I would reccomend finding out where the bride and groom are registered and purchasing something off of their registry list - this is the best way to ensure you purchase something that the newlyweds are in need of.
From lifescript.com:
"According to the experts from WeddingChannel.com, engagement gifts should never be expected by the bride- or groom-to-be. Often, guests have to pay for travel, lodging, food and, of course, a wedding gift. If, however, you are very close to the bride and groom—a parent, grandparent, sibling, or member of the bridal party—you may want to consider offering a small token of congratulations to the couple. In addition, if you are invited to an engagement party for the couple, a gift would certainly be appropriate, but not required. Depending on the length of the engagement, most couples will not have gift registries yet, which means that it may be up to you to pick out the perfect gift."
That said, pick out two fine bottles of champagne, and give one to the couple, and the other to the parents (who usually throw the engagement party). For something more eclectic than the usual Moët, visit http://venokado.com/index.html
Given that they just got engaged, I wouldn't expect to find a registry up for their wedding just yet.
A nice bottle of wine is always a safe bet, but not very creative or sentimental. I would suggest tickets to the theatre (not the movie theatre) or a concert, especially if you know something they'll both like. Just remember to save the big gift for the wedding. This should be something nice, but not over the top.
Honestly. The best gift is $100 bill. Just get a nice card, write some nice things and voila. My wife and I have done this for every eng/wedding we've gone too and it goes over really well. If you are feeling economical, drop a $50.
The best engagement present I got was a gift certificate to an online wedding binder website. I used the site every single day so it was probably the most useful gift that I got. I highly recommend MyWeddingBinder
Its easy to use and has wonderful tools and tons of planning tips!
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I would reccomend finding out where the bride and groom are registered and purchasing something off of their registry list - this is the best way to ensure you purchase something that the newlyweds are in need of.