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4 Things to Look Out for While Buying Saving Plans in India

4 Things to Look Out for While Buying Saving Plans in India - India News in Hindi

Wealth accumulation and financial security are goals that most working individuals actively strive towards. India has a very dynamic income and investment market, one that is built to cater to customizable needs and financial obligations.
Hence, while in the pursuit of saving for themselves and their loved ones, one has to consider which saving plan is the best suited and most beneficial to their immediate financial goals. The matrix of pros and cons for each can only be validated when the person making the choice is well-prepared to understand the saving options they may have access to.

As one can gauge from the word itself, the act of taking a sum of money and consciously setting it aside for future purposes or as an emergency fund is called saving. One can keep adding to this corpus, where monthly they may save a chunk of their earnings and set it aside for an impending expense they might have visibility for. It can be for personal goals or short term expenses such as travel, property maintenance, or even unforeseen emergencies etc.

Savings can be set in savings accounts or fixed deposit accounts in bank saving schemes among a host of other types of investments available as well.

Most saving plans in India have the supplementary benefit of being backed by the government. A step towards incentivising public sector bank investments and financial literacy, saving schemes are a useful method saving for one’s future in a secure and regulated space.

A potential investor or someone looking to save their funds for later will always benefit from a tangible financial road-map at the beginning of their savings or investment decisions. Since there is an abundance of saving plans available today, one should do a thorough research when looking for the option that serves their purposes better.
Considerations To Make Before Making An Investment

Let us look at some of the factors to consider before buying saving plans:

1. Risk Appetite: Since savings are often done independently by individuals preparing for a fixed expense they are expecting, there is little possibility of their funds suffering or deteriorating. Savings Accounts and Fixed Deposits are some of the most favoured saving plans as they provide fund security and guarantee steady returns.
Market-linked investment plans such as ULIPs and mutual fund equities, however, have higher risk margins as they are directly affected by market-crashes or any other economically detrimental situation. Before purchasing saving plans, one should duly take their risk appetite into consideration. Younger investors with less liabilities and more time to recover have the space to take risks, but older investors with liabilities and dependents have to be more conservative with their choices.

2. Tenure: As with most investment plans, the investment horizon a person may have is an important factor to consider before investing. Saving plans are usually long-term investments, where the money is steadily built over a period of time. The savings can be built over nominal premiums which can gradually grow into a sizeable corpus for the investor. A saving plan should also be invested in with some foreseeable expenses in mind, therefore one should go for plans that mature and have flexibility aligned carefully with the time they will be required.
It is also important to note that in the case of drastic inflation, the cash value of the funds parked into savings accounts drops significantly, but market-linked investments offer exponential returns they can bear the tides of the fluctuation and yield inflation-adjusted returns.

3. Financial Goals: One of the main things to consider at the time of purchasing saving plans is the personal goal this money will serve in the long run. To have a significant corpus to fulfil expenses such as higher education, asset purchases, marriage, and travel is an important step to secure one’s financial stability. One should also keep in mind their dependents and their goals, along with foreseeable lifestyle and income changes such retirement while choosing saving plans.
If someone is looking for short term monetary funds that they can use in the foreseeable future, then they should choose savings. But if a person is actively looking to build their investment portfolio and grow their capital by exponential margins, they should go for long-term saving plans such as market-linked funds.

4. Flexibility: Investors who value and seek high liquidity and are more adept at being able to access their funds as per their requirement benefit from investing in saving schemes. A saving plan is useful because of its accessibility and simple investment structures. But since there are many kinds of saving plans available now, one should read the fine print and check for withdrawal or exit charges before investing.

Additionally, with respect to market-linked investment plans it is advised to not pour one's emergency funds into it because of its unpredictability.

A saving plan is one of the most fundamental ways of building one’s corpus for future use. Max Life Insurance and its adept financial advisors can help you find saving plans that can cater to your growth needs and financial goals in the long run. Get in touch today to look through the wide range of saving plans offered by Max Life Insurance and rest assured for a secure future.

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