Want to gift stocks to your friends or relatives? Check out options

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Rahul Kumawat, operation manager with a Gurgaon-based firm, is fond of Zerodha’s ‘gift’ feature. “It is a seamless process and in a day I could transfer shares to my friend. I have plans to gift stocks to my sisters on Rakshabandhan. The way gift cards on e-commerce websites has become a trend, soon gifting stocks will become popular too,” says Kumawat. Zerodha launched its gifting platform in November last year sensing the need for having such an option. You may gift stocks, ETFs and gold bonds to friends and loved ones via Zerodha’s gifting platform. Note that not all stock and ETFs will be available for gifting. There is an approved list of 1100-odd securities that could be gifted.

“I’ve stopped giving random gifts. Only been gifting stocks and ETFs for a while now. Don’t have to waste hours choosing the right gift and the best bit: several of my family and friends have started investing because of this,” tweeted Nithin Kamath a couple of weeks ago in a reply to a Zerodha user who had just gifted a few shares to a friend.

At a time when the stock market investment is gaining traction, gifting stocks can be a great option. The option to gift gold bonds instead of physical gold is appealing too.

“We have around 25,000 clients who have sent gifts of over 80,000 stocks. It is a flat curve that means people are gifting throughout the year. We average about 12,000 gift transactions a month,” a Zerodha spokesperson told Money9.

How can you gift stocks?

Both sender and the receiver need to have a Zerodha account.

“I initiated the transfer in the afternoon. My friend received the notification around 7-7.30 pm. She had to accept the gift before I could authorise the transfer. So, there are three check-points. First I’ll initiate the transfer, then the friend will confirm the acceptance and finally I’ll authorise the transaction,” says Kumawat.

One may transfer shares from other brokerages too if the broking firm has a system for e-DIS (Electronic delivery instruction slip). Zerodha built a separate platform after the launch of e-DIS for ease of transfer. One may transfer shares physically too in which the person will have to fill up a physical delivery instruction slip (DIS) and submit the same to his Depository Participant (DP). The receiver (done) will have to fill up a receipt instruction and submit it to his DP. Once that happens, the shares received from the donor’s DP will be credited to donee’s demat account. In this process the donor and donee don’t have to have demat accounts with the same brokerage.

Zerodha has plans to enable gifting of mutual funds to minors. Currently, there are a couple of mutual funds such as HDFC Children’s Gift Fund and ICICI Pru Child Care Fund etc that allow investment from the third party (donor).