Why does anyone need savings and investment plans? Answering that question may seem like stating the obvious. But it is vital to figure out why we do something because it gives us the motivation to continue or start doing that thing.Besides, it will also help us in knowing what to do in order to achieve that.
For instance, when you know that you need a savings plan, you need to research and know about the plans in detail to purchase the best saving plan suiting your unique preference and requirements.
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If, however, you ask why the best savings plan in India, then you need to understand the basics.
The primary reason to save is that you will have an umbrella to protect you on a rainy day. Moreover, apart from your standard needs, you may also have dreams, desires and plans that you can achieve – and you’d probably have to save money and create a financial plan for the same.
Presumethat you earn a salary of Rs. 60,000 on a monthly basis. Maybeby the end of the month, youhave nothing left after managing your day-to-day expenses. You will have no savings and, thus, no investments. And if youcontinue this,you will never be able to secure your future or of your loved ones.
Plus, if you are not saving or investing, you will be earning but not generating wealth. So, until and unless you are saving or investing, it will not matter if you earn Rs15,000or Rs 2 lakhs monthly. Hence, it will be wise to plan your financials early on so that you can fulfil your dreams and of your family members in the future. And a way to do so is by opting for investing in saving plans.
Types of Savings
While you can save money through numerous means, each will have its limitations. If you are saving money for an emergency fund or paying off a debt, your best bet would be to invest the money you have saved. Note that idle money is always unproductive. Hence, the most beneficial way to go about it is by investing in the best saving plan.
Today,there are multiple types of investment tools, including several savings planthat can help you grow wealth. These options include ULIP plans, National Savings Certificate (NSC’s), Public Provident Fund (PPF), monthly income plans, endowment plans and others. However, choosing the best savings plan in India for investment is all about evaluating your financial goals, risk profile and investment horizon.
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- ULIP Plans
This saving investment is hailed as one of the best saving plansas it offers the best of both worlds. With opportunities for insurance protection and wealth generation, it also offers tax benefits. They offer you the flexibility to allocate funds in 6-7 different funds according to your investment goals and risk appetite.
You can start by selecting the best ULIP plan and start your investment journeyto create long-lasting wealth. It would be helpful to have listed short, mediumand long-term goals with different time frames. Doing so will enable you to plan your investments accordingly.
- National Savings Certificate
It is a fixed income investment planthatyou can open in any post offices across the country. As one of the best saving plans, it is said to be a savings bond thatwill encourage you to invest your money alongside saving income tax.
An initiative of the Government of India, you may use it for a small and a medium investment and even for tax-saving.
- Public Provident Fund
As one of the best savingplans, the public provident fund offersa combination of safety, returns and tax savings. In this plan, the government of our country guarantees your investments in the fund.
Plus, it sets the interest rate every quarter. Public provident funds are also popular because the returns from them are not taxable.
- Monthly Income Plans
Similar to a mutual fund in monthly income plans, the investment is allocated proportionately between the equity and debt markets. Simply put, it is a debt-oriented mutual fund to provide you with periodic payoutsevery month. However, note that since it is market-linked, there is no guarantee of returns. But you can ensure good returns with proper research of the funds that you invest in.
It is apt for you if you want to assure an alternative source of income as a backup. Moreover, if you are looking to have a guaranteed monthly income after retirement, this is the best savings plan in India for you.
- Endowment Plans
Like the ULIP plans, endowment plans are a combination of both an insurance cover and a savings plan. You can save regularly over a period so that you get a lump-sum amount on policy maturity on term survival.
You will get the sum assured on a fixed date in future as per the policy terms and conditions. Otherwise, in your absence, your nominee will get the sum assured.
With thesenumerous types of investmentplans for savings, it can get overwhelming to choose any one. So, you should read about each in detail and find the best saving plan in India that is suitable for your financial portfolio.