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For a memorable gift that truly keeps on giving, consider gifting stock shares.
Not only do such shares stand to grow in value, but they also help the recipient learn about the stock market and investing. What other gift can do all that?
Gifting stock is easier and cheaper than you might think. You can do it without opening a brokerage account, and you don’t have to spend hundreds of dollars to make the transfer.
Here are three routes you can take:
1. Go through a specialized company
There are companies that specialize in making it easy to give as little as one stock share — or even a fraction of a share — as a gift.
GiveAShare and Stockpile are two examples. They operate a bit differently, though, and one may suit your gift recipient better than the other.
“We specialize in true, one-share ownership in over 100 of the world’s most beloved companies. The recipient becomes a legally registered shareholder of THEIR company, entitling them to declared dividends, annual reports and any other shareholder perks.”
GiveAShare sells stock shares with framed certificates. For most publicly traded companies, you can opt for an authentic registered stock certificate. For a few companies that no longer issue paper, a replica certificate is available.
GiveAShare also sells a kit called “I’m A Shareholder.” It’s meant for kids, teens and young adults. The kit can be gifted alone without a share — it includes a coupon for $10 off the recipient’s first share — or with a stock share or a gift certificate good for one share.
Note that GiveAShare is not a brokerage firm. If the gift recipient later wants to sell the stock you gave, he or she would have to go to a broker or transfer agent.
So, you can pick the dollar amount you want to spend — as little as $1 and as much as $2,000. This is handy considering that you’d need to be willing to spend roughly $1,000 on a gift to give someone even one whole share of Amazon or Google, for example.
Because Stockpile is a brokerage firm, the stock you give someone ends up in a brokerage account. The recipient can sell it from there — or buy themselves more shares. The only cost for recipients is a trading fee of 99 cents.
If your gift recipient is a minor, he or she can still have a brokerage account with Stockpile. It will just be a joint account with an adult. The firm explains:
“If you’re under 18, we’ve got you covered. Sign up with an adult, and set up your own log-in so you can track your stocks 24/7. You can even place trades that mom or dad can approve.”
Stockpile enables you to give stock two main ways:
- As a gift card (mailed or given in person)
- As an e-gift (emailed or printed)
To buy a gift card and have it mailed to the recipient, visit Stockpile’s gifting webpage, select “Send Plastic” and scope out the gift-card options.
Basically, you choose a stock or ETF to give and a dollar amount. You’ll be able to choose a delivery date and add a personal message during the checkout process.
To buy a gift card to hand to the recipient yourself, use Stockpile’s store locator to find a store near you that sells Stockpile gift cards.
To buy an e-gift, visit Stockpile’s gifting webpage, select “Send an E-Gift” or “Print at Home,” and scope out the options.
Just note that if you go through Stockpile, you will be footing most fees, whether you buy a gift card or e-gift. For example, a gift card that’s redeemable for $25 will cost you $29.95 after fees are included. The extra few bucks goes toward costs like credit card fees and trading commissions.
The upside is that the gift recipient does not have to pay for these fees. There are no monthly fees or account minimums. To learn more, see Stockpile’s “How much does it cost?” page.
2. Use a direct stock purchase plan
If you don’t want to go through a third party, a direct stock-purchase plan may be for you.
As we explain in “How to Get Started Investing When You Don’t Have Much Money,” direct-purchase plans are an easy way to buy stock shares from the publicly traded company you wish to invest in:
“These plans are how big companies sell stocks directly to investors. Some companies may allow one-time purchases of stock, while others offer plans similar to automatic investment plans.”
Not all public companies offer direct purchase plans. Computershare maintains a list of those that do.
Some companies with direct-purchase plans also have gift-friendly options. For example, the webpage for Procter & Gamble’s direct purchase plan includes a printable gift announcement for folks who buy P&G stock as a gift.
3. Transfer stock you already own
If you already own stock, you can transfer ownership of some shares to the recipient. This works well if your recipient already has a brokerage account.
You might find procedural details on your brokerage’s website. Fidelity Investments, for example, has a “How to Gift Shares” webpage. If you can’t find such information, start by asking your brokerage about its transfer procedures. Such rules can vary from firm to firm.
My grandma gifted stock shares to me and my cousins this way. It was what she gave us for Christmas every year, transferred into custodial accounts with the intention of the stock remaining there until college.
Those shares have helped fund several degrees so far. Talk about a gift that keeps on giving.
For more neat gift ideas, check out our 2017 holiday shopping season page.
Have you ever given stock as a gift? Would you consider doing it? Let us know what you think by commenting below or on our Facebook page.