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 savings. 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

Whether it’s a newborn, niece, grandchild or someone outside of your family, contributing money towards a child education is a great way to help plan for the future now. 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 designated education 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. You can research these plans with Merrill edge to learn their benefits before making a contribution.


Cash is a good option for children

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


Checks, CDs and savings bonds can help teens learn about money

Consider a check as a gift to a teenager: Unlike cash that they may be tempted to spend immediately, a check can help with learning how to manage deposits, balancing savings with spending. (Some banks allow kids to open checking accounts as co-owners with a parent or guardian at age 13, but different banks have different rules. For example, Bank of America does not restrict the age of a minor as co-owner. It is up to the parent or guardian to determine if ownership is appropriate for the minor.) If the teen doesn’t have an account yet, his parent can cash or deposit the check, noting on the back of the check they are a guardian.

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.


Try digital money and foreign currency for young adults

Consider going digital. If you know the recipient buys things online, giving them credit on an app store or money via a digital service 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 exchange rates and order currency online.


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.
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The material provided on this website is for informational use only and is not intended for financial 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 when making decisions regarding your financial or investment options.

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