Raksha Bandhan: Not just chocolates and sweets! Give your sister a special gift of SIP on Raksha Bandhan..

Raksha Bandhan 2025 Financial Gift: The festival of Raksha Bandhan is a symbol of love and trust between brothers and sisters. On this day, sisters tie a Rakhi on the wrists of their brothers and wish them a long life. Also, brothers promise to protect their sisters. On this special occasion, brothers look for a good gift for their sister, like a purse, a watch, jewelry, clothes, or a box of sweets.

But if you want to give your sister something that will promote her well-being and financial independence for a long time, then a Systematic Investment Plan, i.e., SIP, can be a great gift. SIP is an easy and smart way to invest in mutual funds.

You can invest less money in SIP.

Through this, you can invest a small amount every month or quarter. There is no need to invest a large amount at once. You can start with just Rs 500 and later increase your investment amount through 'Step-up SIP'. This gift can help your sister to fulfill her big dreams in the future, such as studies, a hobby of traveling, buying expensive gadgets, or many other things.

The biggest advantage of SIP is that it does not put a strain on the pocket. You can invest small amounts regularly. Secondly, you do not have to worry about the fluctuations in the market.

Benefit of compounding
It is difficult to predict the market timing, but through SIP, you can take advantage of the average cost of the rupee. That is, when the market is down, you can buy more units, and when the market is up, fewer units. This keeps the average cost of investment low. Also, the magic of compounding interest can multiply your money manifold in the long run. For example, if you do a SIP of Rs 1,000 every month for 20 years and get a 12% annual return, then your sister can have a fund of about Rs 9.99 lakh.

The option of fund selection is available in SIP.

Through SIP, you can set big financial goals for your sister. Be it education, marriage, or any emergency like job loss or medical expenses, SIP can be useful in every difficulty. But for this, it is very important to choose the right mutual fund. If your sister has a long-term goal and she can take risks, then an equity mutual fund is a good option.

If she wants less risk, then you can choose a debt fund or a hybrid fund. Always choose funds that perform consistently well, and the fund house has a strong record. Looking at the star rating is fine for the beginning, but do not rely only on it. Also, understand the past performance, investment process, and objective of the fund.

Give SIP to your sister like this

Income tax exemption is available on the amount invested in some SIPs. In this, you can get an amount of one lakh annually. It is easy and beneficial to gift Systematic Investment Plan (SIP) to your sister on Rakshabandhan. For this, the mutual fund units should be in demat form. First, you and your sister need to have a demat account. Then, give your broker or depository participant (DP) a delivery instruction slip (DIS) mentioning your sister's demat account number, the number of units and the reason for the gift. According to a Mint report, some brokers like Zerodha and FYERS offer online gifting through CDSL's Easiest platform. The transfer is charged at a fee of 0.03% or Rs 25 (whichever is higher) and 18% GST.

If your sister is a minor, you can start a SIP in her name and become the guardian. Tax-wise, the gift to your sister does not have to be taxed, but selling the units will attract capital gains tax. The process is simple, but do consult a financial advisor to choose the right fund and understand tax rules.

Gifting a SIP to your sister on Raksha Bandhan will not only be unique, but it will also make her future secure and self-reliant. Clothes or jewellery may get old, but the gift of a SIP will grow over time. This is a gift that will give your sister financial freedom and prosperity. So this Rakshabandhan, start a SIP for your sister and gift her a strong future.

Disclaimer: This content has been sourced and edited from News 18 hindi. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.