With the growing financial uncertainties and unexpected health issues, it is essential to save and invest money to create a passive income source. Saving money has become an undetachable element of financial planning. All it takes is a certain level of sacrifices and discipline. Having suffered such a major pandemic, you must have realized the importance of saving money to survive such challenging times.
Once you start saving money, irrespective of the amount, it’ll become a part of your financial planning. It gives you long-term financial security and helps in taking calculated risks. Apart from this, systemic savings become a saviour during unanticipated events and times of emergency, which also helps in reducing stress. You can easily make all calculations depending on the duration and the amount for which you invest an amount using the many investment calculators available online.
Once you start investing your savings in income-generating vehicles, like ULIPs, mutual funds, your money starts to earn returns for you. ULIP full form is Unit Linked Investment Plan and it helps get insurance coverage and the investment opportunity.
How and Where Should You Invest Your Savings?
To get good returns on your savings, you can make investments into an income and savings plan like ULIPs than keeping them in your bank account. With the increasing number of flexible investment options available, you can easily calculate the amount with few clicks using an investment calculator and choose accordingly. You should invest in policies and return-yielding instruments in a balanced way.
Why Should You Choose a Savings and Income Plan?
Choosing the right plan to invest your savings and generate passive income will give you long term benefits and financial security. Find below some of the benefits which these plans provide:
- Coverage and Pay-outs
Essentially, a savings plan gives financial coverage for fulfilling long term financial goals and keeps you prepared for any unexpected events that might arise in the near future. Apart from the pay-outs of the saving amount, financial coverage is provided to the members of your family in your absence.
Using the investment calculator, you can easily calculate ULIP returns online and estimate the returns you’ll be eligible for in the future.
- Tax Benefits
Apart from other benefits, as per Section 80C of the Income Tax Act, 1861, investing in certain investment types helps you get tax benefits on the premium amounts paid. Tax benefit up to Rs 1.5 Lakh can be availed, depending on the premium paid.
- Long Term Wealth Accumulation
While investing wisely in certain insurance products, you can accumulate a fair amount of wealth over a certain period. These help you in getting insurance coverage as well as investment opportunities in market-linked securities like debt, equity, and others. You can comfortably sit back and get returns at the chosen frequency, which is decided based on the policy that you’ve picked. Use an investment calculator to calculate and make a better choice.
- Flexibility
Everyone has different financial goals and abilities. Many investment plans provide the required flexibility depending on the availability of funds and the term for which you want to invest. You can easily calculate the returns as per your convenience using the investment calculator online for a better understanding. Also, you can work out a properly customized plan to attain maximum returns.
- Life Goals can be met Efficiently
Developing a habit to have your finances planned and risks calculated is bound to make your life easier and better. Though, many uncertainties might come up during your lifetime, with the right investments, you can stay prepared for all times.
Before making any investment, you should analyze various options and choose the one that fits well with your unique goals. With the help of such investments, you can achieve your goals efficiently and in a planned manner.
Pick the Right Savings Plan
While going through amongst many insurance plans, you should consider critical factors before making a choice. Necessarily, you should be clear about your investment objectives, i.e., what’s the goal you want to accomplish with that particular choice of investment. The premium amount that you can manage to pay and the term for which you want to make that investment should also be taken into due consideration. Also, you should check associated charges, like administration charges, fund allocation, management charges across various investment options. Based on your affordability and personal preferences, you can choose the best savings plan.
After considering all these things and calculating the returns using an investment calculator, you can start your investment journey and earn good returns for the fulfilment of your life goals.
Source:
https://www.incometaxindia.gov.in/Pages/tools/deduction-under-section-80c.aspx