Looking to give something a little different this holiday season? Maybe you’re interested in teaching some lessons about financial literacy or helping to fund someone’s future. Instead of putting another box under the tree, try standing out from the crowd by giving a great gift from your local credit union.
Here’s a look at a few different financial-themed gift ideas you might consider.
Opening a savings account for a child
If you’re interested in teaching children about the value of saving and the power of interest, why not open an account on their behalf and give them a small balance to get started? A child who has carefully stashed coins and notes inside a piggy bank for several years can start to see how adults handle their money, and enjoy the benefits of earning a little bit of interest each month.
If you’re opening an account for a child, look for a low-fee or no-fee account that doesn’t require a minimum monthly balance. You or a guardian may have to sign as co-owner of the account until the child is old enough.
Opening an RESP, or making a contribution
Looking to set up a little scholar for higher education? Get them started on the path to post-secondary success by opening a Registered Education Savings Plan, or RESP. If the child already has a plan, consider making a contribution to their existing account.
One of the best things about RESP contributions is the added bonus provided by the Canada Education Savings Grant, or CESG. The basic grant pays an extra 20 percent on top of any RESP contribution, up to an annual maximum of $500 and a lifetime limit of $7,200. If an RESP account has unused grant room left over from previous years, it’s eligible for an annual CESG maximum of $1,000, a great way to make your gift go further.
A term deposit
Preach the power of interest and the value of patience by investing money in a term deposit for your favourite saver. As we explained in a previous blog, most term deposits require the funds to be off limits for months or years. Once the term is up, the original investment is returned along with the interest it earned. Term deposits tend to pay higher interest than most savings accounts, making them a solid choice for youngsters with plenty of time to save and earn.
Stocks and equities
Lay a foundational building block for a lifetime of financial savvy by giving a budding investor a stake in the stock market. Personalize the gift by purchasing stock in a company that the recipient will recognize and admire, such as a video game manufacturer or cell phone producer. Throughout the year, you can check on the stock’s performance together, and teach valuable lessons about investing.
If you’d prefer not to purchase an individual stock, or find it too pricey, two good alternatives are mutual funds or index funds. These are more likely to deliver regular growth without periods of volatility.
A visit to the local credit union
There’s nothing like a field trip for mixing fun with valuable lessons about the practical realities of life. Add impact to your financial gift by scheduling some extra time afterward to accompany your recipient to the local credit union for a meeting with a financial planner. It could be an eye-opening and life-altering educational experience, an important first step to making financial goals and dreams a reality.