The 7 Best Savings Plans You Need in Your Financial Portfolio

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Everyone is looking for ways to invest their money to earn assured financial returns in the future. However, choosing the right savings plans for your investment portfolio is an art in itself. The right set of plans will help build wealth and ensure your future financial well-being should the need arise. That’s why you need to invest in the right savings plan to make your money grow. But first, let us understand the basics.

What is an investment plan?

An investment plan is a financial product that aims to create wealth in the future. If designed well, it will help you invest your excess funds in a disciplined way to improve your lifestyle and achieve your long-term financial goals.

How to choose an investment plan?

You are considering investing in financial products and you must first assess your profile and your needs. Investment planning requires careful selection of the savings plan that provides you with regular returns over a period of time. Don’t fall for savings plans that promise quick returns in a short time. You need to do proper research and then carefully choose the savings instruments that will be part of your investment plan.

In this article, we will share some of the best savings plans you can choose for your financial portfolio.

1. Public Provident Fund (PPF)

They are considered to be the safest and most reliable forms of savings in India. An investor can save up to Rs. 1.5L per year and start with as little as Rs. 500. You can make deposits all at once or in 12 equal installments. They are also entitled to tax deductions u/s 80C of the Income Tax Act. Since they fall under the EEA category, i.e. exempt, the investor is not required to pay tax at any of the three levels of investment, income or withdrawal. One of the best Tax saving tips for employees is to invest in the PPF.

2. Mutual Funds

With mutual funds, you have complete transparency over your funds. In turn, your fund manager will also allow you to compare funds based on risk, price and return.

3. Postal Savings Plan

This savings plan is perfect for retired people who need regular income. It requires you to deposit money into your postal savings account which offers you fixed interest on your balance. You can invest a maximum of Rs. 4.5 lakhs individually.

4. National Savings Certificate (NSC)

It is also one of the most popular savings schemes in India which starts from Rs. 100 as a single person. Your investments have a lock-up period of 5 years. Any interest earned during this period is reinvested and accrued to be paid as a maturity benefit.

5. Unit Linked Insurance Schemes (ULIP)

With a savings and investment component, ULIP is recognized for its benefits in terms of wealth creation and tax savings, other than the death benefit. It is among the best savings schemes in India and is very popular among investors who want to earn money from their investment.

6. Fixed bank deposits

You can also think of bank DFs as a savings plan for your financial portfolio. They come with fixed returns for investment. Additionally, you can choose to pay interest on a monthly, annual or semi-annual basis.

7. Savings Scheme for Senior Citizens (SCSS)

These tax-free savings plans are absolutely risk-free and completely safe for investors over 60. This special scheme offers a high interest rate of 7.4% per annum. The lock-up period of SCSS is 5 years and the maximum amount to be invested cannot exceed Rs. 15,000,000. Seniors earn interest quarterly. The amount invested is eligible for tax deductions u/s 80C of the Income Tax Act.

How to choose an investment plan?

Now that you know about popular savings plans, the big question is how to choose an investment plan for your portfolio.

To develop an ideal savings plan, you need to know your financial goals, cash flow needs, investment opportunities, and risk appetite. Once you’ve clearly defined the goals, you can determine which plan suits your needs and budget. Then you can either invest in financial assets, such as mutual funds, stocks, and bank deposits, or in non-financial assets, such as gold.

No matter what you choose, be sure to use the following tips when researching savings plans:

– Search all available options adequately

– Do not fall for schemes that offer high returns quickly

– Keep an eye on all your investments and review them from time to time

– Understand the tax savings and the return on your investments

– Start investing as early as possible

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