All investors want to get maximum returns from their investment. One smart way to increase wealth and to cater to day-to-day financial requirements is to invest money in the best saving plan. It is important to evaluate your risk profile before making any investment.
A savings plan is an important part of financial planning and long-term financial stability. Investing in the best saving plan is essential for medical emergencies, post-retirement years, education fees, or marriage. Before investing, you should learn about the various saving plans available in India, like what is ulip, ppf, or other many plans.
What Exactly is a Saving Plan?
Saving plans are financial products that are designed to enable disciplined savings while delivering steady returns that help you achieve your financial goals. As they are primarily a life insurance product, saving plans also ensure the financial security of your loved ones in case of any unfortunate event.
Benefits of Investing in the Best Saving Plan
A saving plan comes with an assured maturity benefit. Many of the best savings plans offer guaranteed additions and a maturity corpus which will help you to achieve your financial goals faster.
Saving schemes also offer steady and safe returns on your investment. You will not lose the money that is committed to you at the time of policy inception, so it is also a risk-free investment.
The best savings plan comes with a life cover and provides financial security to your family in case something unfortunate happens to you. Additionally, you will receive tax benefits under Section 80C of the Income Tax Act.
Tips to Consider Before Investing in the Best Saving Plan
Saving plans are a step towards a sound financial future. Choosing the correct saving plan is important for the success of your financial goals. But finding the best saving plan isn’t always easy. So here are some important tips which you should keep in mind before buying any of the best saving plans.
Set a Goal
It is essential to set a goal before investing in any savings plan. This could be your child’s higher studies, buying a dream house, planning for a comfortable retirement for yourself, or going on a dream vacation.
Consider Your Risk Assessment
Your risk appetite may vary depending on your life stage, your age, and your income and goals. A plan that offers higher returns may come with a high risk with it. So, it is always important to evaluate the risks associated with the various saving schemes and choose the plan based on your risk appetite.
Flexible Investment Modes
The saving plan must have the right mix of investment options across fixed and liquid assets to enable the investors with enough backup in case of unexpected circumstances. It makes the plan useful for you regardless of your income frequency. Also, you will be able to invest for a short period into one goal and then move to another. There are many savings plans that provide flexibility to pay premiums monthly, quarterly, or yearly.
Protection of Financial Goals
If you are investing for an important financial goal like your child’s higher studies, or marriage, then you will need more than just a return guarantee. You will need protection for your financial goals.
Some savings plans from life insurers have the option to provide safety to your financial goals. The insurance company may even pay the due premiums on the plan, in case of your untimely demise.
Tax Saving Status
Tax-saving status is another important factor with long-term investments, as tax liabilities can reduce your return on investment. It is essential to consider tax exemption on investments. Most of the tax deductions on savings plans are done under Section 80C of the Income Tax Act, which limits the deduction to INR 150,000.
The best savings plans offer a long-term investment horizon and serve as tax-saving investment options. For example, ULIPs are helpful as these build up corpus over the life of the policy. The investors can start with a small premium amount and build it up over the policy tenure. Most insurance companies understand the fluctuating nature of earnings and savings depending on the age of the investors and provide options to increase or decrease the amount of investment as per the investor’s convenience.
There is a variety of the best saving plans spread across risk profiles that cater to a wide variety of investors. All savings plans are supported by the government, hence you receive guaranteed capital protection as well as attractive rates.