If you’re looking to accumulate money for your future’s betterment, a savings plan is certainly a perfect option for you. With proper considerations, you can make great returns out of your investment with the help of a saving scheme.
However, a lot of people never invest in these schemes because of a lack of financial literacy. They miss out on a great opportunity to put their money into work. That’s why to help these people, this blog talks about 10 things you should know about the different types of savings schemes in India.
- They’re Available Online
In these unprecedented times, the worst thing you can expect from your investment is to visit a physical branch to be able to zero in. Fortunately, savings schemes are available to purchase online with very minimal paperwork required.
In addition to purchasing a policy, you can also invest, manage and withdraw the money online. In case you encounter any error, you can also contact customer support for assistance. The best thing is that these investments can also be automated.
- Provides Tax Savings
If you’re looking to invest your capital in the long term, you must make sure that your investment provides you tax benefits to make the most out of it. Savings plans offer tax benefits on the premiums paid with a deduction of up to Rs. 1.5 Lakhs.
Moreover, as per section 10(10D) of the Income Tax Act of India, the maturity proceeds are also exempted from taxation in savings plans. This makes them one of the most popular tax-saving instruments in India.
- Offers Guaranteed Returns
If you’re a risk-averse investor and prefer having a safeguard of your principal amount, then savings plans with guaranteed returns are your best bet. A lot of insurance providers offer these plans that offer a base sum assured as a guaranteed return.
In addition to this, you also gain even more returns through loyalty bonuses provided annually for remaining invested for a long time. This allows you to supercharge your maturity value to enjoy maximum savings.
- Features Flexible Investment Terms
When you have the liberty to choose your preferred investment terms, you can make sure that your plan is effective regardless of your income frequency. It’s always considered to personalize your investments as per life goals and achieve them accordingly.
Savings plans allow you to choose your desired investment mode like monthly, annually, or quarterly. Moreover, it also allows you to choose the desired investment period as per your financial preferences.
- Includes Additional Riders
When it comes to savings plans, there are certain variants of it like unit-linked insurance plans that provide combined benefits of investment and insurance. These plans also feature additional riders like the accidental death benefit.
These riders allow you to extend your policy’s coverage and make it even better. Moreover, depending on what riders you choose, it can help safeguard you and your family in a variety of different instances.
- A multitude of Investment Options
The best thing about savings plans is that they allow you to invest your capital in a variety of different investment instruments. Whether you want to invest in high-risk high-reward equity funds or safer alternatives like debt or balanced funds, savings plans provide great flexibility in investments.
In some cases, it may also allow you to invest in government securities, corporate bonds, money market instruments, and a lot more. With such a great variety of investment options, you can make personalized investments for better returns.
- Requires Minimal Charges
As compared to other conventional policies, savings plans require lesser charges for the policy. Moreover, the plans that are available online are even more convenient in terms of fund management charges, partial withdrawal charges, mortality charges, and a lot more.
Although these charges cannot be avoided, they’re much more affordable than other plans and have a very streamlined process in terms of cash withdrawal and bonuses, which make them a very convenient source of investment.
- Ensure Long-Term benefits
As most of the investment schemes are dependent on the concept of compound interest for calculating the interest, investing in different savings schemes will allow you to enjoy very promising returns in the long run.
Additionally, most of the savings schemes have a minimum lock-in period of at least three years and the investment can be continued for as long as you reach 60 years of age. With such a comprehensive investment period, you can enjoy greater returns on your investment.
- Safeguards Your Family’s Future
As you may already know, savings schemes are essentially life insurance plans in which a part of your premiums is used to invest in market-linked assets and provide you returns. In addition to this, the plan also provides you with a life coverage that ensures the financial protection of your family.
In the event of your unfortunate death, your nominee receives a death benefit to make sure that your family and dependents can manage their day-to-day expenses without having to depend on anyone financially.
- Facilitates Your Financial Goals
When you invest your capital, you’re not looking to grow your money, but you’re looking to accomplish a particular dream or goal in your life. Whether it is your child’s marriage or a business that you want to start, every investment has a purpose.
There are different types of saving schemes that allow you to invest your capital as per your life goals so that your investments are aligned specifically to help you reach your aspiration faster.
In this article, we’ve covered some of the most important things to know about saving schemes in India. These will help you make a more informed decision when it comes to deciding where to invest your hard-earned money. We hope these tips have been helpful. Saving schemes can be a great way to keep your money safe and grow it over time – but there are a lot of different choices out there, so it pays to do your research.