Savings are a very important part of every human being’s life. Be it for any kind of future expenditure or for paying the various bills, we all have to make sure that we have some savings set aside. However, a majority of us remain unaware of the numerous financial products and saving plans which are available to us.
It is commonplace to only be aware of the basic savings options like fixed deposits as well as saving bank accounts. But apart from these, there are several other products available on the market which help people to save their money in a better way or to specifically cater to the needs of their own specific goals.
The aim of this post is to list down a few of the best saving plans for the convenience of our readers and so that everyone can apply for any one or more based on his/her own requirements.
Unit Linked Insurance Plans
A Unit Linked Insurance Plan (ULIP) is a hybrid plan that combines the advantages of both investment and insurance. This is an excellent choice for a long-term investor seeking a stable income stream.
In this plan, the premium is split into two parts—the first part goes into providing life cover to the policyholder, while the second part becomes a part of an investment fund. Here, you can choose between equity funds or debt funds.
The returns on your investment are dependent upon how well your fund performs. The beauty of this saving plan lies in its flexibility, as it allows you to switch between different funds as per your requirements. You can also modify your premium payments according to your current financial situation.
Equity Linked Saving Schemes
Equity Linked Savings Scheme (ELSS) is the best long-term investment in Equity Mutual Funds because it is eligible for tax exemption under Section 80C, provided it does not exceed 1.5 lakhs. This makes ELSS the only mutual fund that is qualified for a tax advantage, making it one of the best saving plans for investors.
One of the main reasons why ELSS is such a great way to invest your money is that it has a lock-in period of only 3 years, which is relatively short compared to other tax-saving instruments. You can avail tax exemption in the year you invested in ELSS and also in future years, as long as you do not withdraw the investment before three years.
Experts believe that investing in ELSS provides you with an opportunity for wealth creation in the future. The risk factor associated with equity markets, however, cannot be ruled out and so investors are advised to invest only if they are willing to take on this risk.
National Pension Scheme (NPS)
In India, the National Pension Scheme (NPS) is a government-backed retirement savings initiative that allows you to invest in a range of assets. These include bonds, stocks, and other debt instruments. The returns from your investments determine the amount of your final pension, subject to a number of limits and regulations.
The NPS comes with a number of advantages. One is that it gives you more choice over where to invest your pension contributions than most other retirement schemes. The scheme also offers tax reliefs on both the money you invest and the money you receive as your pension. That said, these tax reliefs are subject to change and may not be available in all cases.
Finally, the NPS is designed to be an affordable option for those who want to save for their retirement. It’s worth noting that there are strict limits on how much you can withdraw from your account before retirement age.
Public Provident Fund (PPF)
Public Provident Fund (PPF) is a government-backed investment tool that allows investors to earn a stable rate of return on their money. The PPF is a post office saving plan, and the returns you receive are tax-free.
This makes PPF an attractive option for investors who want to balance risk and reward. A PPF investment is not as risky as investing in the stock market, but it also doesn’t come with the extremely low rates of interest found on saving accounts and fixed deposits at banks.
The PPF also comes with considerable tax benefits, as the interest you earn every year is tax-free. In addition, your contributions to your PPF are deductible from your taxable income up to Rs 1.5 lakh per year.
Furthermore, if you choose to take out a loan against your PPF, you can also use it as collateral. This can be useful for people who are looking to get an education or buy a new home or vehicle.
An endowment plan is a regular money-saving plan that helps create a corpus and provides assured maturity rewards and bonuses. The endowment policy is a type of insurance plan that combines life insurance with the opportunity to build wealth via systematic savings.
It is one of the best investments and money-saving choices available to those looking for insurance, investment, and savings plans. With an endowment plan, you pay premiums regularly for a predetermined number of years, at the end of which you receive the sum assured along with accrued bonuses.
It is an effective way to ensure financial stability for your family in case of an untimely demise, as it provides a lump sum amount that can help your family maintain their lifestyle. You also get the option to choose from different payout options if you survive until maturity.
The fact remains that one must save for the future and make decisions carefully. Insurance is not just about providing for the future of your near ones but also for your own self. Only the best saving plans which offer full protection, handle all risks and are never a burden on your finances can be a perfect option.
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