Best Saving Plans To Learn

7 Jun 2022

The best of the savings plan offers much more than just the steady growth of the investment

1. Tax Savings
Tax saving is one of the most important and unique features of these saving plans. The best plans will offer tax saving in all the following situations:

a) Investment amount deductible from taxable income under section 80C
b) Tax-free maturity value/ death benefit
c) Invest any amount without losing the tax-free status of maturity amount

Guaranteed savings plans from life insurance companies offer all the three tax-exemption status to your money. Thus, if you chose to use one of these plans to save for your goal, the goal value could be entirely tax-free.

One factor you will need to keep in mind, though, is that your annual investment in the plan should not exceed 10% of the life cover in the plan.

For example, if you want to accumulate Rs. 50 lakhs, the guaranteed saving plan will accept Rs. 50 lakhs as the base life cover and decide your premium. All you need to do is to make sure that the annual premium in any financial year is not more than Rs. 5 lakhs.

Also, you cannot voluntarily invest more than Rs. 5 lakhs in the plan in any financial year. If you do so, the maturity value of your investment will become taxable.

2. Guaranteed Returns
The best saving plans in the market offer guaranteed returns. Meaning, you know the minimum amount you will get upon maturity at the inception of investment. This makes it very easy to plan for important life goals using these plans.
3. Wealth Boosters
The guaranteed sum is only the minimum assured return. Wealth boosters, as the name suggests, add to your portfolio value over time. These are regular bonuses which add to your plan as long as you stay invested. Longer-term investments naturally accumulate higher bonuses.
4. Goal Protection
Goal protection or premium protection is another unique feature of the guaranteed saving plan. This feature means that even if you meet the ultimate fate before completing your investment into the plan, your family will meet the goal.
5. Investment Flexibility
Investment flexibility allows you to invest in a way most convenient for you. For example, if you are salaried, you would like to invest every month, while business professionals may prefer quarterly or annual mode of investment.

Also, you have multiple goals in life, and if possible, you would like to invest in different goals at different times. Limited pay option of the guaranteed saving plan gives you this flexibility of investing in the plan for a limited period.

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