Are You Investing in The Most Beneficial Saving Plan? Find Out!

by Jenn

Investment does not always mean banks! With the constant advancements in the insurance and mutual funds industry, you now have a range of financial instruments to save your money. All this happened as people saw how little interest traditional banks were paying on their savings.

There is hard-earned money that we all want to save for a brighter future and with the right investment option, we can ensure transparent and safe savings. Here, we explore the best saving plan in India that can help us build a sufficient corpus for ourselves and stay financially secure.

Moreover, your time is as valuable as your hard-earned money so it makes sense not to waste it on some lame saving plan. That said, it doesn’t mean you need the most expensive one but also not the cheapest and most pathetic offering either.

The best saving plans in India need to be somewhere in between and that is what we will highlight here.

What is a Savings Plan?

The word savings has evolved most prominently with the advent of banks. Having a substantial amount of savings is a great advantage that enables one to meet unexpected expenses and/or plan for retirement.

There are many ways to save money. Some of them are much better than others, but because there are so many options, it’s hard to figure out which one is best for your situation. Savings plans are offered by both government bodies and private financial settings.

Best Saving Plans in India

1. Mutual funds

If you want to explore and benefit from equities and debts, which gives you an option to balance risk and returns based on your preference, you can consider investing in mutual funds that allow you to save more stably in India.

Similarly, you can also consider starting a Systematic Investment Plan (SIP), a way of making small regular investments in mutual funds. As time passes, you should be able to see a considerable amount accumulated with unrealized gains based on the plan you’ve chosen.

2. Equity-linked savings scheme (ELSS)

This mutual fund scheme helps to invest in the equity market (stock exchange). It is also called an equity-linked saving scheme and you can earn higher returns by investing in ELSS since all the investments are made in the equity market that can help you beat the present rate of inflation.

You will also get a tax deduction of up to Rs. 1,50,000 under section 80C if you invest in ELSS. As per this section of the Income Tax Act of India, the premiums paid for the policy are eligible for tax deductions of up to Rs. 1.5 lakhs in a financial year.

ELSS funds can be started with an investment of as little as Rs. 500 and there is no maximum limit on investment in these funds. It is wise to choose a combination of these investment options and schemes and spread your risk by investing in safe options.

3. Post Office Savings Scheme

The post-office savings scheme offers higher returns than other saving plans and is suitable for those who have a low-risk appetite as well as those who want easy access to their money. It is designed to appeal to people who prefer a cautious approach to money.

You can open an account in the name of your minor child and grow her money for her benefit. For people looking for risk-free investment opportunities, this is a good choice, which allows you to save up for your child’s future.

4. Public Provident Fund (PPF)

PPF has been around for a long time and has earned the backing of the government. Launched in 1968, it is extremely popular among people who want to save money safely and easily in addition to enjoying several tax benefits. It is one of the best saving schemes in India. 

The money you put in your PPF account is eligible for a tax deduction and, more importantly, the money you earn in your PPF account will not be taxed. You will need to invest at least 500 rupees in your PPF account with no maximum limit on investment.

You can’t have multiple PPF accounts. The interest is compounded annually and if you want, the lump sum can be converted to deposits, which means you can save up to 12 times a year. The account is easily transferable from one post office to another without any hassles.

Every Indian citizen can take advantage of this savings plan. However, NRIs and HUFs are ineligible to open a PPF account. Additionally, investors can take out a loan against their PPF investments by using it as collateral in banks and other financial institutions.

5. Sukanya Samriddhi Yojana (SSY)

Sukanya Samriddhi Yojana is a savings scheme introduced by the Indian Ministry of Finance to secure the financial future of the girl child so that she can achieve life’s milestones without having to depend on anyone.

The government’s Sukanya Samriddhi Yojana offers an interest rate of 8.1% on the principal amount. One can invest in this scheme at any post office or authorized bank in India, and one must make an initial investment of at least Rs. 1000.

You can make deposits in SSY for 15 years. Deposits made into this account while your daughter is a minor can earn you compound interest. It can help your daughter get her education, start her own business, or get married.

Conclusion

There is a wide variety of saving plans in India that can help you save money and build a nest egg. After reading this article, you will know about the best saving scheme and how they can help you save a lot of money for your future.

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