Introduction
Whenever you want to gift your loved ones on special days, there is often the dilemma, ‘What should I get?’ Raksha Bandhan is no different. Both parties involved (brother and sister) want to gift each other something that will add value to their lives. Of course, the first thing that comes to mind is cash. But instead of just giving cash, you can use that money to get a gift that can grow over time and help your sibling with their future dreams.
If you haven’t guessed yet, the gift we are talking about is a mutual fund SIP (Systematic Investment Plan)
Instead of gifting something that just sits in a closet, mutual fund SIP is a great way to contribute towards your sibling's financial future.
What is a Mutual Fund SIP?
Mutual fund
Mutual funds are financial vehicles that pool money from multiple participants and invest it in a wide portfolio of stocks, bonds, and other securities. They are invested by professional fund managers and you as an investor own a portion of the total holdings. Mutual funds have options for investors with varying risk tolerances due to their diversification, liquidity, and experienced management. You can pick between equity, debt, hybrid, and other funds based on their financial objectives and risk tolerance.
SIP
A Systematic Investment Plan, or SIP, allows you to invest a consistent amount in a mutual fund on a regular basis. This approach encourages a disciplined investment strategy, takes advantage of the power of compounding, and minimises risk by utilising rupee cost averaging.
How to Gift an SIP?
Gifting an SIP is, in a way, strengthening your sibling's financial future, just like a Rakhi thread strengthens your bond. Here is how you can get started:
Complete KYC
Your sibling will need to complete a one-time verification process known as KYC (Know Your Customer). Typically, this process requires the submission of their PAN card along with Aadhaar card. Every investment journey typically includes this essential step.
Set-up an Investment Account
Guide them through the process of setting up an account with a mutual fund company or an investment app.
Select a Mutual Fund
Choose a fund that can cater to your sibling's risk appetite. If they aren’t aware of the risk profile of different funds, explain the basics to them so they can make an informed decision.
Choose the SIP
Choose the monthly amount you'd like to contribute as a gift. You can choose either a monthly or a quarterly plan. You can either choose to pay the SIP for the long-term or you can invest a lump-sum amount and then they can continue with a monthly SIP of what they can afford each month.
Make sure you discuss future payments with them before you gift them the SIP. The idea is for you to do something special for them, and not put them under financial burden.
Why Gift an SIP?
There are several good reasons why gifting an SIP to your sibling this Raksha Bandhan is a smart choice. Here are a few:
Kickstart their financial journey
This is especially useful if your sibling has not yet begun investing. To make good investments and smart decisions, you need to have a firm financial base. Your gift of SIP can help you learn more about money and create good saving habits.
Compounding Benefits
Explain the benefits of compounding, so they understand how their investment gets returns that increase over time. Explain how small, consistent investments can accumulate enormous wealth over time.
Affordable
Let them know that they can start investing in mutual funds for as less as 100 per month. Once they start the investing habit, it becomes easier to continue and expand their investing horizon. Maybe the SIP you started for them can be the guiding light for their future investment journey.
Conclusion
Choose a gift that lasts and represents Raksha Bandhan's spirit of protection this year. A Systematic Investment Plan (SIP) is more than a gift—it's an investment in your sibling's future, financial freedom, and peace of mind.
Gifting a SIP encourages disciplined investing and has the potential to increase dramatically. This kind gift shows your concern for your sister's financial future. This modern Raksha Bandhan pledge opens the door to a prosperous future long after the celebrations.
Dive Deeper - Top Mutual Funds SIP 2025 | Types of SIPs | Beginner’s tips to start SIP | SIP Plan for 3 years goal | SIP Plan 2025 | Stock SIP vs Mutual Fund SIP | What is SIP | SIP vs FD | SIP vs RD | SIP vs SWP | SIP Mutual Fund for long term