I just came across this start-up, SparkGift, which allows you to give gifts of stock and index funds to friends and family.  Here  is a summary of their offering from their website:

Send a stock gift certificate in under a minute

There’s no need to fill out long forms, sign papers, or mail checks. You choose a stock or fund and pay. We create a gift certificate with your choice of stock and fund and deliver it to the recipient. It only takes a minute to give an investment that can last a lifetime.

Start gifting stock for as low as $20

With SparkGift you can give fractional shares of stocks and index funds. SparkGift charges a flat $2.95 gifting service fee for gifts up to $100, and a 4% fee for gifts above $100. All it takes is a Spark.

So, my first thought was “Wow, what a great idea!” My second was, “What about fees?”  $2.95 seems reasonable for handling all the headaches that come from purchasing fractional shares and then setting up a custodial account (if gift recipient is under 18 or 21, depending on state).

I am looking forward to having the CEO and co-founder, Peggy Mangot on my podcast show shortly and learning more about how this gift of stock can educate young people about investing in the stock market.  Stay tuned..

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.