Special Occasion Gifts for Children: 21st Century Alternatives to Savings Bonds, Stocks, Mutual Funds and 529 Plan
Gifts of Financial Instruments
From time to time, I am asked about the wisdom of and procedure for using the investments listed in the sub-title above for baby gifts, children's birthdays, bar mitzvahs, etc. While these were staple gifts a generation ago, I generally advise against using them for this purpose in the Digital Age.
The biggest reason is that all of these instruments require the donor to obtain the child's and/or parents' birth dates and social security numbers. These days, asking for that data may be sketchy/awkward. Additionally, account registration considerations can be complicated and naive decisions about how the assets/accounts are titled can have unintended tax and/or financial aid consequences later on.
Small one-time gifts of financial instruments also run the risk of being forgotten/lost over time, as illustrated by the fact that there are currently approximately $17 billion in uncashed savings bonds that are beyond their 30 or 40 year maturity dates.
21st Century Special Occasion Gift Ideas
In the modern era, gift cards have effectively replaced the aforementioned financial instruments. Amazon is a popular choice, but there are many specialized "experiential gift cards" for those who wish to add a more personal touch. StubHub, AirBnB, and Fenway Park are all examples of companies whose gift cards might brighten a recipient's day.
Another unique special occasion gift idea is 1 oz. silver bars or coins. Gifts of silver (or gold, if you are a big spender) do not require the donor to obtain any personal data about the recipient. They are worth their weight every day, and they just plain look cool!
U.S. Savings Bonds- Buying, Gifting, and Redeeming (TheBalance.com)
Unclaimed U.S. Savings Bonds (Natl. Conf. of State Legislators)
What to Do if You Lost a Savings Bond (TheBalance.com)
Top Experiential Gift Cards (GiftCards.com)