How to gift money to your children ?
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How to gift money to your children ?

  • Highlights

  • Open a trust fund in your children’s name

  • High, risk-free returns with fixed deposits

  • Reduce financial burden by paying off debts

  • Being mindful of tax implications while gifting money

Sometimes, this involves financial help too. However, aiding your children financially can be quite tricky. When gifting money to your kids, these are some considerations you should keep in mind always tread an extra mile, so their children can enjoy the best of everything.

- Teach your kids the right way to handle money
- Ensure that your child doesn’t lose out on benefits
- Tax implications
For increasing benefits for your kids when gifting them money, check out some of the following ways:

Set up a trust fund

Depositing money in a trust fund is like giving it to a trustee, for safe-keeping.

This transfer of money is irrevocable, which means you cannot claim your money back. Your children will get the money, when the fund matures. Trust fund is a good option, when you want to gift your children money when they reach a certain age.

Start an FD in their name

An FD is a great way to invest money for your children’s future. With Bajaj Finance Fixed Deposit, for example, there’s no risk involved and you can earn high interests, with additional benefits for senior citizens too. These gains are assured, since an FD is not affected by market fluctuations. You can invest as little as Rs. 25,000 in the FD for a tenor ranging from 12 to 60 months, and then re-invest the sum.
If you want to know the exact benefit that your child will accrue, use the fixed deposit calculator to view the maturity amount. A fixed deposit also has a simple online application and easy online access for added convenience.

Pay their debts

A great way to gift money to your children is to help them clear their debts. There is no risk involved in offering such financial aid to your children, as you know where the money is going. So, for instance, if your child has a student loan or a personal loan, you can help pay off a part of the loan or the entire amount. In the long run, this will help them improve their financial situation.

5 reasons to Invest in SIP

How to simplify your finances with an FD Calculator

When investing in fixed deposits, you can expect fixed returns. If you’re looking for determining the maturity amount of your investments, you can save time and plan your finances in advance.
Are you perplexed about how to use an FD calculator? Well, it is very easy. Here’s a brief lowdown on some simple tips to use the Bajaj Finance Calculator:

Using the Bajaj Finance Calculator is very simple, and it can help you in different ways. Here’s a look at the different benefits of using an FD calculator.

The Bajaj Finance Calculator can be helpful for managing your finances, so you can plan your liquidity needs in advance. It can also help you strategize your savings plan to maximize your savings.

Save taxes when gifting your children money

All gifts received in cheque, cash, shares or valuables with a value of up to Rs. 50,000 are free from taxation. If the value exceeds this limit, then the recipient of the gift will have to pay the tax. As per the Indian tax laws, if a gift is from a relative, the tax is waived off. But, it is advisable to get a gift deed made, so that your children can enjoy the tax benefit.

Similarly, investing in a trust fund can also help you save tax. It is possible that the trust will generate an income from the sum that you have deposited. The tax on this income will have to be paid by the trust itself, and not the investor, which in this case is you. This is known as diversion of income by overriding title and can help reduce your tax liability.
So, while your financial gift will help lessen the burden on your children, it is advisable to understand the tax implications first. It’s also prudent to preserve relevant documentation like receipts and bank statements, so that you have proof of the transactions, if they are needed in the future.

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