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17 Ways To Give Money As A Gift

Jordan Bishop • May 20, 2024

person delivering a gift card

If done right, giving money as a gift can be as personal and thoughtful as buying a physical gift. The key, though, lies in choosing a method that suits the circumstances, the recipient’s needs, and your relationship with them.

Whether through checks, cash, digital transfers, or more creative means, this guide explores a few ways to give financial gifts that are both meaningful and practical.

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Why cash can be the best present

Cash is a versatile and thoughtful gift suitable for birthdays, holidays, graduations, weddings, and more. Unlike other gifts that may miss the mark, cash ensures recipients get exactly what they desire or need, making it a pragmatic choice.

But the benefits of gifting money extend beyond its practicality. For younger recipients, money can be an educational tool, teaching them valuable lessons about budgeting, saving, and financial planning. Cash is an investment in their future, empowering them to make choices that align with their aspirations and needs.

Here are five ways to give money as a gift.

1. Check

Checks remain a popular and reliable method for gifting money, offering a great blend of tradition and practicality. They provide a secure alternative to carrying large amounts of cash and allow for a personal touch, like a heartfelt note in the memo line, making them especially suitable for occasions like weddings, graduations, and significant milestones.

Gifting money through a check can also offer tax benefits. You can gift up to $18,000 per year (as of this year) to another person without incurring taxes or needing to report the gift to the IRS.¹ This exclusion means checks can efficiently transfer wealth or support someone’s financial goals without a tax burden.

Pros

  • Security: Checks are less risky to mail than cash. If lost or stolen, checks can be stopped and reissued.
  • Convenience: Recipients can deposit checks through traditional or mobile banking whenever it’s convenient.
  • Record-keeping: Both giver and receiver have a transaction record, which helps you keep track of your finances.
  • Personalization: Checks allow for a personal note in the memo, making the gift more memorable.

Cons

  • Cashing fees: Recipients without bank accounts might face fees for cashing a check, reducing the net amount received.
  • Risk of overdraft fees: If recipients delay cashing a check, they may face overdraft fees if their account balance is insufficient to cover the check’s value.
  • Expiration concerns: Checks may become invalid if not cashed within six months.²
  • Loss or theft: While checks are more secure than cash, they are still susceptible to loss and theft.
  • Delayed fund access: Immediate access to funds can vary; typically, only $200 is available the next business day, with the remainder subject to bank processing times.³

2. Cash

Gifting cash is one of the most direct and universally appreciated gifts. It eliminates complications common with other forms of payment. Whether for a birthday, a holiday gift, or just a way to show appreciation, cash ensures the recipient can use your gift as they see fit, from immediate purchases to saving for future needs.

Cash gifts share the same advantage as checks: you can gift up to $18,000 per year to another person without facing any gift tax consequences.

Pros

  • Immediate use: Cash can be used right away, which is convenient.
  • Universal appeal: Cash is ideal for people of any age, including children who are learning about the concept of money and its value.

Cons

  • Security risks: Mailing cash is risky due to potential theft or loss.
  • Accessibility issues: Getting cash typically requires visiting a bank or ATM, which might not be convenient for all recipients.
  • Deposit necessities: If not spent, cash needs to be deposited in a bank, requiring an extra step for those who prefer or need to manage their finances through a bank account.
  • Limited acceptance: Some transactions require non-cash payment methods, limiting where and how cash can be used.

3. Gift card

Gift cards are an increasingly popular method for gifting money, combining the flexibility of cash with a more personal touch. You can pick them based on the interests of the person you’re buying them for, providing a thoughtful alternative to cash or checks.

Gift cards are treated like gifts of cash or checks for tax purposes, which means the same $18,000 annual exclusion applies.

Pros

  • Festive and personal: More personalized than cash, gift cards feel like a thoughtful gift.
  • Broad availability: Available from thousands of physical and online retailers.
  • Flexibility: Can be regifted or sold if the recipient prefers something else.
  • Tax exemptions: Gift cards are often exempt from sales tax at the point of purchase.
  • Savings opportunities: Gift cards may be available at a discount, offering more value than the actual cost.
  • No bank needed: Gift cards are accessible even to people without bank accounts.

Cons

  • Fees: Some gift cards come with activation, maintenance, or non-use fees.
  • Expiration dates: Although legally valid for five years, gift cards can expire, which may limit the recipient’s usage time frame.
  • Potential waste: Unused balances can lead to wasted money.
  • Risk of loss: Like cash, gift cards are susceptible to loss or theft.
  • Zero-balance risk: There’s a chance of buying or receiving a card that has been fraudulently depleted of funds.

4. Bank transfer

Bank transfers are an efficient and modern way to gift money, particularly for transferring larger sums securely. Bank transfers are especially useful for gifts involving significant amounts, such as helping with a down payment on a home, contributing to major life events, or supporting someone’s education.

Bank transfers for gifting fall under the same IRS rules as other forms of monetary gifts.

Pros

  • High transfer limits: Ideal for sending large sums of money, which is often necessary for significant gifts or financial support.
  • Security: Utilizes advanced security protocols and data encryption to ensure a safe transaction.
  • Speed: Bank transfers often occur instantly, making them especially useful for international gifts.

Cons

  • Transfer fees: Some banks charge fees for sending or receiving money, especially for international transfers.
  • Processing time: While faster than many alternatives, some forms of bank transfers (e.g. ACH transfers) can still take several business days to complete.
  • Cancellation difficulties: A bank transfer can be challenging to cancel once initiated, particularly if the recipient’s details are incorrect.
  • Daily limits: Most financial institutions impose daily transfer limits, which could be restrictive depending on the amount you wish to send.

5. Payment apps

In recent years, peer-to-peer payment apps have revolutionized how we send and receive money, making them a fantastic option for gifting. These apps offer the convenience of sending money instantly from your smartphone, which means you can gift at a moment’s notice – perfect for last-minute presents or when you can’t be with someone in person.

From a tax perspective, money sent through payment apps is treated like any other monetary gift.

Chime tip: include transaction details when sending money as a gift so sorting through your year’s transactions is easier if you file taxes as a freelancer.

Pros

  • Instant access: Recipients often get immediate access to the funds, which they can use right away without any delays.
  • Convenience: Money can be sent from anywhere, at any time, from a smartphone, computer, or other devices.
  • User-friendly: Payment apps are generally easy to use, with straightforward interfaces that make sending and receiving money simple.

Cons

  • Fees for instant transfers: Some apps charge fees for instant access to transferred funds, which might reduce the overall amount the recipient receives.
  • App requirement: Both sender and recipient sometimes need to have the same app, and the recipient often must have an account set up to receive funds.
  • Risk of error: Sending money to the wrong recipient can make it difficult to get the funds back into the right account.
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8 additional ways to give money as a gift

Aside from traditional methods like cash, checks, and digital transfers, there are several other innovative and thoughtful ways to give money as a gift. These options can cater to the recipient’s specific interests, help them achieve their financial goals, and contribute to their long-term prosperity.

Here are a few more creative ways to give money as a gift:

  • Stocks: Gifting stocks can help someone start or expand their investment portfolio, potentially providing long-term financial benefits.
  • Cryptocurrency: For those interested in digital assets, cryptocurrencies like Bitcoin or Ethereum can be an exciting and trendy gift.
  • ETFs: Exchange traded funds offer a more diversified approach than individual stocks and are an excellent gift for those looking to invest without picking specific stocks.
  • Charitable contributions: Donating to a charity in someone’s name is an ideal gift for those who prefer to support a cause they care about rather than receive material items.
  • Silver or gold: Precious metals like silver and gold hold intrinsic value and may hedge against inflation, making them a thoughtful and enduring gift.
  • NFTs: For the art lover or digital enthusiast in your life, non-fungible tokens (NFTs) related to their interests can be an especially unique gift.
  • 529 Contributions: Contributing to a 529 college savings plan is a perfect way to invest in a child’s or grandchild’s future education.
  • CDs (certificates of deposit) or savings account transfer: Placing money in a CD or savings account for someone else provides them with a risk-free investment that can grow over time, ideal for future financial planning.

4 unique gift ideas to give money as a gift

While monetary gifts are often appreciated for their practicality, presenting them in a unique way can add an element of fun. These creative ideas can make your gift more memorable.

  1. Money cake: Construct a decorative “cake” made entirely of rolled or folded bills (here’s an example of how to make one). This “cake” can be a festive and visually impressive way to gift money, especially for birthdays or graduations.
  2. Tissue box: Fill a tissue box with bills so that pulling one bill leads to the next, creating a continuous stream of cash. It’s a playful and unexpected way to give money that guarantees a smile.
  3. Money bag: Pack a small bag or pouch with coins and bills, mimicking a treasure bag. This is particularly fun for themed parties or as a whimsical gift for children.
  4. Scavenger hunt: Hide money around your home or a chosen location and create clues leading the recipient on a scavenger hunt. Each clue leads to a small amount of money, culminating in a final, larger sum.

The art of gifting money

From checks to payment apps, each option for gifting money offers unique benefits for certain situations. When done right, you can transform a simple gesture into a meaningful expression of care.

To learn more, here’s what to consider if you are thinking about lending money to family.

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¹ Information from the IRS’s "Frequently Asked Questions on Gift Taxes" as of May 5, 2024: https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes

² Information from Huntington’s "How Long is a Check Good For: Do Checks Expire?" as of May 5, 2024: https://www.huntington.com/learn/checking-basics/how-long-is-a-check-good-for

³ Information from Consumer Financial Protection Bureau’s "How quickly can I get money after I deposit a check into my checking account? What is a deposit hold?" as of May 5, 2024: https://www.consumerfinance.gov/ask-cfpb/how-quickly-can-i-get-money-after-i-deposit-a-check-into-my-checking-account-what-is-a-deposit-hold-en-1023/

⁴ Information from FDIC's "FDIC Consumer News: What You Should Know About Gift Cards" as of May 5, 2024: https://www.fdic.gov/consumers/consumer/news/december2019.html#:~:text=Under%20the%20law%2C%20a%20gift,places%20general%20limitations%20on%20fees.

⁵ Information from Investopedia's "The Better Inflation Hedge: Gold or Treasuries?" as of May 5, 2024: https://www.investopedia.com/articles/investing/092514/better-inflation-hedge-gold-or-treasuries.asp

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