Sheiresa Mcrae Ngo

Zelle is a popular peer-to-peer (P2P) payment service with payments appearing in a recipient’s bank account almost instantly with no extra fees.

Skip to content 7 ways to give money as a gift By Sheiresa McRae Ngo, CEPF®, Bankrate Updated 9 minutes ago Close Key takeaways Giving money as a gift, whether it's cash, gift cards or a money order can be convenient. You can personalize monetary gifts to suit a recipient's preferences or needs. Understand the tax implications of monetary gifts. Gifts such as stocks, contributions to 529 plans or cash above the annual gift limit threshold come with specific tax benefits and considerations. Whether it's a special occasion like a graduation or an annual celebration like a birthday, figuring out what gift to give can be hard. Giving a cash gift can make that decision easier. But how can you give monetary gifts without seeming like you put in minimal effort? Here are some options to help personalize your giving and ensure the most thoughtful gift. Gift Benefit Gift card A gift card is a simple way to let a recipient pick out their own gift; even better if you get a gift card to one of their favorite stores or restaurants. Cash Cash is the easiest way to give someone money as a gift. You can find creative ways to present the cash, like making a money lei or sending it via Venmo with a funny emoji. Check or money order Checks and money orders are a fairly secure way to give cash. CDs or savings account transfer A certificate of deposit or savings account opened on behalf of your child can be used as a teaching tool for savings habits. Stocks The benefit of a stock gift is the gains your money could potentially deliver to the gift recipient over time, provided you chose well. 529 contribution A 529 plan offers tax-advantaged way to pay for a college education. In addition, funds in a 529 can be transferred to another recipient. Charitable contribution A charitable contribution allows you to honor a friend or loved one while supporting a meaningful cause. 1. Gift card If you know your gift recipient well, find their favorite store or restaurant and buy a gift card to treat them to something you know they'll love. Even if they're difficult to shop for, or you're not very close, there's nothing wrong with choosing a prepaid cash card . Add a heartfelt note to show how much you care. If you're still wary of coming across a bit too impersonal, try giving an experience instead. Pay for a movie dates or a trip to the spa, where you can spend time together and enjoy a nice treat. Benefits You may score a bonus for yourself when you buy a gift card for a loved one, especially during the holiday season. Near the end of the year, some restaurants and retail stores offer a bonus card when you spend a minimum amount on a gift card for someone else. You can also often score discount gift cards for less than face value through sites like GiftCards.com or find redemption bonuses through your credit card's rewards portal, like Chase Ultimate Rewards or American Express Membership Rewards Taxation Like cash, gift cards given by a friend or family member generally fall under the gift tax exemption, so unless you give more than $19,000 worth of gift cards per person in 2025, it won't be taxed. You also shouldn't be charged sales tax when buying a gift card, since your recipient will pay sales tax on the item(s) they purchase with the gift card. 2. Cash Give cash simply in a card or money holder or get extra creative (there are countless ideas online for inventive ways to give cash). You can find guides to DIY anything from dollar bills frozen inside giant ice cubes to cash-filled chocolate candy boxes. Or keep things virtual by transferring your gift funds into your recipient's Venmo or Cash App or Zelle account. You may lose some points for presentation, but these apps are convenient and much faster than mailing a check. If you know someone with international travel plans, you can personalize your gift by gifting cash in a currency they'll be able to use abroad. Benefits The biggest benefit of giving cash is simplicity. Though there may be occasions for which giving cash can seem inappropriate or a faux pas, it's also a straightforward gift that you can give and be assured your recipient will use it, rather than regift at a later date. Taxation Cash given as a gift is not considered taxable up to the annual exclusion, which is $19,000 for 2025, according to the IRS. If your gift is under this amount, you or your recipient won't be responsible for paying taxes on it. The exclusion is applicable for each person gifted, so you can give up to $19,000 per person per year without being taxed on the gifts. 3. Check or money order If you want to go a little old school, you can always choose to give a check or money order. Just make sure there is enough money in your bank account to cover the requested funds. You can purchase a money order at banks, credit unions, cash-checking stores, some retail stores and the post office. Make sure to hold on to your receipt. If the money order gets lost, this will help establish proof of purchase. Benefits A check or money order provides a secure way to give money. Your gift can be tracked and voided if lost or stolen, which offers an added layer of safety. Taxation Gifts below the annual exclusion amount are not taxable. If you give above the exclusion amount, the IRS requires the submission of a gift tax return (Form 709). Recipients typically don't pay taxes on gifts since a gift isn't considered income. 4. CDs or savings account transfer This isn't the kind of money gift you can give just anyone because it requires opening up a bank account, but if you want to teach your kids about personal finance and savings habits, it's a good option. And it's a gift you can build upon year after year. Start by teaching the value of saving money, explain how interest works with a CD and then escalate to teaching them how they can earn more over time with other investments. Benefits Not only are you putting away money now for your child to use in the future, you're also teaching valuable personal finance habits that can help them earn more throughout their lifetime. Currently, the best one-year CDs and high-yield savings accounts earn upwards of four percent annual percentage yield (APY). Do your research beforehand to find a bank offering a minimum balance and term length that works best for you and the recipient. Taxation Interest earnings on CDs and savings accounts are taxable . The owner of the account will receive a Form 1099-INT with information on interest earned that year from the bank or credit union. Your CD or savings account interest is taxed at the same rate as your income. 5. Stocks Giving a piece of ownership in a company, in the form of shares of stock , is another option. Before you dive in, though, take some time to consider the gift recipient. For adults, you can simply submit a transfer from to your financial institution to transfer your own shares into their account or transfer a mutual fund to someone with an account at the same institution. If you have individual stocks in mind, you can also purchase shares with popular companies on websites like GiveAShare If you want to give stock to a minor, though, you have to create either a Uniform Gifts to Minors Act (UGMA) or a Uniform Transfers to Minors Act (UTMA) account, which are essentially custodial accounts where the adult manages the money. When the child reaches majority age, then the money is theirs to use however they like. (Given this level of access, if you plan to give a financial gift to a child who's not your own, consult with the parents of the child first before opening an UGMA or UTMA account.) But consider whether a custodial account is actually the better option. In some cases, and depending on the size of your gift, setting up a trust or opening a 529 college savings plan , in which parents can retain more control, may be more effective. Benefits Stocks can be an instructive gift for teaching the value of investing, or simply a fun way for your recipients to own a share of a company they admire. The biggest benefit of giving stock is the possible gains your money may deliver to the gift recipient over time (though of course, your investment could also lose value). But for the right recipient, it can also be a useful opportunity to educate them on how the stock market works and how money is earned in stocks via capital appreciation and dividends, and watch it grow over time. Taxation Depending on whether you're gifting your own previously held stock or purchasing new stock and what type of account it's held in, you or your recipient may be liable for capital gains and other tax obligations. Because there are several different ways you can give stock and different tax implications for each (for both you and your recipient), consider speaking with a financial advisor or accountant beforehand to determine the best giving options. 6. 529 contribution A 529 plan may not be the most exciting gift to a young child, but it can pay off exponentially in the future, especially as student loan debt continues to rise. If you're looking to invest in the future of a child in your life, you can contribute your money to a 529 plan , which may be used in the future to pay for education expenses like tuition, textbooks and other supplies. Whether your friends recently had a baby and you want to help establish a college fund or your niece or nephew is nearing graduation age, 529 plans are great tax-advantaged investments. Benefits There's no limit to the number of 529 plans you're allowed to set up, and you can name anyone as a beneficiary. Typically, 529 plans aren't counted as a student asset when filling out the FAFSA forms for financial aid, so it won't be counted against your recipient's financial merit-based aid awards. That noted, it must be reported as an investment asset of the parent on the FAFSA form. You can also transfer unused 529 funds to someone else, if the original beneficiary decides against pursuing higher education. Taxation A 529 plan is a sound way to begin tax-advantaged savings for a child's education. Your contributions are made after tax, but the money grows tax-free and isn't taxed once it's removed from the account for qualified education expenses. And though there aren't federal deductions for contributions, many states offer tax credits or deductions. However, a 529 plan carries a withdrawal penalty. If, for example, you don't use your plan for eligible expenses, such as for tuition and fees, textbooks, supplies and room and board, those “nonqualified” withdrawals may incur a 10 percent penalty and be subject to federal income taxes on the investment gains at whatever rate the IRS would normally charge. Fortunately, there are exceptions to the withdrawal penalty , and there's no 529 early withdrawal penalty as would be with a retirement account. There are also state penalties for nonqualified withdrawals from 529 plans. Many states impose taxes on nonqualified withdrawals. 7. Charitable contribution For those times when you're still left wondering what to get the person who truly has everything, a monetary donation to a charity or cause they support can be a great way to show you care. Familiarize yourself with the causes your recipient champions and make a donation in their name. When it's time for the gift exchange, you can simply give a card with a message about the donation. If you find a charitable organization that aligns with the recipient's interests, but not necessarily one they have specifically mentioned, you can vet the organization on sites such as Candid and Charity Navigator. Some charities provide these thank-you cards themselves and may even specify where exactly your donation will go. Benefits Donating to a cause in someone's name can easily solve your gift indecision for the people in your life who truly seem to have it all. Not only are you helping to aid a cause you and your recipient care about, but you may even inspire others to pay it forward with a donation of their own. Taxation Charitable donations, in addition to doing good for a worthy cause, are also one of the most advantageous gifts for your taxes. Cash donations to qualified charities and nonprofit organizations are tax-deductible if you choose to itemize your deductions, as long as the donations do not exceed 60 percent of your adjusted gross income Tips for giving money as a gift Put security first whether gifting money. Only use trusted payment methods such as direct bank transfers or well-known payment apps. Also, make sure the recipient's information is accurate. Bottom line There are many ways to give money as a gift, and with so many options to choose from, you really can't go wrong. Giving a gift card or cash is pretty straightforward, but if you're giving something like stocks or CDs, you'll need to consider the taxation question. Then weigh the interests of your giftee, and you'll ensure your gift is thoughtful and well received. © 2025 Bankrate.com

Only 8% of Americans visited bank branches as their primary banking method in 2024, but 66% still value having branches in their neighborhoods.

Here’s how to proceed when your CD matures during falling rates.

Your bank may offer advanced personal finance hubs, providing insights into spending habits, tracking savings progress, and even creating budgets automatically.