In India, there are many financial instruments that you can invest in to secure your financial future and build a sizeable corpus in the long run. The choice of your investment scheme greatly depends on the goals you want to accomplish and your risk-taking capacity.
If you want to invest in a low-risk instrument, you can consider investing in a savings plan. It is one of the most popular financial products that help you save money throughout your working years and build a valuable corpus that you can use for your future needs. In this write-up, we discuss the important things you must know about the best savings plan.
What is a savings plan?
A savings plan is a unique financial instrument designed to help you save for your goals in a disciplined manner and get valuable returns. It is a life insurance product, providing insurance protection, i.e., financial security against uncertain events.
Features and benefits of savings plan
- You get assured maturity benefits
One of the most significant features of a savings plan is that they offer an assured maturity benefit. This adds value to your savings and helps you accomplish your short-term and long-term goals. Also, the best savings plan offers you additional benefits like a loyalty bonus, which gets added to the maturity amount and helps you accomplish your goal faster.
- Flexible premium payment option
Most savings plans give you the flexibility to choose the premium payment mode as per your affordability. You can choose to pay the premium monthly, quarterly or on a yearly basis.
- Regular returns
When you invest in the best savings plan, you can be assured of receiving stable returns, which will grow over time on a compounding basis. Also, the returns you get are risk-free and regular. This means unlike investing in shares or other high-risk instruments, you need not worry about losing your money. However, to earn returns and grow your capital, you must pay the premium diligently on time throughout the policy tenure.
- Life insurance coverage
Savings plans offer life insurance coverage to your family. It is a vital financial asset that ensures that your loved ones will never face any financial hardship, even when you are no more. So, while you enjoy savings for long-term goals and get valuable returns, you get the added benefit of life insurance.
- Tax benefits
Like any other life insurance policy, you can claim tax benefits on the premium you pay for a savings plan. You can enjoy tax benefits up to Rs. 1.5 lakhs in a financial year under Section 80C of the Indian Income Tax Act, 1969. Also, the proceeds you get upon policy maturity are entirely tax-free.
- Secures your retirement
A savings plan is a great way to accumulate wealth for your retirement. As you continue to save throughout your working years, you can build a sizeable corpus, which you can use during the golden years of your life.
It is one of the safest, long-term investment options you can choose and start saving even with a small amount and yet live a happy and financially independent retirement life.
Now that you know what a savings plan is and its features and benefits, make sure you invest in one and start saving towards a financially secured future now!