A financial plan with an adequate provision to grow your savings is a necessity. A savings plan can organize your income wisely, help you manage an emergency, and ensure short-term and long-term financial commitments. Additionally, with plans like the savings insurance plan, you can ensure financial protection for your family with the life cover component.
Choosing the right plan based on your income and requirements is crucial. Here are seven methods you can choose to grow your savings.
- Fixed and Recurring Deposits: FDs and RDs are the safest options to grow your savings. In an FD scheme, you will make a lump sum amount for a fixed period. The scheme will provide interest for the amount you deposited. With an RD, you will save and deposit a small amount of money for a long period. The interest earned and the capital amount accumulated are provided on maturity.
- Mutual Funds: If you are looking for ways to grow your money by investing in the securities market, mutual fund investment is considered the safest mode for people with a low-risk appetite. It refers to a fund acquired by collecting money from different investors to buy securities in the financial market. A mutual fund is managed by an asset management company and ensures professional service. You can invest based on your needs and risk tolerance levels.
- Guaranteed return life insurance plan: It is a type of endowment insurance plan that offers dual benefits: insurance and guaranteed savings returns. The benefits are based on the regular premium amounts paid to the savings plan for a set policy duration. The life cover will provide the sum assured to the nominee in case of your unexpected death. With the saving plan calculator provided online, you can calculate the premium amount based on the returns and the policy tenure.
Additionally, the endowment insurance plan offers guaranteed returns on maturity. As the returns are guaranteed at policy inception, you can plan way ahead for your long-term financial commitments. It is safe, tax-saving, and earns higher returns in the long term. There are flexible premium payment and pay-out options. TATA AIA life online payment ensures a reliable medium for such requirements.
- ULIP: A Unit Linked Insurance Plan (ULIP) is another endowment insurance plan that offers insurance and investment benefits. One portion of the premium is utilized for life cover, and the rest is invested in the securities market. You can invest in equity, debt, or hybrid funds and the returns are completely market-linked. You can switch between the funds during the policy term. It has a lock-in period of five years and can get higher returns in the long run.
- PPF: Public Provident Fund is a government-backed savings plan with long-term benefits. The usual duration of the account is 15 years. The scheme will provide the amount invested along with the interest amount accrued on maturity.
- NSC: National Savings Certificate is a Post Office savings plan and backed by the government. It ensures guaranteed returns and tax benefits. You are entitled to receive a yearly interest. The investment is generally for 5 to 10 years. The amount invested and the interest accrued are provided on maturity. The investment can start with as minimum as Rs. 100.
- NPS: If you plan to grow your savings for a peaceful and independent retirement, the National Pension Scheme is an ideal savings plan. You will have to invest a specific fixed amount in the pension account regularly. It is invested in financial securities, bonds, etc. After retirement, the account holders will receive one lump sum portion and the rest as regular pension payments.
There are several ways to grow savings. We have seen some of the best methods here. You can choose the best savings investment plan based on your needs. Plan a budget, make a financial plan, reserve funds to save, and start your savings journey.
An endowment insurance plan will be an effective option as it ensures life cover and guaranteed returns!