Savings are an essential part of your life, aren’t they? Well, it’s a financial safety net that is going to help you take care of inflation, manage any major financial situation, and fund your child’s education. In fact, in India, savings have a major role to play even during one’s retirement years. Now, you might be wondering how the same savings plan or scheme could resolve all these things.
Nowadays, the market has become diverse. Given life’s uncertainties and the need for financial corpus, several savings schemes have surfaced. Let’s take you through some of the best ones and help you determine which one would be an ideal option for your needs.
Things to Know When Choosing the Best Savings Scheme
Before you start exploring any investment options for savings, you must note that certain factors might influence them. Therefore, below are some of the most influential factors you must keep in mind:
- Risk Appetite: Knowing how much funds you can allocate in a plan helps you determine how much risk you can take on. Some options will provide you with guaranteed returns, while others will offer much higher returns but at an increased risk.
- Investment Horizon: Your financial position is one of the key elements influencing your choice of savings scheme. It is highly dependent on how long you will keep your money invested. Some savings schemes are an ideal option if you’re looking to fulfil short-term goals, and others are what you need to plan for your future.
- Tax Benefits: Try to benefit from investing in those schemes that are mentioned in the Income Tax Act. Those plans basically serve as a source of additional savings and reduce the financial burden that taxes can put on you.
- Liquidity: Some of the savings schemes allow you to withdraw funds any time you’d like to. Conversely, some of them will block the money for a year or more.
- Returns: With a better return rate, your money will grow quicker. You must assess and compare plans to determine which will offer the best returns.
Exploring 3 Best Savings Schemes for Wealth Creation
Out of many savings plans, you must pick the right one given their importance in the near future. Here are some of the hand-picked plans to invest in:
1. Unit-linked Insurance Plan (ULIP)
ULIPs are a unique blend of insurance and investment with a tax-saving element. You shall expect one portion of the premiums to be dedicated to coverage while the other one is used for investment in market units. This nature makes them an attractive savings scheme if you’re seeking both protection and wealth creation.
Moreover, if you invest in these plans with the help of a renowned insurance provider, they’ll allow you to choose from various investment funds. It helps you align your investment as per risk appetite. Speaking of the tax deduction, you get benefits from Section 80C. In addition, Section 10 (10D) benefits the nominee in case the policyholder passes away during the term.
2. Whole Life Insurance Plan
Similar to term insurance plans, which are basically for coverage benefits only, there exist whole life plans. They are an ideal savings scheme option for you if you’re looking to build a corpus for your retirement years. The plan’s benefit extends up to the age of 99 years while you have to pay the premium just for the given term.
Along with that, tax deductions under 80C can be availed for a maximum of ₹1.5 lakhs per financial year. You can use the tax benefit to invest in other savings plans as well, such as PPF, EPF, NPS, SCSS, etc. Lastly, there’s a maturity benefit given at the end of the policy’s term.
3. Money-Back Child Insurance Plan
Ideally, a child insurance plan is not generally introduced as a savings scheme for an individual. Nevertheless, choosing a money-back child insurance plan may offer insurance and savings for yourself and your child. The tax-saving element is anyways present for every insurance that you invest in.
Specifically, for this plan, you get to build a corpus for your child’s future aspirations, like higher education. Moreover, the insurance benefit would remain tax-free in case given out due to the policyholder’s untimely demise.
Choosing the Best Savings Scheme
The best plan to invest in and maximise your savings is entirely focused on your financial position, risk appetite, and the scheme you pick. However, often overlooked, you must pair up with a suitable insurance provider if you’re looking for the ultimate savings package.
Canara HSBC Life Insurance is one of the online insurance providers that you would want to have in your corner. With a 99.23% claim settlement ratio, flexibility options, diverse range of plans, they serve the best.
So, without further delay, visit their official website and invest hassle-free today!
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