Financial Christmas gifts: investments, bonds and savings for your loved ones

Fancy giving something different this Christmas? Here are some financial gifts that could pay off in years to come.

It can be a struggle figuring out what to buy your loved ones for Christmas, but investing some money or putting it in a savings account will give them a better gift in the long run. 

Here are some suggestions.

Premium Bonds

It’s an obvious one, but some bonds from the UK’s most popular home for savings has been a Christmas stocking filler for decades.

The current prize rate is 4.65% and you can invest from as little as £25.

The recipient can also withdraw their money at any time if they don’t win a prize.

So it’s a risk-free, albeit potentially low-earning, financial gift.

You can buy them online from the NS&I website. 

Children’s savings and investments

If the gift recipient is a child and you aren't keen on Premium Bonds, why not contribute to a savings account or a tax-free Junior ISA?

If they don’t have one already, you could arrange to open one in their name.

You can save up to £9,000 in a Junior ISA during the current tax year. 

The top interest rate on a cash Junior ISA currently comes from Coventry Building Society at 4.95%. 

You could also look at a Stocks & Shares Junior ISA. Some providers offer the chance to pick shares or invest in index trackers (which are preferred), while others just give a choice of funds.

Make sure you shop around and compare charges.

Or you could invest in individual company shares.

Beginner's guide to investing

Peer-to-peer lending 

While peer-to-peer investing never quite exploded in the way people thought it would a decade ago, there are still a handful of websites that allow you to lend money to people or businesses keen to borrow.

Examples include Kuflink and easyMoney (of easyJet fame).

You can choose to lend your money over terms of up to five years and earn a rate of up to 10%. Shorter terms, or ones that offer near-immediate access, come with smaller interest rates.

This isn’t without risk, as the money isn’t protected by the Financial Service Compensation Scheme. 

Crowdfunding

For something that perhaps has a bit more of a frisson of excitement about it, you could enable someone to become an investor in a company or project.

There are plenty of companies out there offering the option to invest small amounts, often as little as £5.

Big names here include Seedrs and Crowdcube, which allow you to invest in both start-ups and existing businesses.

All of these operations are regulated by the Financial Conduct Authority, although you could lose your money if a business goes under.