Holiday Gifts That Keep on Giving: Investment Ideas for Your Loved Ones

Gift-giving during the holidays often leans toward the latest gadgets, trendy apparel, or other items that, while exciting at first, may not stand the test of time. What if, this year, your gifts could offer long-term value, grow with time, and contribute to the financial security of your loved ones?

Investments as holiday gifts can do just that. They’re thoughtful and practical and provide a foundation for future wealth.

Here are some investment ideas that continue giving beyond the holiday season.

Gift an Exchange-Traded Fund (ETF)

An exchange-traded fund (ETF) may be the perfect gift if you want to give a diversified investment. ETFs track a specific index, sector, commodity, or other assets, providing exposure to multiple companies without buying individual stocks. This means less risk and more diversification.

You can teach your loved ones a responsible and intelligent way to invest by gifting them shares of a fund that is invested in a broad, globally diversified index of stocks.

ETFs are available across various sectors, allowing you to tailor your gift to the recipient’s interests. A technology-focused ETF could be an ideal choice for tech enthusiasts, while a healthcare ETF might suit someone interested in that field.

Unlike individual stocks, ETFs offer a balanced approach to investing, spreading risks across many companies, which can make them an attractive and stable introduction to the stock market.

Set Up a Custodial Account for a Minor

Custodial accounts allow you to start building a financial foundation for younger family members while teaching them valuable lessons about saving and investing. The funds are transferred to the child once they reach adulthood.

Gifts to custodial accounts can be invested in various assets, including stocks, bonds, and mutual funds. This flexibility allows for growth potential over time.

Custodial accounts instill a sense of responsibility in young adults as they take ownership of them, understand the basics of investing, and learn about wealth management. The financial head start you give them could help pay for college, buy a first car, or even put a down payment on a home.

Contribute to a Roth IRA

A Roth IRA is a unique gift option that offers tax advantages and the potential for long-term growth. Contributions to a Roth IRA are made post-tax, meaning the account grows tax-free, and withdrawals during retirement are also tax-free. This gift is particularly valuable for younger recipients, as they have time for compounding interest to work its magic.

The recipient needs earned income to contribute to a Roth IRA, so this option is best suited for young working adults or teenagers with part-time jobs. Helping them fund a Roth IRA early can set them on a path toward financial independence and security, especially given the tax benefits and flexibility associated with these accounts.

Start a 529 College Savings Plan

Education is one of a family's most significant expenses. A 529 College Savings Plan helps ease that burden by offering a tax-advantaged way to save for education costs. Contributions to a 529 plan grow tax-free, and withdrawals for qualified education expenses are also tax-free.

By starting or contributing to a 529 plan, you’re giving a gift that can pave the way for your loved one’s future. This plan isn’t limited to tuition. It can cover books, supplies, and room and board, making it a versatile choice for educational expenses.

Investing in education is one of the most meaningful gifts you can give, empowering recipients to achieve their academic goals without the weight of financial strain.

Consider a High-Yield Savings Account

Not all gifts need to be tied to the stock market. A federally insured high-yield savings account (HYSA) offers a risk-free way to grow funds through interest. These accounts generally provide higher interest rates than traditional savings accounts, and funds are usually accessible anytime, making them a flexible gift for all ages.

A HYSA offers a safe introduction to saving and interest accumulation for those new to managing money or hesitant about investing in the market.

Whether it’s an emergency fund, a nest egg, or simply a place to store holiday cash gifts, a high-yield savings account is a practical option that teaches financial discipline while earning a modest return.

Gift Precious Metals

Precious metals like gold and silver are classic investments that have retained value for centuries. These tangible assets appeal to those who prefer physical investments over paper or digital ones. Coins, bullion, and bars can be gifted in small or large amounts, providing flexibility.

Precious metals may provide a hedge against inflation and market volatility, offering stability when other investments experience fluctuations.

For younger investors, this gift can offer an interesting starting point in asset diversification and introduce them to the broader concept of wealth preservation.

Gift Bonds for Stable Returns

Low-risk bonds offer a safe, stable investment that appeals to those seeking a reliable income stream. Bonds are loans to governments or corporations that pay interest over time. Treasury, municipal, and corporate bonds have distinct advantages, from tax-free income to steady, predictable interest payments.

Gift bonds teach the recipient about fixed-income investments and the balance they bring to a diversified portfolio.

Bonds provide security and predictable returns, making them an excellent choice for the cautious investor or as part of a larger investment mix.

Open a Certificate of Deposit

Certificates of Deposit (CDs) provide a fixed return on investment over a specified term. They require the investor to leave their money in the bank for a predetermined period, typically a few months to several years. The investor receives a guaranteed interest rate, often higher than a regular savings account.

Limit your choice of CDs to those insured at banks that are members of the Federal Deposit Insurance Corporation.

CDs are straightforward, making them ideal gifts for investors new to investing or looking for a secure way to grow their money. They also work well for those who don’t need immediate access to their funds and prefer a guaranteed return over market risk.

CDs are a disciplined way to save and reward patience with steady growth.

Gift a Mutual Fund

Mutual funds are professionally managed portfolios of stocks, bonds, and other securities that provide broad diversification in a single investment. Gifting a mutual fund offers an easy entry point into the investment world that doesn’t require much day-to-day involvement.

Mutual funds offer a mix of assets that align with various risk tolerances, so you can select one that matches your loved one’s financial goals, whether they’re looking for growth, income, or a balanced approach. Managed by financial experts, mutual funds are a smart way for beginners to access a diversified portfolio without the complexities of individual stock picking.

Limit your gifts to low-fee, broadly diversified index funds, which have historically outperformed more expensive, actively managed mutual funds.

Final Thoughts

The holiday season is a time for thoughtful giving, and investment gifts go beyond temporary delight to offer a foundation for lasting financial security.

These ideas—from stocks and ETFs to bonds and CDs—bring unique benefits and growth potential.

By choosing an investment as a gift, you’re empowering your loved ones to build wealth, learn about finance, and take proactive steps toward a financially sound future.

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