Gift your sister a good financial habit

Narendra Naidu's 27-year-old sister Raji has never saved a penny in her life. So, he plans to introduce his little sister to the world of savings by giving her a thoughtful gift this raksha bandhan.

"Raji is not good with managing finances. She has been working for six years, but has hardly saved anything. So, instead of giving cash or gold, I plan to invest on her behalf," said Naidu.

On the other hand, Pune-based IT professional Siddhartha Sinha has already been gifting savings products to both his sisters for the past three years.

"My idea of a gift is that it should be useful," said Sinha. In the first year, Sinha put Rs 20,000 in bank fixed deposits in both sisters' names.

Today, the deposits stand at Rs 22,500 each, returning an average six per cent a year. He then graduated to gifting mutual funds, which have been earning a dividend of Rs 6,000-7,000 for the last two years.

As individuals get smarter about financial planning, financial services companies have started promoting and packaging products to address the demand of the likes of Naidu and Sinha.

For those who do plan to gift their sisters a financial product this year, here are a few ideas.

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If you prefer pure savings products with returns higher than bank fixed deposits, mutual fund houses have some options. For instance, Taurus Mutual Fund is promoting its MIP Advantage Fund this festive season.

This is a monthly income plan (MIP) that invests in a combination of asset classes - debt, equity and gold.

"It provides diversification and has the potential to deliver superior risk-adjusted returns," said Waqar Naqvi, chief executive officer, Taurus Mutual Fund.

The product invests 65-95 per cent in debt, 5-25 per cent in exchange traded gold fund (gold ETFs) and 0-25 per cent in equities. More important, the minimum investment required  is Rs 5,000 and can go up to Rs 25,000.

Financial planners also advise an equity diversified fund for all occasions and market conditions.

In case you want a saving-cum-protection option, you can either buy a plain life or health insurance plan, or go for women-specific plans.

Bajaj Allianz Life Insurance has packaged four different plans for women under its 'Miss Confident Plan' scheme.

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For those below 18 years, there's a unit-linked child plan. There's also an insurance-cum-investment option that caters to women in different age groups.

For example, for girls above 18, you can choose from a traditional or a unit-linked plan as the base policy and buy an additional rider.

The plans also incorporate riders for pregnancy complications, child birth defects, critical illness and breast cancer.

For a middle-aged woman, Bajaj provides a pension plan on the base policy for Rs 500 a month and you can get back Rs 7,000 every month as pension.

All the plans need a minimum premium of Rs 1,000 a month or Rs 10,000 a year. You can also take up a single premium plan without a rider.

Even Kotak Mahindra Bank has come out with a 'Best Compliment Card'. It is a prepaid/debit card valid for two years.

You can have a minimum load of Rs 500 and a maximum of Rs 50,000 at a cost of Rs 100 and let your sister buy something of her choice.