Rs 5 lakh per customer per bank are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC), an RBI subsidiary.

5. Mutual funds

In a high inflation scenario and after taxation, the returns of FDs can be low or negative. Consider investing in an equity mutual fund as an SIP for such a situation. It has the potential to provide higher returns in the long run. The best investment option for her is mutual funds if you want to build wealth for her in the long run.

IDFC FIRST Bank provides you with a wide variety of Mutual Funds based on your risk potential. Choose from the best investment options that include equity, debt, hybrid, index, and international funds.

Conclusion

As we have discussed, your mother has several good investment options when it comes to financial products. You should, however, build her an investment portfolio over time that includes investments from multiple asset classes, such as equity funds, fixed-income bonds, gold, etc. When you create this, you should review it as part of your regular portfolio management exercise and make any necessary changes as needed. 

This Mother's Day, present your mother with an investment portfolio that will keep on giving and ensure her financial independence.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.