This Father’s Day, show Papa you care: Here are 5 financial gifts for your Dad

This is one of the best financial gifts you can gift your parents, especially if they are elderly. It’s often difficult for elderly people to get health insurance on account of their age. An elderly father is more susceptible to non-communicable diseases. A good health cover can help your father get reimbursed for hospitalisation expenses, if and when they come.

“To provide affordable health plans for preventive healthcare, one can explore health financing companies that prioritise the well-being of older adults and offer necessary medical attention at reasonable costs,” says Aniruddha Sen, Co-founder, Kenko Health. He adds that opting for a senior citizens plan can be a suitable choice, as it caters to the unique healthcare requirements of these folks. Such plans include comprehensive coverage, allowing access to regular health check-ups, preventive screenings, consultations with doctors, and more, without imposing a significant financial burden.

Help him establish an emergency fund

An emergency fund is a separate savings account specifically designated for unexpected expenses such as medical emergencies, job loss, or home repairs/renovation. “It acts as a financial safety net and helps prevent the need to dip into long-term investments during unforeseen circumstances,” says Anup Bansal, Co-founder, Scripbox.

An amount of Rs 1-5 lakh is good enough to start an emergency fund if you can afford to set that amount aside for your father. But if that’s too high a figure to start with, you could start a SIP in your father’s name in a short-term debt fund, like a liquid or ultra-short-term fund.

Pay off a debt

Assisting your father to clear his outstanding loans can be a thoughtful and impactful Father's Day gift. By alleviating this financial burden, you will provide him peace of mind and a fresh start. “Discuss the details of outstanding debt, evaluate the feasibility of your contribution, and offer your help in paying off a portion of the entire debt,” says Ruchika Bhagat, MD, Neeraj Bhagat & Co, a chartered accountancy firm.

Start a SIP for your father

Investments are a powerful way to increase wealth over time. “By gifting investments to your father, you are presenting him with an opportunity to participate in the growth potential of financial markets,” says Bansal. It's a gift that emphasizes long-term financial well-being.

Gifting your father an investment, such as buying high-dividend stocks or setting up a systematic investment plan (SIP) in a mutual fund, is recommended by financial advisors. “It not only shows your commitment to his long-term financial wellbeing but also allows him to grow his wealth over time,” says Bhagat. Consult a financial advisor or do thorough research to choose investments that align with your father’s risk tolerance and financial goals, she adds.

Investing in bonds is less risky than stocks and can provide stability to an investment portfolio. “You can consider gifting your father government bonds, corporate bonds, or even bond funds,” says Bansal. He adds that gifting your father a fixed deposit in a bank can help him earn a guaranteed return on the investment. Take advantage of specific government schemes such as the Senior Citizen Saving Scheme (SCSS) for your father if he is a senior citizen.

But before choosing to gift an investment avenue, be sure to evaluate your father's financial situation, goals, and risk tolerance.

Gift a comprehensive financial plan

You can consider gifting your recently retired father a financial plan. “Defining clear goals and milestones, setting up a robust income generation strategy, and striking an effective balance between risk and returns are just some benefits that your recently retired father can get by working with a competent financial planner,” says Mayank Bhatnagar, Chief Operating Officer, FinEdge. With a proper financial plan and investing strategies, you’ll be ensuring that your father is not falling into behavioural traps that could compromise his retirement funds, he adds.

To sort out post-retirement income generation for your father, you should consult a qualified advisor. “The advisor will set up a systematic withdrawal plan (SWP) that combines equity-oriented funds with conservative funds such as target maturity funds, arbitrage funds and fixed maturity plans,” says Bhatnagar. The degree of aggressiveness would depend on several factors, such as other sources of post-retirement income, the overall size of the accumulated corpus, and the estimated duration of the post-retirement drawings.