Here are 5 ways to gift your mom financial security this Mothers' Day

This Mothers' Day, along with gifting your mother greeting cards or a bouquet of exotic flowers, gift her something that will make her self-sufficient in the long-term. A gift that will yield good returns in the post-retirement years as well as act as a protective umbrella will go a long way in ensuring financial stability. Generally, mothers tend to compromise on their expenses for a better future for her kids, and end up spending on their necessities rather than luxuries.

Whether your mom is a working professional or a home maker, these five financial tips would go a long way in achieving financial security during her sunny days.

This has to be an utmost priority. Health insurance is something which should be bought early in life. The earlier the insurance products are bought, the cheaper they are. Having a health insurance will prove to be a boon as it will take care of the hospital bills that may arise in future. Having insurance would safeguard you from unexpected high medical cost. It is critical to buy health insurance because medical care is expensive and is especially a necessity for private sector employees as the benefits of government schemes are not applicable to them.

Pension plans

A pension plan is a financial product that will secure the retirement years by providing a monthly income. A small portion of your income can provide financial stability to your mother during her retirement years. Payment for such pension plans can be done through lump sum or monthly payments. Almost all insurance companies provide pension plans in India. Another advantage is that certain pension products offer immediate pension support on lump sum payment.

Fixed deposits

Fixed deposits (FDs) are the preferred mode of investment of the previous generation. FDs earn a yearly interest of around 7-8 per cent which is higher than what a saving bank account offers. FDs are also safe and offer guaranteed fixed returns. They are liquid financial instruments which can be converted into hard cash easily but there is a small deduction in the returns offered. Having some FDs in her name will provide a sense of financial security to your mother.

Retirement funds

Retirement fund is a corpus which helps in funding the non-working years of a person's life. Ideally retirement fund has to be created during the person's working tenure. To fund the retirement years of your mother, start by creating a corpus of fund overtime and invest it for over a 10-year horizon in safer instruments such as balanced mutual funds to maintain an equilibrium between safety of capital, return and capital appreciation. Balanced funds are ideal investments for risk neutral investors.

Sovereign gold bonds

Sovereign gold bonds (SGB) are financial instruments issued by the Reserve bank of India (RBI) on behalf of the government. They are substitutes for holding physical gold and would allow your mother to earn returns through capital appreciation as the price of gold changes. The SGB offers a superior alternative to holding gold in physical form. The risks and costs of storage are eliminated. Investors are assured of the market value of gold at the time of maturity and periodical interest. SGB is also free from issues like making charges and purity when it comes to gold in the form of jewellery. Moreover the SGB bears interest at the rate of 2.50 per cent (fixed rate) per annum on the amount of initial investment.