24 Dec What’s the best way to give a money gift?

Q. I’m planning ahead for the holidays. My adult children don’t need physical gifts but I’m sure they would like cash. Am I better giving actual cash (or a check) with the idea that they could use it to pay down debt (I’m assuming they have debt haha) or buying something like an I-Bond?
— Mom

A. Great question.

Giving money to adult children — whether as cash, check or an investment like I-Bonds — is very thoughtful and can be both helpful and useful.

But before making a decision on their behalf, perhaps you might talk to them about what they would prefer, said Claudia Mott, a certified financial planner with Epona Financial Solutions in Basking Ridge.

“While they may not want to reveal the details of their financial picture, the choice between a short-term gift of cash or a long-term investment might be a choice they should make,” she said.

When it comes to gifting money or assets, the maximum that you can give each of your children — and their spouses — is $19,000 in 2025, she said. This is the current gift tax exemption limit. Any amount over and above that would need to be reported on a gift tax return — IRS Form 709.

“The gift of cash or a check would provide the opportunity for your children to pay bills, reduce debt, build their emergency savings fund or set it aside for a major expense,” she said. “It offers flexibility and lots of options.”

A longer-term alternative would be an investment such as an I-Bond or perhaps providing the cash that enables your children to make an investment account in a mutual fund or exchange traded fund, Mott said.

An I-Bond is a government savings instrument that earns interest and is inflation-adjusted. They can offer attractive rates as compared to typical savings accounts, Mott said.

“Up to $10,000 can be purchased each year per person. The current composite rate 4.03% and is effective through April 2026,” she said. “This rate is comprised of a fixed rate of 0.90% which stays with the bond for its life, an inflation rate of 3.12% which is adjusted every six months.”

I-Bonds must be held at least one year, and if redeemed before five years, you’d forfeit the last three months of interest, she said, noting that taxes on the bonds are deferred until redemption.

In order to gift I-Bonds both you and your child will need to have Treasury Direct accounts, Mott said.

“The bonds are purchased electronically. You would indicate the bond is a gift and then provide your child’s name and Social Security number,” she said. “The bond will be placed in your `gift box’ and will await transfer until you request delivery to their account.”

An alternative investment option would be to provide a gift with the specific purpose of being invested, Mott said.

“Your children would need to open a taxable investment account with a reputable custodian,” she said. “You might engage in a conversation of what type of investment they could purchase with the money with a goal of long-term appreciation.”

Email your questions to .

This story was originally published in December 2025.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.