Best Savings and Investment Plans You Should Consider

By now, we all know the importance of saving our money. When we get our income, it is advisable to first take 20% out of it, put it into our savings or investments, and keep the rest for our expenditure.

But people new to saving or investing can be confused about how to do those things. When it comes to investing our money, there are a plethora of options available, and unless you understand these financial instruments, it can be difficult to make investment decisions.

In this blog, we’ll list some of the best savings and investment plans you should consider based on your risk appetite, return expectations, and goals.

Mutual Funds

Mutual funds are one of the most popular forms of investment today. That is because they’re accessible, and anyone with a Demat trading account can invest. Additionally, the minimum investment amount is quite small, so anyone from all walks of life can invest if they choose to.

Mutual fund investment can be done in equity funds or debt funds, or a combination of both called hybrid funds. The former is the riskiest, as your money would be invested in the stock market. Debt funds are fixed-income funds and the least risky, but the returns expected are not much. You can build a portfolio that has a good balance between equity and debt funds in order to counter the fluctuating market.

Equity Linked Savings Scheme (ELSS)

Equity Linked Savings Scheme is, in actuality, just another type of mutual fund that invests in equity. The difference lies in its tax-saving aspect.

The usual mutual fund investments are not tax-deductible under Section 80C. ELSS funds, on the other hand, come under Section 80C, and you can claim a tax deduction if you invest in these funds. The only caveat is that there is a lock-in period of three years when it comes to ELSS.

If you’re looking to invest in mutual funds for the long term but would also like to save tax, then ELSS funds would be the best option for you since the waiting period of three years wouldn’t be a hindrance.

Unit Linked Insurance Plans (ULIPs)

A Unit Linked Insurance Plan is, in essence, a combination of two different plans. It is a unique product that combines the benefits of term insurance and mutual fund investment.

Part of the premium you pay for ULIP plans goes towards the insurance component, and the other part is invested in a fund of your choice. It can be equity funds, debt funds, or hybrid funds.

You also have the option to choose your funds and allocate your funds accordingly. ULIPs may have additional charges which reduce over a longer term. Choose a ULIP plan only if you plan to stay invested for quite a long term since your returns may be less due to ULIP charges otherwise.

Sukanya Samriddhi Yojana (SSY)

If you’re looking to invest in a government-backed scheme, then this is one of the best investment plans for girl children. The SSY scheme is aimed at accumulating savings for girls’ education and marriage.

Click here to know more about What are the Tax Benefits of Sukanya Samriddhi Yojana (SSY)?

Let this blog be your guide if you’re looking to begin your savings and investment journey but don’t know where to start. Start investing in any one of the plans listed above.

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