Giving Money and Investments as Gifts: A Practical Guide

Giving assets like money, bank accounts, stocks, bonds, gold, and cryptocurrencies as presents can be an interesting alternative to gifting consumer goods. This guide answers the most important questions about how to give assets as gifts.

How can I give money as a gift?

• Cash

Giving banknotes as a gift is practical because you do not need to find out the recipient’s bank account information. Gifts of cash can also be used as a tool for financial education for kids. For example, gifting money in a piggy bank with a timed lock that only opens on a certain date can teach children to be more mindful about how they manage windfalls.

Tip: Pay attention to possible fees for withdrawing cash from your bank account. Avoid using credit cards for cash withdrawals, as the fees are typically very high.

• Bank transfers

Bank transfers can be a practical – if perhaps less personal – alternative to gifting banknotes, especially if you will not meet the recipient in person. While bank transfers require you to get the recipient’s IBAN, transfers with Twint only require a phone number.

Tip: If the person you are sending money to lives in another country, using the most affordable international money transfer services can save you a lot of money in fees.

• Vouchers and gift cards

If you know the recipient well, cash equivalents based on their interests can make for a more personalized gift. Examples include gift cards and vouchers for shopping and experiences, Reka Money for leisure, and Lunch Check cards for restaurant dining.

Tip: Keep your eyes open for discounted gift cards, vouchers, and day passes – including unneeded gift cards being resold second-hand on classifieds sites like Anibis and Tutti.

• Gift savings accounts

A gift savings account is a bank account designated for a child that they can only access once they turn 18. You do not need to be a child’s parent to open a gift savings account for them. Anyone – including parents, grandparents, godparents, and friends – can deposit financial gifts into the account.

Tip: Take time to compare the interest rates of gift saving accounts. It is also important to check whether any fees will apply when the account is eventually transferred to the child or closed.

How can I give stocks, bonds, and ETFs as gifts?

• Gift fund portfolios

Some Swiss banks and asset management services offer special gift fund portfolios or gift fund savings plans for children. Like gift savings accounts, these only become available to the child when they reach adulthood. Money put into gift investment portfolios is invested in ETFs, stocks, bonds, and other securities. Gift fund solutions are only advisable for children who still have around 10 years to wait before their eighteenth birthday.

Tip: Take time to compare the ongoing asset management fees charged by robo advisors and fund savings plans. Here too, it is important to check whether any fees will apply when the account is eventually transferred to the child or closed.

• Stock brokerage accounts

You could suggest helping the recipient to open a stock brokerage account or neobank account to begin investing. In this case, you can transfer your money gift right to their trading account and set up the investment for them.

Tip: Take time to compare stockbrokers on moneyland.ch. Invest in broadly-diversified ETFs (global stock index ETFs, for example), and follow the checklist for investing in ETFs.

• Securities transfers

A few Swiss stockbrokers let you transfer securities to another person who also has a stock brokerage account, for a fee. That means you can buy shares in a stock and transfer it to the recipient’s stock brokerage account.

Tip: Because transfer fees are high, it can be cheaper to just give the person money and help them purchase the same kind of assets themselves. You can find more information in the guide to stock transfer fees.

How can I give gold and other precious metals as gifts?

• Bullion

Coins and bars minted in gold, silver, or other precious metals make a practical and tangible gift that is also an investment. The recipient does not need any account or service provider, but simply takes ownership of the precious metal when they receive the gift.

Tip: Compare the markups that dealers charge above the spot price, as high markups can substantially detract from returns. You can find useful tips for buying silver and tips for buying gold in Switzerland on moneyland.ch.

• Precious metal ETFs

Some banks and robo advisors let you invest in ETFs that replicate gold, silver, platinum, and palladium spot price indexes. This lets you include precious metal investments in gift fund portfolios for children, for example.

Tip: The tips that apply to stock brokerage accounts and investments in general also apply to precious metal ETFs. Be aware that over long terms, the fees charged by the ETF (collectively shown as its total expense ratio or TER) combined with custody fees charged by the bank can make using precious metal ETFs expensive compared to physical bullion.

How can I give bitcoin and other cryptocurrencies as gifts?

• Physical blockchain wallets

Cryptocurrencies like bitcoin and Ethereum can make an interesting gift with potential to gain in value. If you are somewhat tech savvy, you can create a new wallet to use for your gift. You can then buy the corresponding cryptocurrency through a reputable service provider and transfer it to that wallet.

Any material on which you can write, etch, or print the keys of a blockchain address can be used as a physical wallet, including wood, metal, or paper. That gives you a lot of room for creating unique gifts that also incorporate a valuable asset. To give the gift, you simply hand over the item that contains the public and private keys to the recipient.

Tip: It is also possible to buy physical blockchain wallets that can be given as gifts. You can learn more about buying cryptocurrency in the guide to buying bitcoin in Switzerland.

• Cryptocurrency transfers

If the recipient already has a blockchain wallet for the cryptocurrency you want to give them, you can transfer cryptocurrency units to them electronically over the Internet. Before you can do this, you must obtain their public key.

• Cryptocurrency ETFs

There are also bitcoin ETFs and Ethereum ETFs that provide a simple alternative to buying real cryptocurrencies. You can buy shares in these ETFs using stock brokerage accounts or fund savings plans.

Tip: The tips that apply to stock brokerage accounts in general also apply to cryptocurrency ETFs. Over long terms, the ongoing cost of the ETF (the TER) combined with custody fees charged by the bank can make this an expensive option, compared to buying cryptocurrencies directly.

Are there other gifts that are also investments?

Many items that make good gifts can potentially gain value over time. These include things like stamps and other collectibles, quality wine, fine art, watches, rare whiskies, antiques, classic cars, as well as diamonds and other gemstones.

These make good gifts, especially if the person you want to surprise is a collector or otherwise passionate about the topic. However, these goods can only be considered an asset if the items you give have substantial potential to gain in value over time. Finding such items generally requires specialized knowledge.

How does giving money or assets as gifts affect my taxes?

Most cantons – but not all – have gift taxes that apply to gifts of money or other assets that qualify as wealth. However, these taxes only apply to gifts that exceed certain thresholds.

• Occasional gifts to people who are not related to you: Occasional, non-recurring gifts are exempted from gift tax if they fall below a certain threshold. Many cantons have a threshold of 5000 francs, but some have lower thresholds (2000 francs, for example).
• Occasional gifts to members of your family: Spontaneous gifts to your own children, your spouse, or your registered partner are generally not subject to gift tax, though the exact rules vary between cantons. Gifts to other family members and relatives, such as your parents, siblings, the children of your spouse or registered partner, and children placed in your care may be subject to gift tax, depending on the canton and the situation.

Before giving large financial gifts, you should review the gift tax laws of both your home canton and the canton where the gift’s recipient lives. Large gifts – whether or not they are taxable – should always be declared by both you and the recipient in your tax returns.

More on this topic:
Gift savings accounts explained
Fund savings plans explained
Tips for buying gold in Switzerland
Cash withdrawals: A practical guide
Christmas presents: How to give great gifts without breaking the bank