AFTER Hari Raya Aidilfitri, many Malaysian parents are faced with a familiar question — what should be done with their children’s duit raya?
Financial experts say the money should ultimately benefit the child, while also serving as an early lesson in financial responsibility.
Licensed financial planner Rafiq Hidayat Mohd Ramli said duit raya should be treated as a trust belonging to the child, not as an extension of household income.
“Parents can manage the money by dividing it into several portions, such as savings, a small amount for controlled spending so the child can enjoy it and where appropriate, a portion for conservative investments.
“The key principle is to manage the funds with a clear purpose rather than absorbing them into general household expenses,” he said in an interview with Sinar Daily.
Rafiq emphasised that children’s ‘duit raya’ should not be used for routine family expenses. In principle, the money belongs to the child and should not serve as a regular source for daily household needs such as groceries or other routine spending.
However, in the case of a genuine emergency, parents may temporarily use the funds, provided it is treated as a loan and repaid once the family’s financial situation allows. Maintaining responsibility and transparency in handling the money is essential.
He also highlighted practical ways to grow the funds, tailored to the child’s needs and the intended timeline for their future benefit.
“The choice of financial instrument depends on the objective, time horizon and level of risk tolerance. For short-term purposes, children’s savings accounts or fixed deposits can be suitable.
“If the aim is to build funds for education, the National Education Savings Scheme (SSPN) offers a practical option, while investments under Amanah Saham Nasional Berhad (ASNB) may be appropriate for medium- to long-term growth.
“In managing a child’s money, safety and suitability should always take priority over pursuing the highest returns,” he said.
Rafiq suggested that gold can be included as a small component of a savings strategy because it often acts as a store of value over time.
However, he cautioned against relying on it too heavily, as gold prices can fluctuate and it is not well suited for short-term needs.
“A high-risk, high-reward approach is generally not advisable when dealing with children’s funds, as stability and long-term benefit should remain the priority,” he emphasised.
Rafiq highlighted that ‘duit raya’ offers an early opportunity to teach children financial responsibility. Basic concepts such as saving, spending and giving charity can be introduced as early as four to six years old.
As children grow, parents can gradually involve them in decisions about managing their ‘duit raya’, helping them understand the value of money and develop responsible financial habits from a young age.
Biomedical engineer Azizul Hakim Khair, whose daughter is about to turn one, said he views his child’s ‘duit raya’ as a resource for the future.
“As a parent, I view my child’s ‘duit raya’ as something that should benefit their future rather than be spent casually. Ideally, it should function as a long-term investment for the child.
“One approach is to save the entire amount for future needs, while another balanced method is to allocate about 70 per cent for savings and allow roughly 30 per cent for the child’s immediate wants or small personal expenses.
“This allows the money to serve a long-term purpose while still giving the child some enjoyment from it,” he said.
Azizul emphasised that ‘duit raya’ should not be used to cover household expenses. He believes that money given to a child should remain solely for the child, as providing for the family, including groceries and daily necessities, is the responsibility of the parents.
Respecting the intended purpose of the gift ensures that the funds are preserved for the child’s benefit.
He also shared his strategies for growing the funds and using the opportunity to teach children about financial awareness.
“To grow the value of the ‘duit raya’ over time, options that offer long-term benefits can be considered. SSPN is one practical choice, as it helps parents save for their child’s education while also providing tax relief.
“Investing in gold is another option often viewed as a store of value that may help protect savings against inflation and support long-term growth.
“Before deciding how to manage the funds, conducting personal research is essential. Understanding the different financial tools and options available allows parents to make more informed decisions and manage the money more effectively.
“Proper research helps ensure the funds are placed in options that can deliver the best possible outcome for the child’s future,” he added.
Non-governmental organisation (NGO) worker Qamarul Azarin, whose son is eight months old, echoed the sentiment of prioritising the child’s interest while acknowledging the reality of parental responsibilities.
As a parent, he believes a child’s duit raya should ideally be saved strictly for the child. However, Qamarul also recognises that parenthood comes with various challenges and unexpected financial pressures.
“If the money ever needs to be used, it is important for parents to keep track of how much was taken and when it was used so that it can be replaced later. The intention should always remain focused on preserving the funds for the child’s benefit.
“In certain situations, it may be acceptable to use the money for expenses that directly contribute to the child’s growth and wellbeing. If the funds are used for something that benefits the child’s needs, it does not seem harmful.
“Nevertheless, the focus should remain on the child rather than on covering general household expenses,” he said.
Qamarul emphasised the importance of structured saving and educating children about financial responsibility. To prepare for their child’s future, he and his wife have opened a SSPN account, providing a consistent and practical way to save for education.
In addition to structured savings, he also considers assets such as gold as a viable option for long-term wealth accumulation.
“Before deciding where to place my child’s ‘duit raya’, I prefer to conduct my own research to better understand the available options. While recommendations and advice from others can provide useful starting points, it is still important to examine each option carefully before making any decisions.
“For me, the most important considerations are security and the opportunity to teach my child about financial responsibility. Managing the money carefully today can help create a more secure future for the child.
“At the same time, learning how to handle financial responsibilities is also part of the journey of growing together as a family,” he said.