Our parents or other guardians taught us to the notion of saving when we were children. We didn’t realize how crucial the notion of saving was until we were in our twenties. However, as we grew older and joined the employment, we began to recognize how the finest savings alternatives might help us reach our long-term financial objectives.
Many insurance firms in India have recognized that people want to grow their financial net via savings and have created savings insurance products and annuity plans. If you want to learn more about the advantages of a savings plan, keep reading.
What is a savings plan?
A savings plan is an insurance policy that allows you to save and build cash for the future. They also provide life insurance coverage for the insured, safeguarding the family’s financial future.
These savings plans offer life insurance as well as guaranteed returns, allowing people with a low-risk appetite to satisfy their unique financial needs by investing in zero-risk investment channels, assuring certain returns to the policyholder.
Why do you need a savings plan?
Savings plans are the recommended financial planning choice for consumers seeking increased savings and future-oriented rewards. Some of the most essential advantages of a savings plan are:
1. Helps you bring financial discipline into your life
You will begin to incorporate savings habits into your life once you realize the benefits of saving. Individuals, on the other hand, find it impossible to bring their money without a specific aim.
This is when a savings plan comes in handy. One of the best advantages of investing in a savings plan is that it motivates you to develop a financial discipline in your life while also protecting you.
2. Provides you insurance coverage along with guaranteed payouts
Because the savings plan is really an insurance plan, it will offer you insurance coverage whenever the need arises.
However, the plan will also give you maturity advantages in addition to insurance coverage. Adding insurance coverage to the plan will give you and your family full financial safety. With the plan’s guaranteed payout, you can be confident that you and your family will be able to accomplish all of your objectives and financial goals.
3. Provides you with tax savings options
The best Savings plan is the one which offers the policyholder tax advantages since it falls under the umbrella of insurance. If you have a savings insurance plan, you may deduct up to Rs. 1.5 lakh from your monthly payments under Section 80C of the Income Tax Act.
Furthermore, the maturity and death benefits are tax-free under Section 10(10D) of the Act.
4. Helps you meet your financial goals
We develop objectives for ourselves as we go through life. However, the bulk of these objectives needs substantial financial investment. You may fulfill some of your most important life objectives with a savings plan.
Some saving insurance policies, for example, are created as savings plans to help you save money and ensure your children get the finest education possible. To guarantee that your life objectives are satisfied with the insurance plan, you must examine the many plans available and choose the one that best meets your needs.
5. Offers you flexibility
Everyone is unique, and everyone has different objectives and ambitions in life. A savings plan takes these variances into account for saving and offers a broad range of customizable components that may be modified to meet the requirements of each person.
They also provide alternatives for money and other investment characteristics, as well as rewards and conditions. You may also adjust your investing strategy as your financial needs and risk tolerance change.
Best savings plan in India
Here are some of the best savings plans in India in 2022:
1. Unit Linked Insurance Plans (ULIPs)
A ULIP is an integrated plan that combines the advantages of both investment and insurance programs. The premium may be paid monthly or annually, which is an excellent choice for an investor seeking a long-term income strategy.
ULIPs utilize a portion of your yearly payment to provide life insurance, while the remainder is invested in your chosen funds. ULIPs are considered one of the best saving plans since they combine life insurance with the ability to develop your money.
2. Guaranteed savings schemes
If you do not have a high-risk tolerance and want to be sure of the returns, you can consider the guaranteed saving programs.
Many consider Canara HSBC Life Insurance’s Guaranteed Savings Plans a safer option for ULIPs since they provide set and guaranteed returns with little risk. That is, you are guaranteed profits on maturity.
3. Public Provident Fund (PPF)
PPF, or Public Provident Fund, is one of India’s oldest and most reputable investing and savings programs. This government-backed savings program includes a sovereign guarantee and, as a result, provides you with a guarantee of returns.
You may establish a PPF account at any bank or post office that offers the PPF service. To join PPF, you must be an Indian citizen above 18. If you are a minor, you may establish an account with the help of your guardian.
4. Equity Linked Savings Scheme (ELSS)
For investments up to 1.5 lakhs, ELSS funds are tax-exempt under Section 80C, and it is the only tax-exempt mutual fund plan.
ELSS funds are entirely comprised of equity assets. On the other hand, ELSS is safer than many additional equity mutual funds since they invest primarily in large-cap or public-sector enterprises. Every deposit in a specific account is subject to a stringent 36-month lock-in term.
Wrapping it up
To achieve your future goals, you must choose the best saving plan for your circumstances and aspirations. To select an appropriate saving plan for yourself, you must first establish your objectives and investing strategies.
Following that, you must decide on an investment target and the level of risk you are willing to accept. Before you start looking into alternative savings programs, you should be clear in your mind about what you want and how you want it, as well as the amount of calculated risk you are ready to accept.
