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A father's role in his children's lives cannot be quantified, but it can only be expressed in emotions. A father makes several sacrifices for his children and family but seldom expects anything back. Beneath everyone’s success is a strong foundation of the dreams and aspirations of a father who believes in only taking care of his family and many times not even expressing their feelings and emotions to the family.
Even while the love and sacrifices of a father are immeasurable, this Father's Day, one can make an earnest effort to surprise their father with bundle of financial gifts:
Medical Insurance
The Covid-19 pandemic outbreak has emphasised the need for robust medical insurance. A single event of hospitalisation carries a high potential to jeopardise the monthly budget. It becomes more crucial when the income sources are limited.
Even without the pandemic, the human body demands more care as one grows older. As such, the medical expenses increase over time. One can always consider a separate medical insurance cover for their parents. If they already have it, they can consider increasing the coverage amount to beat the medical inflation.
This will not only give you a mental satisfaction to have protected your parents from any medical contingencies, but one can also avail tax benefits for making payments towards such medical insurance premium under Section 80D of the Income Tax Act, 1961.
Add-on Credit Card
One can gift an add-on credit card to their Father for any purchases, which grants him the flexibility to spend money at his discretion. Considering the responsible nature of parents, it is not likely that they will indulge in any exceptional spending. However, having a credit card at their disposal is likely to provide them with suitable comfort to spend on items they need, without relying on external help or assistance.
Further, with digital payments becoming popular, having an add-on card will save the requirement of carrying cash everywhere. It might also be difficult for them to apply for a new credit card at their age, and hence, an add-on card can always be helpful for them.
Earmarked Fixed Deposits towards Expenses
One can consider having an earmarked fixed deposit for his parents, which can meet their regular expenses through monthly interest pay-outs. While parents, especially Father, will never ask their children for financial support, it is our moral responsibility to hear the unsaid and provide a financial support towards their needs.
Fixed deposits have the option for monthly/ quarterly semi-annual interest payouts, which can be made directly to their savings account. Additionally, if the Father is a senior citizen, the benefit of a slightly higher interest rate can also be taken as per the interest rate policies of respective banks.
Purchase of Annuity Plan
This can be one of the best Father's Day gifts if your dad has recently retired from his working life. One can also consider gifting an annuity plan to his Father, which provides him with monthly payments against fixed lumpsum investment.
It is a pension product that offers regular cash flows to the annuity holder. Many different annuities can be purchased, including life annuity, life annuity with return of investment on death, joint life survivor annuity, etc.
In each of such annuities, the rate of annuities and the quantum of monthly payments differ. Moreover, since your Father will receive direct payments from annuity provider (insurance company) and not from you monthly, it also gives him a sense of financial independence during the post-retirement life.
SIP
One can also register a Systematic Investment Plan (SIP) in the name of their Father. Such investments may be in the "Payout of Income Distribution cum capital withdrawal option" (erstwhile known as dividend option), which could provides regular cash flows to the investor based on the profits realised by the scheme over the longer period of time.
While this option may seem similar to purchasing an annuity, SIP investments allow corpus accumulation over time instead of a lumpsum investment. Further, the annuity will provide guaranteed returns, while mutual fund investments tend to offer market-linked returns. As such, mutual fund investments carry the potential to offer better returns to the investors.
Make your Father feel special this Father's Day and every day!
Disclaimers:
UTI AMC Ltd is not an investment adviser, and is not purporting to provide you with investment, legal or tax advice. UTI AMC Ltd or UTI Mutual Fund (acting through UTI Trustee Company Pvt. Ltd) accepts no liability and will not be liable for any loss or damage arising directly or indirectly (including special, incidental or consequential loss or damage) from your use of this document, howsoever arising, and including any loss, damage or expense arising from, but not limited to, any defect, error, imperfection, fault, mistake or inaccuracy with this document, its contents or associated services, or due to any unavailability of the document or any part thereof or any contents or associated services.
Mutual Fund investments are subject to market risk, read all scheme related documents carefully
This material is part of Investor Education and awareness initiative of UTI Mutual Fund.
The information herein should not be considered as 'investment advice'. Reader is requested to make informed investment decisions and consult their Mutual fund distributor or financial advisors to determine the financial implications with respect to investing in Mutual Funds
