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6 creative ways to give money as a gift

Money is a great gift. But, depending on who you’re giving it to, there may be a better way to do so than writing a check or slipping some cash in an envelope. Teenagers might enjoy the instant gratification of cash, for example, but their parents might prefer you give a gift that teaches those teens about saving. Here are some different options of how to give money as a gift at every age and stage.


Consider a 529 plan contribution for newborns or young children

Contributing money toward a child’s education is a great way to help plan for the future now, whether it’s for a newborn, niece, grandchild or someone outside of your family. Because they are tax-advantaged,1   Section 529 college savings plans are an efficient way to do so. These investment accounts can be used to pay for qualified educational expenses—such as college tuition, books or computers. To contribute to a 529 plan you’ll need the account number, and you should use the contribution form that can be downloaded from most plans’ websites. Keep in mind that since a 529 plan is an investment, there is a risk that your contribution could lose value.


Cash is a good option for children

Giving young children cash can help them learn about money and math as well as spending responsibly. Teaching children to manage and appreciate money early can create good habits that reward the recipient long past the initial gift.


CDs and savings bonds can help teens learn about money

Unlike cash that a teenager may be tempted to spend immediately, options like CDs, savings bonds, checks or money sent to their account digitally through an app can help teens learn how to manage deposits and balance saving with spending. Zelle® allows you to quickly and easily send money directly to a teenager's bank account, providing they are eligible to enroll with Zelle® at their financial institution. Zelle® is available at hundreds of banks and credit unions in the U.S. (as well as in the Zelle® app, which is available to consumers whose bank or credit union does not yet offer Zelle®), and is always free to use at Bank of America.

For occasions like graduation, you might consider opening a certificate of deposit at a bank or purchasing a savings bond from the U.S. Department of the Treasury. While the graduate won’t be able to access the money right away, he or she will appreciate the extra savings down the road.


Go digital, or give foreign currency to young adults

If you know the recipient buys things online, giving them an E-gift card or credit on an app store can make it easy for them to use their gift. Or find out if they have any trips abroad coming up, and consider giving them foreign currency to use at their destination. Bank of America customers can check foreign currency exchange rates and order currency online or using the Mobile Banking app2.


Gift cards or gift funds are great for newlyweds

In many cultures, cash is a traditional wedding gift. But, if you’re looking for more creative ways to give, check if the couple has set up a place to receive cash as part of their registries. Many couples set up gift funds to pay for honeymoons (often called “honey funds”) or other big expenses, such as a down payment. If the couple hasn’t set up a gift fund and you’re hoping to give money, consider a gift card to a store where they’re registered. This will allow the couple to purchase any items left on their registry with flexibility.


Charitable contributions work well for adults

Some friends or family members may have everything they need. If that sounds familiar, a monetary donation to a charity they support is a thoughtful gift. Many adults have charities they prioritize and causes that have become important to them over the years; you’ll be acknowledging the recipient’s passion for a cause.

Keep in mind, almost everyone appreciates a cash gift. When in doubt, cash and checks are great staples. If you’re planning on gifting significant amounts, however, be sure to review tax rules.

  1. To be eligible for favorable tax treatment afforded to any earnings portion of withdrawals from Section 529 accounts, such withdrawals must be used for “qualified higher education expenses,” as defined in the Internal Revenue Code. Any earnings withdrawn that are not used for such expenses are subject to federal income tax and may be subject to a 10% additional federal tax, as well as applicable state and local income taxes. For distributions after December 31, 2017, qualified higher education expenses include tuition in connection with enrollment or attendance at an elementary or secondary public, private, or religious school. These distributions are limited to $10,000 per calendar year, across all 529 accounts for the same beneficiary. State tax treatment may vary.
  2. On your Mobile device: log in to the Mobile banking app, ask Erica® to help 'order foreign currency'. Or select the account you would like to use, scroll down to the Mobile Orders section and select Foreign Currency.
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The material provided on this website is for informational use only and is not intended for financial, tax or investment advice. Bank of America and/or its affiliates, and Khan Academy, assume no liability for any loss or damage resulting from one’s reliance on the material provided. Please also note that such material is not updated regularly and that some of the information may not therefore be current. Consult with your own financial professional and tax advisor when making decisions regarding your financial situation.

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